Assessing my options for addressing my newly-discovered ‘delinquent’ US tax situation

I described in my last post how, at the tender age of 23, I arrived at what others have called the “oh my god” moment – discovering that the government of a country where I haven’t lived for many years apparently expected me to be filing and potentially paying taxes, simply for having the citizenship of that country.

I am speaking about the United States’ unique policy of citizenship-based taxation (CBT), which means that from the US government’s perspective, it doesn’t matter that I have resided in the United Kingdom (where I am also a citizen) with my family since I was a minor. As a US citizen, “the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether [I am] in the United States or abroad. [My] worldwide income is subject to US income tax, regardless of where [I] reside.”

In reality this discovery was the first in a long series of “oh my god” moments as I attempted to unpick and understand the implications of citizenship-based taxation, which is the topic of this post.

The more I learned, the clearer it became that as long as I:

a) remain a US citizen, and

b) refuse to uproot my life to move to the US under duress;

I was, am and forever will be running the gauntlet of the USA’s extraterritorial tax system – with its complex, onerous and punitive rules and enforcement mechanisms on overseas citizens – because my life is by definition “offshore”.

What could I do to square my situation and not be ‘delinquent’?

On discovering the initial CBT bombshell I panicked because I wasn’t ‘compliant’, which was disturbing in itself for someone who has always been law-abiding. “So what?” says the rational but uninformed onlooker (including myself, as a first reaction), “just start filing this year and all will be well.” Unfortunately, as one becomes more informed about the USA’s taxation policies for overseas Americans, straightforward responses show themselves to be unworkable or to carry risks that aren’t always possible to estimate.

It wasn’t clear what I should file

First, I couldn’t confidently figure out exactly what forms and schedules I needed to file for the current tax year as an overseas citizen. I consider myself to be an intelligent person, but I didn’t find the IRS instructions to be user-friendly in the slightest.

I tried to seek information elsewhere, visiting message boards online which offered conflicting amateur advice and plenty of horror stories about honest mistakes being fined by the IRS. I looked into getting professional help, but the prices that these niche, international tax specialist firms were charging was an awful lot of money for 23-year-old me, and filing with professional help still seemed to be risky when I read that even tax preparers struggle with the complexities of overseas citizens’ returns, and have been known to make mistakes for which their clients have to pay. There was also the profound indignation I felt towards  paying an accountant thousands of dollars to show that I don’t even owe any money to the US (given that I earn my salary and am taxed on it in the UK).

FBARs

I then discovered that there were potentially large penalties, or even the threat of incarceration, involved because of certain things I hadn’t been filing, even if I hadn’t owed any actual taxes. In particular, because I hadn’t been reporting any of my UK bank accounts to the US Financial Crimes Enforcement Network every year[1], I could theoretically be liable for imprisonment under US law, or face large financial penalties – $10,000 per account for every year not reported is the minimum fine for when the IRS agrees that you didn’t know you had to file, or that you were acting in a ‘non-wilful’ way.

With the concept of ‘wilfulness’ being somewhat nebulous to prove (how do you prove you didn’t know something?) and open to their own interpretation, it seemed like there was some risk, however impossible to quantify, that entering the system could create a nasty situation for me before my adult life had really begun. Again, as someone who had always been law-abiding, all this talk of penalties and prosecution was terrifying, even if the chance it would affect me was small.

PFICs

I then discovered more alarming news. Back in the days when I had thought I was free to save and plan for my future in the country where I live, I decided to start saving a bit of money and made small investments in some UK-listed mutual funds – nothing remotely exotic, just small holdings in things like a FTSE 100 tracker fund.

According to US tax law, I shouldn’t be investing outside of America. If one happens to have US citizenship, even a FTSE 100 tracker fund held in the UK by a UK citizen and resident is a “passive foreign investment company”, or PFIC, to the US government. A PFIC has one of the most complex tax forms that need to be filled out for every mutual fund held (once one has more than $25,000 invested across non-US mutual funds), with the IRS estimating each form to take 22 hours of preparation per year. They carry a very punitive tax rate (39.6% or up to 50% of capital gains).

The chorus all over the internet from professionals and armchair accountants sang unanimously: “do not buy or sell any mutual funds ever without legal and accounting help!”  Well, s***. I was far under the $25,000 mark but I stopped my monthly payments going into my investment account and I haven’t bought or sold anything since – all I am comfortable saving while subject to this system is cash.

How I should file – quiet disclosure, Streamlined Compliance Program, OVDP?

Beyond the question of what to file was how to file as a ‘delinquent’ who was not in the system yet. It turned out I couldn’t just start sending in tax returns from the current year – I would have to ‘back-file’ a number of years or risk the IRS punishing me for earlier non-filing (which, according to forums and tax advisers’ websites, they had been known to do).

So, perhaps I should just send in filings covering the last few years and then keep filing each year going forward. That surely wouldn’t be too difficult. Except that the IRS refers to this approach as “quiet disclosure” and discourages it strongly. They want non-compliant overseas filers to formally announce their non-compliant status when they file for the first time by entering one of two main programs: the ‘streamlined’ procedure (file three years of federal returns and schedules, five years of bank account reporting, and an explanation of why your non-filing was non ‘wilful’) or the Overseas Voluntary Disclosure Program (8 years of tax returns and FBARs, plus any taxes due, interest charged on the taxes that weren’t paid before, a 20% penalty on whatever was owed, and often a 27.5%, or in some cases 50%, penalty on the highest offshore account balance). Streamlined clearly looked better from a financial perspective, but then one has no assurance that the IRS will agree that the non-filing was ‘non-wilful’ (so they could decide to prosecute you), whereas the OVDP is meant to protect you from any chance of prosecution (in exchange for inordinate amounts of money and by the looks of it, whatever sanity you had left).

Trying to come into compliance means exposure to the risk of penalties

So, the ‘rational’ choice to enter the system and start filing turned out to to have a lot of risk attached to it – the risk of being fined for making mistakes on complex forms that I have never filled in before, the risk of not filing all the forms and schedules I am supposed to, the risk of being fined because the IRS might decide that I wasn’t reporting my bank accounts on purpose, the risk that I couldn’t continue to invest optimally for my future, because once I was in compliance I would no longer have the excuse of ignorance to keep saving into my UK mutual funds without encountering ‘PFIC’ filing.

“So,” says our rational onlooker defiantly after agreeing that this is all a ridiculous mess, “just don’t bother entering the system. Ignore it, they’ll never find you or come after you.”

FATCA

I probably would have been content to kick the can down the road and ignore the situation for a while, but then I learned about FATCA. FATCA (the Foreign Account Tax Compliance Act) was pushed through by the Obama administration. It is a law which requires Foreign Financial Institutions (i.e. banks and other institutions operating outside of the US) to report to the IRS the accounts of their American customers, or face a 30 percent withholding penalty on their transactions in American financial markets. Naturally, being cut off from US markets would be like telling the US to pull the trigger on the gun pointed at their head for many international financial firms, so they have all signed up and agreed to share the information, and/or decided to dump their American customers for being too much compliance hassle (especially smaller customers).

Suddenly, I feared that my banks in the UK might already know that I was a US citizen (I opened the accounts a long time ago and do not recall whether they asked me about my dual citizen status). Even if they didn’t know, it could be a matter of time before they ask me to confirm or deny it. I read about others in Europe receiving letters asking for legal proof that they are not American, or saying that the account will be closed because they are American.

What would I do if my banks asked me if I’m American? Lie to them? Pretend that I’m not American for the rest of my life and hope that the rules change? Tell the truth and potentially have my accounts closed, or have my details passed to the IRS before I’ve decided what to do? All of this heightened my paranoia that it was only a matter of time before the IRS was coming to ‘get me’. I didn’t yet have enough money saved up that I would reach the FATCA reporting requirement of $50,000, but after some years of saving money I would, so it didn’t make sense to ignore the situation.

Move to the US to escape the nightmare?

At this point the rational onlooker, racking their brain, often asks, “why don’t you just go back to the USA if it’s so complicated to live outside?” Of all the potential options available to me for dealing with this situation, this the very last thing I would do. Why should I be forced by bad policies to leave my home in Europe and come to live in the US when I am doing absolutely nothing wrong? It’s a human right to be able to freely leave and return to one’s own country (see Article 13 of the Universal Declaration of Human Rights). Surely it is an obvious corollary right to be able to leave and NOT return to one’s country.

Damned if I did, and if I didn’t

So, to recap, the options so far were (in no particular order):

1) Enter the system with specialist professional help, incurring professional expenses and risking penalties for previous non-filing and for mistakes or omissions the preparer might reasonably make;

2) Enter the system without professional help and face a bigger risk of penalties for omissions, mistakes, and penalties for previous non-filing;

3) Do nothing, and risk getting found out later on and having to incur even bigger expenses and penalties than in options (1) and (2);

3.a)  Lie to my banks if they ask me if I’m American, risking whatever punishment that would entail under UK law;

3.b) Freely admit to my bank that I’m American if they ask, and risk having my account shut and/or being highlighted to the IRS without my knowledge by my own bank and the UK government;

4) Move the United States, radically changing the course of my life for no other reason than to be able to live a normal financial life and save for retirement.

 

Renunciation: the nuclear option

There was, and is, one final, nuclear option – to legally renounce my US citizenship. This would mean shedding my US passport and right to return to the country forever. If I had never lived in the US, or was sure I never wanted to live there, this option would make the most sense.

However, I’m not a so-called “accidental American”. I do have an emotional attachment to the US through my family and childhood experiences. As I described in my first post, I have spent my life considering myself to be as American as I am English, and I hate the thought of telling my father and relatives that I am not a US citizen anymore. My citizenship belongs to me as a birth right and I feel that it is wrong on a very deep level that anyone would be forced by tax policy to consider giving up their citizenship to live a free and normal life.

That said, even if I decided that the situation was totally unworkable in the long run and renunciation was the least bad option, it would not be an easy task. I would still have to enter the tax system and be able to prove five years of compliance (thus exposing myself to the penalty risks and expenses). I would then have to pay $2350 to complete the renunciation process, which is almost one month of the average gross salary in the UK, and a price much higher than any other country’s renunciation fee.

All this, and for what?

In the period after the initial “oh my god” moment I felt seriously paranoid, scared and confused about what I should do. The whole concept of citizenship-based taxation was so bizarre to me, and its enforcement rules so disproportionate, that trying to come to terms with it all could be best described as disorienting. ‘Surely this is all just a big misunderstanding,’ I often thought, ‘or a bad dream!’

I didn’t even speak to anyone outside my immediate family about the situation until after I decided to become compliant (a decision I will explain in my next post), because I was worried that people might think I was somehow to blame.

It is bad enough that innocent Americans (dual or otherwise) overseas are discovering these rules by accident, but it is shocking that when looking to understand and make things right, we are faced with such an abysmal and often terrifying set of choices that the dramatic and irrevocable act of giving up our citizenship is on the shortlist of options for dealing with it – and often seems to be the only real option to live freely and normally once more.

Why does the US government want to make our lives so difficult when we have done nothing wrong? Why are they burdening us to continually prove that we are innocent, and invading our privacy using third parties and foreign governments to make sure that we’re telling the IRS the truth? Why are they terrorizing us with threats of bankrupting penalties, incarceration and (very recently) passport revocation? What exactly are they hoping to achieve, when the vast majority of us do not even make enough money to owe taxes to the US?

Can they talk about the ‘land of the free’, or being ‘leaders of the free world’ with a straight face anymore?

 

 

[1] The reports are known as FBARs, and all Americans overseas have to file them for each of their local accounts annually if the overall balance is $10,000 or higher at any time in the year

 

 

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Assessing my options for addressing my newly-discovered ‘delinquent’ US tax situation

25 thoughts on “Assessing my options for addressing my newly-discovered ‘delinquent’ US tax situation

  1. Good post which should be read by anybody shortly after experiencing their “OMG Moment”. You have identified many of the difficulties of compliance imposed by U.S. law and the associated life restrictions.

    The good news is that you have discovered these problems while you are young and (in all liklihood do not have significant retirement assets). Had you had your “OMG Moment” later in life, it would have been much more difficult for you to have dealt with this situation.

    Given your emotional attachment to the USA, I expect that you are not ready to renounce your U.S. citizenship. But, after having run the compliance gauntlet for a few years you may change your mind.

    Incidentally, it is much harder to understand all of the aspects of the tax rules that govern the lives of Americans abroad than to deal with the situation. My experience suggests that you are in no danger of penalties.

    That said, I look forward to your next post.

    John Richardson

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  2. Kelly says:

    Option 3.a won’t work if you have a U.S. place of birth – anyone born in the U.S. is presumed to be a citizen unless they can prove they have renounced/relinquished their U.S. citizenship (or show that they had a parent in the U.S. for diplomatic purposes at the time of birth).

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  3. manny says:

    The tax preparing people I have talked to in Canada have the line: “if you’re not a big fish” don’t worry. But anyone who has a little house, a car, has over $100,000 . So what is a “little fish”. I noticed that the US mutual funds sold online, take 15% off the top for taxes. It is beyond me how to fill the forms and for the small amount I make I could never afford a tax person. And if you own a house in Vancouver you are probably a millionaire or more.

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  4. This expresses really well the thought process I went through when i learned about CBT. But I was older and had lived abroad for so long that I decided to renounce, which I did in November. It made me incredibly sad, but I didn’t want to live the rest of my life with that kind of anxiety. Good luck, whatever you decide to do!

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  5. Edelweiss says:

    I feel for your predicament. The good news is that you are discovering all this relatively early in life and you can make choices, going forward, that would minimise the harm inflicted on you by the US government if you want to preserve your US citizenship. You are also born dual living in the country of your “other” citizenship which means that you won’t have to pay the exit tax (and up to 39.6% of all your retirement assets) if you do renounce unless you move out of the UK or fail to certify that you have 5 years tax compliance. So if you make it big in the City, it won’t prevent you from being able to renounce in the future.

    If you want to minimise the harm:
    – a company sponsored defined contribution scheme is, I think, generally considered ok and the investments within it don’t have to be reported as PFICs. The UK is one of the few countries where the US recognises the pension scheme. Get tax advice if offered an opportunity to work in another country.
    – you should still think about maxing out yearly contributions to an ISA. There’s no benefit if you maintain US citizenship because the US will tax the dividends and capital gains it generates but if you change your mind down the line, the ISA is a powerful tax shield and you’ll have made multiple years of contributions.
    – you can invest via “mutual funds” but this can only be done via US registered funds that are also HMRC reporting funds (HMRC has a list of reporting funds and you would have to do some digging to find the US registered ones). It, however, means investing in USD and taking currency risk.
    – otherwise, stick to investing in individual stocks
    – hope that your employer is sophisticated enough that, if you advance your career, the equity participation and deferred compensation schemes are designed with US citizens in mind (this is almost certainly the case for investment banks; not sure about other parts of the City eco-system). If for some reason they aren’t, this could be hugely problematic. If the trigger points on awards aren’t aligned you could find yourself owing US tax on money you haven’t yet received. You should also hope that your employer can’t be considered to be a PFIC.

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  6. JD says:

    I had left the US with the clear intent to relinquish, however I misread the many forms & ended up having to do so “retro-actively”. I’m still waiting, nearly a year now, for “news”/CLN as we speak. It was less sad for me (as I had already decided for other reasons) but still angering: simply put, the USA will have nothing to do with RBT (residence-based taxation) because they are now wielding CBT as a data/power/money-mining Excalibur over the rest of the world.

    What began as a way to stop people from deserting the Civil War(!) has now been resurrected as an ugly, financial warfare (lawfare) weapon. The USA is using the rest of the world’s wealth to prop it up after it’s own corruption destroyed it’s middle-class in favor of it’s 1%. That’s just the plain truth. Now, that same 1% want MORE!

    Imho- EVERY US citizen who intends to remain outside of the US as a citizen of another country should renounce–> as I have zero trust in things getting better (& looking at it now, could get much worse). To me, it is the 1st of only 2 choices that makes sense (the other “go back where you belong”, under duress, not so appealing). The already onerous compliance costs/headaches on the part of foreign countries may end up forcing an end to ANY USA citizen EVER attaining a dual-citizenship from this point forward…who knows? It seem counter-productive for the US gov’t to make their citizens unable to move freely in the world– unless the point is that any US cit. who travels & meets their “sweetie” will BOTH have to return to the US “nest” and remain their as worker-bees? Nothing sounds paranoid any more, & that’s really the point. It’s nuts!

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  7. Alex says:

    Well, you’re still home free. You should be glad you weren’t born in the US. (Yes, it does make *the* huge difference!) You don’t have a US birthplace in your passport, so you still have the option of lying to your bank. (If you’re not sure what you told your current banks, you can start over at other banks showing your UK passport with your UK birthplace.)

    All those US expats who have their birth taints marked in their passports won’t be able to have bank accounts when they can’t comply with those byzantine rules. They’ll likely starve to death, given that they won’t be able to work on account of governments’ war on cash.

    If you have any moral qualms about lying, lying isn’t always bad. Lying to your bank about being tainted with the toxic citizenship is no different from lying to the nazis about Jews hidden in your attic. You still might want to check with a lawyer about any possible UK legal consequences, though.

    And you likely wouldn’t be able to travel to the US (or at least travel there safe from arrest). But you don’t seem to do that often, anyway.

    If I had the blood taint, I wouldn’t even dream of entering the US tax system in a billion years. From what I’ve heard, it’s impossible to comply, and certainly impossible to comply and have a life.

    About renouncing, I’d hate being blackmailed into paying them $2,350+ more than not being allowed to return to that country. BTW, although the claim pops up online frequently, I don’t think you have to be tax compliant to renounce.

    Mike Gogulski renounced in 2008 without being tax compliant. He had to state under penalty of perjury whether he was tax compliant, and as he truthfully checked no, he had to promise he would send yet another special form to the IRS every year for ten years, or failing to file, owe a fine of $10,000 per form.

    If you don’t ever travel to the US, they can’t collect the $100,000 in fines, anyway. Rarely, if ever, is anybody extradited over tax fines.

    Finally, it amazes me that you still want anything to do with that country after how its government screwed you over. If one supports America’s founding principles, how can one feel anything but horror at what that country has turned into?

    Anyway, thanks for sharing your experience and best of luck.

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    1. Thanks Alex. I didn’t (and don’t) want to exile myself from the US, on account of having family and friends there, and even if I had been willing to do that, then I feel that anyway it would be best (for me personally) to get out of the system formally via the compliance and renunciation route to not have any lingering doubts or fears. I fully understand people choosing not to enter the system, however. I guess it has a lot to do with appetite for risk and how much one stands to lose by entering the system. Given that I’m quite risk-averse and, at my age, have relatively little to lose by coming into compliance compared to someone who is retirement age, this is the option I chose. What I do in the near to medium future remains to be seen.

      As for your last point – that’s a tricky one to answer – I may try and address it in my next post if I can!

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  8. Grisons says:

    My daughter is just about the same age as you and is in little better predicament. She started filing as soon as she got her first job and started filing FBARS as soon as she reached $10k in savings. She has not ventured into investing yet and I tell her to buy physical gold which doesn’t have to be claimed on the FBAR or 8538 (for now). She still is just in cash at the bank which pays 0%

    You wrote: “My citizenship belongs to me as a birth right and I feel that it is wrong on a very deep level that anyone would be forced by tax policy to consider giving up their citizenship to live a free and normal life.”

    My advice to you and all readers of this blog is to cut through this spiderweb of deception that woven over our entire existence. 90% of what you have learned in school and from your family and peers are lies:
    – Neither of your slave-master governments are “democratic” or even representative
    – The entire worlds media are telling you lies to lull you into accepting your fate as a tax slave
    – There is no social contract
    – Both the US and UK cavalierly sacrificed millions upon millions of lives of their “citizens” (and victims) over wars of conquest going back centuries
    – Therefore these governments are illegitimate, especially until they come clean about what they have done to their “citizens”
    – You should start reading up on revisionist history to find out the truth. Here is an excellent podcast/youtube explaining the truth of the Spanish American war.
    – You should also learn about the Indian wars, the Boer war, the Opium war. Don’t accept lies from main stream “historians” like Churchill. These were deliberately written to deceive you and turn you into a complacent tax donkey.

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  9. Did you commit an expatriating act? That means accepting employment in a foreign (non-USA) government, such as working at the polling station on voting day. By this you relinquished USA citizenship. However, you remain under USA laws a USA person until you check-out and that requires notifying the U.S. Consulate and obtaining a certificate of loss of nationality. Let them go fly a kite about the rest. Let the statute of limitations run out.

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    1. Hi Tom, I do have an eligible expatriating act based on the rules but I’m not ready to take that step yet. Either way, given the prices are now the same between relinquishing/renouncing, if I did decide to part with my citizenship I would renounce.

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  10. Rebecca says:

    I’m a naturalized Canadian, married to a Canadian, for nearly 30 years and with four (well, officially three) dual-nationality children, all born abroad. After the first 10 years here, I began to consider myself Canadian since this is where my life is. My eldest, now 18, has an appointment in several months to renounce US citizenship; I am following shortly, and the other kids will be doing this as soon as they are of age. It was a difficult decision for all of us — though increasingly less difficult as we considered our situations and prospects for freedom — but for the kids the best chance to begin their lives without uncertainty and difficulty. In the end they decided that on the off chance that they ever want to live in the US, they can do it the same way others from this country do. And while $2,350 US is a good deal of money (growing every day with exchange rate woes), it is cheap compared to having to live a lifetime in “compliance”.

    Perhaps the most eye-opening realization has been that what I had been raised to think of as a “relationship”, between the US and me, was not mutual but very one-sided. The heritage and holidays (taxation without representation has a rather different ring nowadays) I’d been so proud of were shown to be quite hollow. I’m not sure at all what to make of the fact that the Democratic candidates for President, who otherwise make the most sense to me, are the ones who by all accounts would do the least to change the current situation regarding FATCA and RBT. And really, considering the situation as a relationship has been helpful: if the US were a spouse or boy/girlfriend rather than a country, I’d have no problem encouraging my child to leave such a one-sided partnership with someone so narcissistic, hypocritical, deceitful, threatening, thieving, and abusive. There are still great feelings to contend with, but they are regret and betrayal tempered by relief rather than heartache over a mutual true love put asunder. My greatest regret is that the US is stupidly and short-sightedly alienating a new generation of Americans across the globe. Though I have the feeling that my regret will pale in comparison to US regret when the realization finally dawns.

    By the way, John R (above) is well-worth listening to. And is your father living abroad in the UK and what has he decided to do? I wish you and your family all the best as you navigate your way through this.

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    1. Hi Rebecca, thanks for your comment. I have sometimes considered it to be a bit like a bad long-distance relationship, too. Likewise I wish you and your family well in this — it must be some relief at least to have made your decision!

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  11. […] remain U.S. citizens (for at least a longer period of time). (This post is partly motivated by the interesting discussion by a young woman in the UK who was born a dual U.S./U.K. citizen who is dealing with her discovery that she must file U.S. […]

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  12. Juzzy says:

    I know you have an emotional attachment to the country (as do I) but I think you need to look at the situation as objectively as possible. The big thing to consider in my opinion is your chances of ever moving to the US.The older you get and the more established you get, the less likely you will move. Seeing as you have gone to university in the UK and now have a job there, you are probably unlikely to move anytime soon, if ever. Weigh this against the costs of compliance with the IRS. It’s a pretty lopsided situation. It’s this thinking that is slowly pushing me towards renouncation even though it’s taken me years (the emotions are that strong). Also even if you did renounce there isn’t nessesarily anything stopping you moving to the US under a visa or a green card (Unless your a civil servant like me and you need to be a citizen to get a job).They say citizenship is irrevocably, but I’m not sure that there is anything preventing you from going through the naturalization process once you meet the residency requirements and becoming a citizen again. But I’d check with an immigration lawyer about that. At the end of the day you need to think about what’s in your best interest and not let emotions get in the way. I myself am slowly overcoming my emotions, and giving myself until 2018 (when my passport expires) to make my final decision.

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    1. I’m not going to inflict those given the responsibility of looking after my personal affairs with this burden. As I’m quickly approaching old age, I’m giving it five more years and then I’m out of here should there be no improvement of our situation.

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  13. Anonymous says:

    Cook v. Tait was falsely decided upon in May 1924 by Justice Joseph McKenna, who resigned from the Supreme Court in January 1925 at the suggestion of Chief Justice William Howard Taft because McKenna’s ability to perform his duties had been diminished significantly by a stroke suffered ten years earlier (in 1915). By the end of his tenure McKenna could not be counted on to write coherent opinions. Therefore, the decision made by Joseph McKenna must be considered invalid on every point because his brain wasn’t functioning properly anymore (his decision is proof of this).

    Every non-resident “US Person” alive today has a non-negotiable, moral obligation to ignore McKenna’s decision full stop, resist compliance and say NO to all the other ignorant, selfish demands being made by that goverment. In a similar vein, no persons may consider themselves “American” if they comply with such a stupid, unconstitutional and fundamental violation of human rights. If you feel obliged to comply under duress you might as well go ahead and renounce as well, because compying under duress completely negates the fundamental mindset you should possess as an “American”.

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  14. […] U.S. citizens (for at least a longer period of time). This post has been partly motivated by the interesting discussion by a young woman in the UK who was born a dual U.S./U.K. citizen who is dealing with her discovery that she must file U.S. […]

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  15. […] U.S. citizens (for at least a longer period of time). This post has been partly motivated by the interesting discussion by a young woman in the UK who was born a dual U.S./U.K. citizen who is dealing with her discovery that she must file U.S. […]

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  16. Adrian says:

    Hi there

    I came across your well written post and it eloquently sums up the nightmare that I’ve been going through as well.

    I was born in the US to UK parents, and never thought much of having a US passport until I got a FATCA letter from my bank. Then the horror of the past couple of years started as I realised what those first 4 months of my life in the US meant.

    I found a reasonably priced, helpful accountant (pls email me if you want his name) and went through the streamlined program. I’ve now filed for 5 years and have just renounced – it took around 2 months for my Certificate of Loss of Nationality to arrive after my embassy appointment in London. Now I just have to wait until the start of next year to file my 8854/final tax returns and I hope the nightmare is over (subject to the IRS seeking to challenge the ‘non-wilfulness’ declaration in my streamlined application).

    I do not have the emotional ties to the US that you have (my parents were just there for work for a short period), but my strong advice would be to pay the accountant fees, get your filings in order, and renounce as soon as you can. As other commenters have said, you are young and your financial position relatively simple – get things sorted now and live your life without this hanging over your head. I would not go for the lying option – as they extend their reach/tentacles more and more (who would have thought 10 years ago that governments would be voluntarily signing up to FATCA to breach their data protection laws and hand over account details to a foreign government) you are likely to get stuck at some point and, perhaps more importantly, you don’t want to live your life with the “what if they catch me” at the back of your mind.

    I’d be v happy to answer any questions – the initial emotions of “you have to be ****ing kidding me” and “the b*stards” have generally been replaced with acceptance of just being unlucky and trying to get it sorted.

    Also, have a look at “Hodgson Law” online for advice – it’s a great site and the guy seems know everything there is to know about this stuff.

    Adrian

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