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Discussion Starter · #1 ·
Hello all, been reading here for a while and have found much useful information on this board. I am a US born expat, have lived in Canada since age 5.

I've recently filed streamlined going back 3 years and 6 years for FBar, 2012, 2013 and 2014. Will file 2015 next year in the Spring of 2016 and also file 2016 in early 2017. This will fulfill the 5 years of prior compliance requirement.

The US consulate where I live is getting booked a long way in advance for renouncements. I want to get an appointment made for as early in 2017 as possible, approx 18 months from now. My question is this...

Should I wait in 2017 until I have actually filed 2016's taxes, or would I still meet compliancy if I actually filed sometime prior to Mid June of that year, after renouncing earlier in the year?

I realize that 8854 will not go in until 2018, but do not want ANY risk of being a covered expatriate due to a sequence technicality such as I have just described. The goal exists however, to renounce at the earliest possible time due to the $2m net worth requirement.

Could someone in the know please chime in and advise.


Thanks,
Ersterhernd
 

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I would renounce at the soonest possible date, and if you need to back-file additional past years to make up the five-year requirement, do that. You could also accelerate the process by finding a consulate with a shorter waiting list, and travel there. Doesn't need to be in Canada - you could combine that with a beach vacation to Mexico, perhaps.
 

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Discussion Starter · #3 ·
The path we have chosen was decided to keep inside the parameters defined in the streamlined program. I wanted to file 5 years straight away, but was advised not to by my tax professional.

This topic is actually the subject of some debate, so I've read. Our first concern was to become tax compliant and then focus on renouncement.

Filing back two additional years is possible I guess. Perhaps some additional comments from this board are in order.

Thanks.
 

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Have you possessed Canadian citizenship since birth? Are you a long-term tax resident of Canada who has had little or no recent residence in the United States? If the answer to these questions is yes, it doesn't matter what your net worth is (or the unrealized gains): you will not owe U.S. Expatriation Tax.

Refer to IRC 877A for more details if you're unfamiliar with this exemption.
 

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There doesn't seem to be a firm connection between renouncing US citizenship and punching out of the US tax system. Apparently a number of people (on this board or known by folks on this board) have renounced and simply ignored the tax requirements, and have never (yet) heard a peep from the IRS. I wouldn't necessarily recommend this, but it suggests that it's not that big a deal.

I certainly would not wait two more tax years to renounce, if I'd decided to renounce.
 

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Discussion Starter · #6 ·
Have you possessed Canadian citizenship since birth? Are you a long-term tax resident of Canada who has had little or no recent residence in the United States? If the answer to these questions is yes, it doesn't matter what your net worth is (or the unrealized gains): you will not owe U.S. Expatriation Tax.

Refer to IRC 877A for more details if you're unfamiliar with this exemption.
I was born in the USA, lived there for nearly 5 years before our family moved to Canada. We've been here ever since. Never worked or went to school in the USA.

I am assuming this means I am still subjected to 877A2 A,B and C. I applied for and received Canadian Citizenship about 20 years ago. I have read extensively on this and have never thought for a minute I'd be exempt from the rules defining covered expatriates.


Ersterhernd
 

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Discussion Starter · #7 ·
I certainly would not wait two more tax years to renounce, if I'd decided to renounce.
Believe me, I'd renounce at a drive-thru window tomorrow morning if I could. This whole thing has caused me a ton of upset and worry.

That said, I want to proceed very methodically from here to ensure its done right and I get the tax-free exit I'm looking for. Too much is at stake to be a covered expatriate.


Thanks,

Ersterhernd
 

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Believe me, I'd renounce at a drive-thru window tomorrow morning if I could. This whole thing has caused me a ton of upset and worry.

That said, I want to proceed very methodically from here to ensure its done right and I get the tax-free exit I'm looking for. Too much is at stake to be a covered expatriate.
In that case I'd call around, as it were, and see where you can renounce the quickest. Then when you've done so, file any remaining tax stuff and you're free and clear.

You or your tax professional - whose advice may come with a specific set of biases - may be drawing too much of a connection between the requirements of the streamlined program, and what you are supposed to do after renouncing to exit the tax system. But what do I know (as a happy conscientious objector)?
 

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Discussion Starter · #9 ·
In that case I'd call around, as it were, and see where you can renounce the quickest. Then when you've done so, file any remaining tax stuff and you're free and clear.

You or your tax professional - whose advice may come with a specific set of biases - may be drawing too much of a connection between the requirements of the streamlined program, and what you are supposed to do after renouncing to exit the tax system. But what do I know (as a happy conscientious objector)?

Its been amazing in consulting with various tax pros that there is such a wide variety of opinions out there on backfiling. As a stated in a previous post, tax compliancy was my first priority, along with FBAR reporting, to get out of the 'penalty zone'. The information available about streamilined filing says nothing about backfiling beyond three years. I wish it did, one way or the other.

Has anyone here done this? File back 5 years?


Ersterhernd
 

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I think that people who want to become tax compliant file back three years, because that's all they need to do for the streamlined program, whereas people who want to renounce file back five years, because that's required for the exit procedure.

I can't imagine that doing the streamlined program somehow means that you should not file two additional years, which is what you'd do if you were planning to renounce, but that's just a guess on my part.
 

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I was born in the USA, lived there for nearly 5 years before our family moved to Canada. We've been here ever since. Never worked or went to school in the USA.

I am assuming this means I am still subjected to 877A2 A,B and C.
Birth in the United States is perfectly fine. Plenty of individuals born in the United States qualify for the exemption I described. But....

I applied for and received Canadian Citizenship about 20 years ago.
That fact violates the necessary condition I described upthread: possession of Canadian citizenship from birth. Since you haven't possessed Canadian citizenship from birth, unfortunately you cannot qualify for that particular U.S. Expatriation Tax exemption.
 
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