Relinquishment of US citizenship - permanent?

[golfnut]

Is an individual born in the US, who emigrated to Canada in1975 and became a Canadian citizen in 1977, considered a US citizen subject to US taxes? At the time they became a Canadian citizen they understood that act constituted relinquishing their US citizenship, and that was their intent. They have had no US income or property ownership at anytime since, and have not resided in the US since. Their income in the years since has never exceeded $75,000 per year.

[tsanaha]

i guess you need do it as "noise relinquishing" not as "quiet relinquishing".

(analogy noise disclosure/quiet disclosure)

[nelsona]

In short, yes.

Even relinquishing your citizenship is insufficient to break IRS reporting requirements.

IRS must specifically be notified of that fact.

[golfnut]

At the time of becoming a Canadian citizen (1977) the individual understood and intended to no longer be a US Citizen. There was no dual citizenship recognized at that point. All financial and business contacts had been severed prior to 1977. Can the US govt now come back and say, "Oh, no. You are still a citizen."?

[tsanaha]

I heard a story somewhere on web, a British (US born) went to Mexico via Florida (USA), he used his British passport to enter US, but was rejected into US by US Immigration because they saw his birth place is USA -- assuming he is a US citizen and has to use US passport into US.

This tell me that if you are born in US, you are considered US citizen unless you have some document to prove that you have given up US citizen -- a foreign passport/citizenship may not be enough.

[nelsona]

And even official renunciation does not absolve one of IRS requirements, until IRS has been formally notified by you and your rpeorting has been brought into compliance.

So, you are not out of the IRS woods yet; and you are still a US citizen.

[looking4advice]

Contact the US consulate in your area and they have a questionaire you can complete which determines if you are a USC or not. If you don't want to contact them you can google 1405-0178 which is the form number and look at it yourself.

[golfnut]

Does anyone know of any cases or rulings involving an individual who became a Canadian citizen over 30 years ago, cut off all ties in US, and thought she was no longer a US citizen, having a subsequent US tax liability?

[nelsona]

There is a differnce between a tax liabilty and a reporting liability.

Very few US citizens in canada have a US tax liabilty.

All former US citizens have a reporting liability after renunciation, for a period of time prescribed by IRS regulation (which has changed depending on when renunciation took place), or by the tax treaty between US and their resident country (10 years for Cdn residents).

Your question should then be is there any case law where IRS has waived this requirement, not just case law where they have insisted upon it.

State Dept will determine IF and when you ceased becoming US citizen. If it is more than 10 years ago, then I would think you are pretty safe. If they fail to conclude that you are not a citizen, you will fall under the current expatriation polict if you renounce (which, apparently, is not that burdensome once you back-file)