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True. But if you have more than 25 accounts you can just list the number of accounts on the fbar form. My theory is that they will accept most quiet disclosures for now, then start clobbering people after they introduce the 8938 form which will force people to fully list all their foreign accounts as well as individual stocks.
 

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True. But if you have more than 25 accounts you can just list the number of accounts on the fbar form. My theory is that they will accept most quiet disclosures for now, then start clobbering people after they introduce the 8938 form which will force people to fully list all their foreign accounts as well as individual stocks.
I read about a guy who opened up a few extra ING accounts online to get them up to 25 to avoid filling out the form. That's a good idea in the short term to avoid all the paperwork. The IRS however could audit such a person and ask for all the information which you must keep on file.
 
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Rumour has it (from an MP and I cannot disclose the source sorry) that when the 'announcement' is made in a couple of weeks regarding the Dec 02 globe and mail article...that the requirement will call for US citizens to begin filing for 2011 only...1040, FBaR, and 8839 (assuming it is cleared from draft form).

This is good new for those who have waited, but late news for those of us who have spent thousands of dollars trying to comply :(
 

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Rumour has it (from an MP and I cannot disclose the source sorry) that when the 'announcement' is made in a couple of weeks regarding the Dec 02 globe and mail article...that the requirement will call for US citizens to begin filing for 2011 only...1040, FBaR, and 8839 (assuming it is cleared from draft form).

This is good new for those who have waited, but late news for those of us who have spent thousands of dollars trying to comply :(
True, but no one could know for sure. In my case the irony is that I would have been better off not filing at all and starting now rather than filing all these years but with unintentionally under-reported income.

As for fbars being audited, they'll get all the detailed information about the accounts and maximim values from the upcoming 8938 form which will have to be directly attached to the tax return. most of what they'd want to know was already reported on my 8621s so I doubt they'll want to audit me....it wouldn't be viable, especially with me going to them first. Might be different if they'd discovered me or thought I was guilty of fraud, or talking millions...

Think they will be more interested in the low hanging fruit back back home and the cheating billionaires abroad. They are probably mainly reminding us they mean business going forward though.
 

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Rumour has it (from an MP and I cannot disclose the source sorry) that when the 'announcement' is made in a couple of weeks regarding the Dec 02 globe and mail article...that the requirement will call for US citizens to begin filing for 2011 only...1040, FBaR, and 8839 (assuming it is cleared from draft form).

This is good new for those who have waited, but late news for those of us who have spent thousands of dollars trying to comply :(
I will wait for the news to come out before I send anything in. As you saw from a previous post, the IRS is waiting with baited breath for my 2009 return. Does this mean now, that I don't have to send that in? I think not. So you see, the moral of the story, is that if you were being compliant with tax filing obligations from 1998-2008, but had lapsed out of fear of FBAR, you are much worse off than if you had never paid any attention whatsoever to any of the filing requirements.

The only real solution is to stop requiring offshore Americans to file. If they create ad hoc rules like this, it will just lead to further chaos and resentment.
 

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I have talked with a few local bank branch managers to find out if they will have to comply with FATCA. One was Canadian Western because I read somewhere that they would not fall under the FATCA umbrella. The first person I had to talk to in order to get to the manager looked at me like I was some wacko off the street. Finally the branch manager came out and told her that I was about the 6th person in a week to ask these questions and they were going to have to get educated about it. Maybe it has something to do with where I live but anybody I talk to about FATCA or FBAR think I am an FNUT. Finally that bank manager told me she had been trying to talk to somebody in the head office but because of holidays it was hard to get the time with the person with the answers. However, they did find it in their system and she felt they would have to comply.

I then made my way to Alberta Treasury Branch and asked an account manager there who had much the same experience as the other manager. Her answer guy was busy with holiday issues in the city and she wasn't able to get answers. It must be nice to be a banker this time of year.

Am I right to assume that all credit unions will be a reasonable place to move our TFSA's and retirement securities? If my husband was to move them (he is Canadian), would I still be considered criminal for doing so before my citizenship is in effect? I feel as if I am just spinning my wheels up here. I don't want to make any mistakes, but I do think it would be a mistake to leave everything where it is now. I am not impressed that our financial adviser didn't know about FBAR until now.
 
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Am I right to assume that all credit unions will be a reasonable place to move our TFSA's and retirement securities? If my husband was to move them (he is Canadian), would I still be considered criminal for doing so before my citizenship is in effect? I feel as if I am just spinning my wheels up here. I don't want to make any mistakes, but I do think it would be a mistake to leave everything where it is now. I am not impressed that our financial adviser didn't know about FBAR until now.
Don't assume anything about any financial institution, ask them. My credit union says they won't comply, but an association of credit unions in Canada (to which my credit union doesn't belong) says some of their members may have to eventually, due to dealings with banks. FATCA may have secondary and tertiary-level compliance requirements, that is, a bank can't do business with another institution that isn't compliant, and that may cause problems for some credit unions but perhaps not others. FATCA is incredibly intrusive.

However I think it's fair to assume that credit unions are going to be less sympathetic to FATCA than chartered banks, and that individual credit unions may cut you a little more slack about your citizenship affiliation than will a clerk in a chartered bank. It all depends on how the reporting "requirements" are worded and what documentation is "required" and what the institution will accept, assuming our government actually allows the reporting to occur. It's one thing to report place of birth (in fact to do so for US borns but not for everyone else would be illegal discrimination under Artlce 15 of the Canadian Charter of Rights and Freedoms). It's another thing to ask someone are you a US citizen yes/no -- there's nothing in the Charter preventing discrimination on the basis of citizenship (as distinct from place of birth or other definitions of national origin). Your answer to that latter question may be under penalty of perjury or uttering a false document, but someone has to prove that in court against you ;)

There is absolutely nothing wrong with your moving your money out of a bank and into a credit union, for any reason your heart desires. Ditto selling off any and all US-source investments in your investment portfolio and re-investing only in Canada. It's your money and no bank, no government in Canada, can deny you the right to deposit or invest your money in whatever bloody financial institution you want to. No one can prosecute you for moving your money around, unless you're laundering it into some REAL tax haven outside Canada. If you're dealing within Canada no one can tell you where you can or can't deposit/invest your money under what conditions. That applies to legal residents of Canada regardless of citizenship, as far as I know.

Yes what the US is doing is horrible and outrageous, but don't let paranoia trick you into worrying about things that simply can't and won't happen under any reasonable scenario short of the US becoming an absolute dictatorship and invading Canada. Tempting though it may be to attribute such possibilities to some of the stupidity and craziness of governments on both sides of the border, even I think such a worry would be way over the top. And as an avid NDP supporter and former US draft-dodger I think I can safely say there are very few, if any, people on this forum who are more inherently suspicious of and hostile to the United States and the Conservative Party under Stephen Harper's leadership than I am.

No one is going to arrest you in Canada for moving your money out of a Canadian bank and into a Canadian credit union. And if they did, I don't think such an action would stand up to a federal court challenge for five nanoseconds.
 
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Discussion Starter #170 (Edited)
This is good new for those who have waited, but late news for those of us who have spent thousands of dollars trying to comply :(
This is a prime example of why I’m so glad I live in a parliamentary democracy and not in a terminally screwed-up political system such as the US has.

Before Stephen Harper came along (this isn’t the place to get into a rant about everything that is wrong, not to mention not truly conservative, about our present federal governing party), in Canada legislation (and draft treaties and agreements) didn’t (and still shouldn’t) get into first reading in the House, or get signed in the case of international treaties and agreements, unless they’ve first been reviewed by experienced federal public servants in Finance, Treasury Board Secretariat, Foreign Affairs as well as in all affected or related line departments’ and agencies’ policy shops, then by Privy Council Office and by at least part of the federal Cabinet.

In the US, Bubba the Congressman or Bubba the Senator dreams up a crazy idea in a drunken stupor or whatever, moves it as an amendment to some other act of legislation which has little or no relationship to the amendment, no one reads the amendment in detail (and anyone who tries needs degrees in law and Swahili to be able to decipher the obtuse “language” in the amendment), and no one does a serious analysis of costs of administering the thing and possible unintended consequences and balances that against alleged benefits. The thing gets passed into law without any careful, rational analysis of it. Then somebody has to figure out how to administer it once the President signs it (and very few Presidents have the time, training or in some cases even brains to do their own analysis of what they’re asked to sign, nor do a lot of their staff persons).

And in a parliamentary democracy an opposition party or even a lone MP can stand up in Question Period and demand the government to explain why some citizens got screwed over on personal costs for trying to comply with some draconian tax law and those who waited don’t get screwed over, and what is the government going to do to compensate those poor citizens. Don’t hold your breath ever to hear about that happening on the floor of either house of the US congress. Never happens as far as I’m aware.

My blood boils when I think of all the bullcrap teachers pontificated to me in high school about how the US has the best, wisest form of government on the planet. Name me one other country that has adopted that screwed-up, paralyzed, illogical and irrational “checks and balanaces aka terminal gridlock” Rube Goldberg affront to any conception of “good government” that keeps thousands of lawyers, lobbyists and consultants in clover in Washington DC. Gee why aren’t other countries clamouring to have the same system of government they have in the US? Let me guess ...

And you have no recourse here in Canada because this isn’t a Canadian tax law, no one in our government asked for the US to do this, not even Harper would have been that perverse.

If anyone is looking for another reason to shed US citizenship, ponder the above. They did it to you once, they can very easily do it to you again. And they've been passing stupid, bad laws for a very long time.

Not that we're perfect in Canada, but in my experience and observation both from within and outside the federal government, we do a heck of a better job of providing "good government" than my poor beleagered friends and family south of the border get subjected to by their crackpot Congress.
 

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No one is going to arrest you in Canada for moving your money out of a Canadian bank and into a Canadian credit union. And if they did, I don't think such an action would stand up to a federal court challenge for five nanoseconds.
I don't mean to imply that I am worried about what the Canadian government would do. I have been working to get my citizenship in Canada before I ever heard of the latest US ploy to drain our retirement savings. But until I get that citizenship I feel almost like a woman without a country. I read somewhere on these forums that someone received advice from their lawyer that they should wait until after they received Canadian citizenship to move the accounts or it could be considered criminal in the USA. I have property there that I guess we will have to unload, I have family there that I would like to visit, but this threat from the US government has yes, made me paranoid and I will never trust them again. I want to make the move, but I would imagine that we are going to have to be careful that we don't end up owing taxes to CRA based on *how* we change things around. I am thinking of accounts where we would have been paying later when we started to draw from them. Frankly, I would like to get those that are in my name back into my husband's name but that probably would cost him some taxes. I will start seeking help outside of town next week. In the end, I guess I would rather give a little to CRA than to give it all to the IRS, but I won't do anything until they make an official announcement.

Thanks for the helpful reply!
 

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I don't mean to imply that I am worried about what the Canadian government would do. I have been working to get my citizenship in Canada before I ever heard of the latest US ploy to drain our retirement savings. But until I get that citizenship I feel almost like a woman without a country. I read somewhere on these forums that someone received advice from their lawyer that they should wait until after they received Canadian citizenship to move the accounts or it could be considered criminal in the USA.
Hi Omater: that may have been me. I wrote here: http://www.expatforum.com/expats/expat-tax/94539-fbar-penalty-canada-13.html

This is what I wrote:
I waited until after I was a Canadian to do this, so that the move itself would not be a crime--as the US would interpret this as an obstruction of justice --Conrad Black is sitting in a federal jail now for being caught on video, get this: moving boxes out of his Toronto office! So the federal government in the US likes to put people in jail for doing non-crimes in another country. I remember reading somewhere that moving my accounts in order to avoid the IRS finding about them is a crime. Like I care.​

Let me try to track this down; but honestly, I've read so much that I'm not sure I will be able to find it. I would go with Schubart. He is right. It is no criminal act to change bank accounts. But the thing is that the only reason it is necessary to move your accounts is to avoid FBAR. If you are planning to fill out the FBAR, then there is no point in moving anything. But since I've decided I'm not going to fill out the FBAR, then if I had moved my accounts while still a US citizen to a non-FATCA compliant bank in order to avoid detection of my non-FBAR compliant accounts--that could be interpreted as an obstruction of justice. Do you see what I mean? FATCA won't be in place until 2014, so there is no rush.
 

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Let me try to track this down; but honestly, I've read so much that I'm not sure I will be able to find it. I would go with Schubart. He is right. It is no criminal act to change bank accounts. But the thing is that the only reason it is necessary to move your accounts is to avoid FBAR. If you are planning to fill out the FBAR, then there is no point in moving anything. But since I've decided I'm not going to fill out the FBAR, then if I had moved my accounts while still a US citizen to a non-FATCA compliant bank in order to avoid detection of my non-FBAR compliant accounts--that could be interpreted as an obstruction of justice. Do you see what I mean? FATCA won't be in place until 2014, so there is no rush.
I remember, it was you. Thanks for the above! That makes me feel a little better as far as haste might go. But aren't some banks already filing that information away? The last time we invested (about 1 month before I ever heard of FBAR and FATCA) they asked me to sign a form that stated I was not an American citizen. In my ignorance, I didn't sign the form. The account manager knows I am. It is with RBC Dominion and as you know they are pretty thick in the soup.
 

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True. But if you have more than 25 accounts you can just list the number of accounts on the fbar form. .
You still have to report income on all the accounts, which is a bigger headache than simply listing them. Besides, I would think that having more than 25 accounts would be an additional reason for an audit flag to pop up on a return.
 

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You still have to report income on all the accounts, which is a bigger headache than simply listing them. Besides, I would think that having more than 25 accounts would be an additional reason for an audit flag to pop up on a return.
Too true and part of why I'm so scared. It's an an onerous mess that had been created completely unintentionally. Many of the accounts were for miniscule amounts because they included dormant nominee accounts from transferred mutual fund administrators; matured savings bonds which had been transfered out but which I stupidly failed to close the actual accounts themselves; dormant credit cards; sub accounts within main accounts; even travel cards and pre-paid cell phone sims!

Perhaps I've just made things even harder for myself but what's done has been done. I'm scaredbecause I don't have complete records....I'll have to hire an attorney if things get really bad. But I have lived in the UK for over 23 years, I never had any intention to defraud the US government, it was all completely unintentional but agree they may indeed want to audit me, especially as they will have six years to do so.

I'm wondering if I should ring the fbar hotline and ask them if I should send in more information explaining why I had such a huge number of accounts or if it might increase a risk of an examination. I figure they can write and ask for more information if it's really an issue.
 

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Hi there, Northof49. I am in a very similar situation as you. In fact, I too have not been a US citizen since 1984 due to my specific relinquishing acts. I have not yet gone to the Embassy and filed any papers, but I would be curious to compare notes with you a bit. When you are able to send a private message, would you mind contacting me please? I am also still trying to find qualified legal support as well, so I'm hoping that maybe you have some ideas there as well.

Thanks.
Hi Deckard,
Last month I attended at the US consulate in Toronto with my lawyer to file a formal application for a Certificate of Loss of Nationality (CLN), to which I attached a fairly detailed explanation (drafted for the most part by my US lawyer) of how and when I relinquished my US nationality through the expatriating acts of becoming a Canadian citizen and pledging allegiance to the Queen in 1984 and thereafter acting in a manner consistent with my intention to relinquish. The actual process was somewhat anti-climactic and oddly comic, in a grotesque Monthy Pythonish sort of way. As a side note, the US Consulate is an armed camp (quite literally - lots of Kevlar vested guards bearing automatic weapons behind bulletproof glass). What we didn't know was that cell phones and any other electronic equipment (including key fobs and computer mice) are not allowed inside and no provision is made for storing them anywhere outside. If you make the mistake of coming there with a cell phone it's up to you to figure out what to do with it out on the sidewalk. We wandered around in the cold until we found a security guard who recommended that we go to the bar in the Rex Hotel (I'm not making this up) . Seems the barkeep there has a nice little sideline in holding onto cell phones and the like for two bucks while the owners attend at the US Consulate. Ah, capitalism! Anyway, when we finally got inside, the famous Ms. Anderson was nowhere to be found. She wasn't in and left no instructions to anyone. While we were waiting for them to retrieve the file, the head consular officer (Ms Anderson’s boss, as she rather brusquely informed me) told my lawyer that he had no right to be there and that it was consular policy not to permit anyone to be represented by counsel. (According to her this policy is to avoid overcrowding, although when we were there only one other applicant was present.) This came as a surprise to him since he had made it quite clear to Ms Anderson that he was acting as my lawyer and would be attending at the consulate with me. She also asked why I thought I needed to be represented by an attorney since the process was very straightforward. When I tried to explain that the process and the legal issues did not seem to be at all straightforward and that the distinction between renunciation in the present and confirmation of relinquishment in the past seemed to be lost on many staff, she cut me off impatiently and later took me aside and said, in so many words, that I was foolish to spend money on a lawyer for something so routine. The clerk who handled the actual application then proceeded to demonstrate how (un)routine it was: he obviously had no idea what I was talking about and simply had me sign and swear the application that I had already filled out. So there was no interview at all, and in fact for this part of the process there was no need for my lawyer to be present. I gathered from my lawyer that the drill in Ottawa may be different: there they had no objection to his being present but subjected his client to a two hour grilling. Anyway, if you decide you need a lawyer, I would recommend Stephen Flott of Flott & Co in Virginia. (The Webmaster won't let me include his email but you can Google him.) He’s done a number of these applications and knows the drill. However, he is not cheap.
 

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... the head consular officer (Ms Anderson’s boss, as she rather brusquely informed me) told my lawyer that he had no right to be there and that it was consular policy not to permit anyone to be represented by counsel. (According to her this policy is to avoid overcrowding, although when we were there only one other applicant was present.) This came as a surprise to him since he had made it quite clear to Ms Anderson that he was acting as my lawyer and would be attending at the consulate with me. She also asked why I thought I needed to be represented by an attorney since the process was very straightforward. When I tried to explain that the process and the legal issues did not seem to be at all straightforward and that the distinction between renunciation in the present and confirmation of relinquishment in the past seemed to be lost on many staff, she cut me off impatiently and later took me aside and said, in so many words, that I was foolish to spend money on a lawyer for something so routine. ...
If someone successfully relinquishes does that mean their loss of citizenship is effective to the date they did the expatriating act? In your case, would your CLN be effective 1984? If that is the case then are you released from requirement to file IRS returns and FBARs? If yes then it is absolutely worth some legal fees!!! :clap2:
 
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If someone successfully relinquishes does that mean their loss of citizenship is effective to the date they did the expatriating act? In your case, would your CLN be effective 1984? If that is the case then are you released from requirement to file IRS returns and FBARs? If yes then it is absolutely worth some legal fees!!! :clap2:
Excellent question, Peg. It needs a lawyer or a court challenge, alas, I think anyway.

My understanding is as follows:

The instructions on Form 8854 seem to indicate that the IRS considers that the date of expatriation "for tax purposes" is the date you notified State of your relinquishment, not the date of the actual expatriating act (in this case in 1984). That isn't absolutely clear in the instructions, because the date ranges only go back to 2004. But the wording in the instructions, and also in another IRS website I found
Publication 519 (2010), U.S. Tax Guide for Aliens seems to imply, and it of course is confusing in the latter link but I think the implications are, that even before 2004 your relinquishment date "for tax purposes" would be when you notified State (now, in 2012).

According to another website I can't lay my hands on at the moment, the law or regulation passed by Congress decreeing that "for tax purposes" relinquishment is when you tell State not when you committed the actual act, was passed in February 1996 (or maybe 1994 but no earlier than that). Given that the US Constitution forbids Congress from passing ex post facto laws, it seems to me that this "for tax purposes" interpretation by the IRS would be illegal if they tried to apply it to people who committed an expatriating act voluntarily and with intent to relinquish (and can support this with balance of evidence on form DS-4079) any time prior to 1994 or maybe 1996.

In which case the applicable law is what was in effect in 1984, which was you were liable for taxes for ten years after reqlinquishing if you met the income tests (no mention made back then of tax filing though ...) however by 1994 and certainly 1996, never mind 2012, you are way past the ten-year window. (We won't grapple with who can possibly file back taxes in 1984, no one I know keeps receipts and tax returns back 28 years I sure don't).

The rubber hits the road when State tells IRS of your CLN in 2012 and IRS sends you the form 8854. You could write back to IRS and tell them you aren't going to comply with any forms, because your relinquishment (which State definitely should date to 1984 as long as you didn't do something regrettable later like apply for a US passport) pre-dates the legislation under which form 8854 was created, hence is ex post facto application of a law and hence unconstitutional. The ball then is in their court whether to tell you they're fining you $10,000 for not filing their form (they say they can repeat this fine every year you continue not to file it), and then in your court whether to tell them to get stuffed, not to cross the border, or hire a lawyer to fight it in US court.

If you don't need or want for family or business reasons to go to the US ever again, I would simply refuse to file any tax forms including 8854 in your case, assuming that you've gone through all the subquestions under item 13 on State's form DS-4079 and can swear you haven't maintained any significant connections with the US as listed under that heading -- particularly getting a US passport, living and working in the US unless with a green card, owning property (arguable), etc. I don't think they can possibly come after you for penalties for non-filing of 8854 or other forms as long as you stay in Canada, but again, get legal advice (from a CANADIAN lawyer) on this point before doing anything.
 

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Excellent question, Peg. It needs a lawyer or a court challenge, alas, I think anyway.

My understanding is as follows:

The instructions on Form 8854 seem to indicate that the IRS considers that the date of expatriation "for tax purposes" is the date you notified State of your relinquishment, not the date of the actual expatriating act (in this case in 1984). That isn't absolutely clear in the instructions, because the date ranges only go back to 2004. But the wording in the instructions, and also in another IRS website I found
Publication 519 (2010), U.S. Tax Guide for Aliens seems to imply, and it of course is confusing in the latter link but I think the implications are, that even before 2004 your relinquishment date "for tax purposes" would be when you notified State (now, in 2012).

According to another website I can't lay my hands on at the moment, the law or regulation passed by Congress decreeing that "for tax purposes" relinquishment is when you tell State not when you committed the actual act, was passed in February 1996 (or maybe 1994 but no earlier than that). Given that the US Constitution forbids Congress from passing ex post facto laws, it seems to me that this "for tax purposes" interpretation by the IRS would be illegal if they tried to apply it to people who committed an expatriating act voluntarily and with intent to relinquish (and can support this with balance of evidence on form DS-4079) any time prior to 1994 or maybe 1996.

In which case the applicable law is what was in effect in 1984, which was you were liable for taxes for ten years after reqlinquishing if you met the income tests (no mention made back then of tax filing though ...) however by 1994 and certainly 1996, never mind 2012, you are way past the ten-year window. (We won't grapple with who can possibly file back taxes in 1984, no one I know keeps receipts and tax returns back 28 years I sure don't).

The rubber hits the road when State tells IRS of your CLN in 2012 and IRS sends you the form 8854. You could write back to IRS and tell them you aren't going to comply with any forms, because your relinquishment (which State definitely should date to 1984 as long as you didn't do something regrettable later like apply for a US passport) pre-dates the legislation under which form 8854 was created, hence is ex post facto application of a law and hence unconstitutional. The ball then is in their court whether to tell you they're fining you $10,000 for not filing their form (they say they can repeat this fine every year you continue not to file it), and then in your court whether to tell them to get stuffed, not to cross the border, or hire a lawyer to fight it in US court.

If you don't need or want for family or business reasons to go to the US ever again, I would simply refuse to file any tax forms including 8854 in your case, assuming that you've gone through all the subquestions under item 13 on State's form DS-4079 and can swear you haven't maintained any significant connections with the US as listed under that heading -- particularly getting a US passport, living and working in the US unless with a green card, owning property (arguable), etc. I don't think they can possibly come after you for penalties for non-filing of 8854 or other forms as long as you stay in Canada, but again, get legal advice (from a CANADIAN lawyer) on this point before doing anything.
It is my understanding that FBAR is not a tax. I agree that if the relinquishing act predates the law, then the law should not apply. What I am wondering is if the law saying that the date of relinquishment is the date I notify the state department might only apply to taxes. Could people like me who committed a relinquishing act decades ago at least be off the hook as far as the FBAR's go?
 

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If someone successfully relinquishes does that mean their loss of citizenship is effective to the date they did the expatriating act? In your case, would your CLN be effective 1984? If that is the case then are you released from requirement to file IRS returns and FBARs? If yes then it is absolutely worth some legal fees!!! :clap2:
That is certainly the result that is being sought. It would definitely not be worth the time, effort and expense if the CLN ends up being dated currently. In fact, this would be the worst possible result because it would produce a huge, immediate exit tax liablity for all capital gains on all my assets as if they had been sold on the date of renunciation. I raised this point repeatedly with the lawyer and he seems confident that we can get it backdated.
 
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