last year after we found out about the filing requirements of dual citizens living in Canada my wife filed 6 years of U.S. taxes and FBARS ...she has yet to hear back from the IRS ...this i understand is a good thing.. my wife last year renounced her U.S. citizenship. Now it's time to file her last year of U.S. taxes and Fbar...She has not yet received her loss of nationality certificate... the consulate says it can take many months to receive it... we are unsure when to file the 8854 initial and annual expatriation statement. Nelsona or anybody with experience with this could you please comment ?
thank you Oldgringo
when to file the 8854 if you have not received a LOC?
Moderator: Mark T Serbinski CA CPA
Yeah, the whole limbo status that they leave you in is really awkward. You're not officially renounced until the Loss of Nationality Certificate is issued, but then once it is issued, your date of renunciation goes all the way back to when you took the Oath of Renunciation (which can be almost a year prior).
I have a family member going through the process now. They took the Oath back in Sept, and are still waiting for the LoN Certificate to be issued. The consulate says they are still receiving Certificates right now from Oaths that were taken in July last year, so it will probably still be another 2 or 3 months before the Certificate comes through. Just a couple years ago, the waiting time for the Certificate was typically 2-4 months, but it's up near a year now, which suggests that there's been a pretty big surge in renunciations recently.
In any case, the 8854 is due with your 2011 taxes. So it's due by June 15 of this year, unless you file for an extension for your 2011 return. Your tax reporting obligation doesn't stop until the 8854 is filed - so if you don't file the 8854 on time, then you may be on the hook to have file taxes again for 2012.
It's kind of messed up, because you are filing the 8854 even though you are not officially expatriated until you get the LoN Certificate. But as soon as you get that Certificate your date of renunciation goes back to 2011, so at this point you just have to file the 8854 and assume that the Certificate is coming.
Having the Certificate declined is very rare, and even if it is declined, you can appeal and you'll win the appeal anyway. The only reason they can really decline the Certificate is if they feel that you were pressured or coerced into renouncing against your will - and that would be easy enough to prove otherwise in the appeal.
If for some reason they just won't approve the LoN Certificate after the appeal, then I suppose you would just file an amended tax return for 2011 stating that you need to withdraw your previous 8854 filing. But honestly, I can't imagine that possibly being an issue.
So basically, file your 8854 before June 15. Include one copy of it with your 2011 tax return, and then send an additional copy of 8854 to the address listed in the instructions. And then she will be all done with the IRS (unless she is deferring any exit tax owed on 8854, in which case she'll have to keep filing every year until the tax is paid in full).
I have a family member going through the process now. They took the Oath back in Sept, and are still waiting for the LoN Certificate to be issued. The consulate says they are still receiving Certificates right now from Oaths that were taken in July last year, so it will probably still be another 2 or 3 months before the Certificate comes through. Just a couple years ago, the waiting time for the Certificate was typically 2-4 months, but it's up near a year now, which suggests that there's been a pretty big surge in renunciations recently.
In any case, the 8854 is due with your 2011 taxes. So it's due by June 15 of this year, unless you file for an extension for your 2011 return. Your tax reporting obligation doesn't stop until the 8854 is filed - so if you don't file the 8854 on time, then you may be on the hook to have file taxes again for 2012.
It's kind of messed up, because you are filing the 8854 even though you are not officially expatriated until you get the LoN Certificate. But as soon as you get that Certificate your date of renunciation goes back to 2011, so at this point you just have to file the 8854 and assume that the Certificate is coming.
Having the Certificate declined is very rare, and even if it is declined, you can appeal and you'll win the appeal anyway. The only reason they can really decline the Certificate is if they feel that you were pressured or coerced into renouncing against your will - and that would be easy enough to prove otherwise in the appeal.
If for some reason they just won't approve the LoN Certificate after the appeal, then I suppose you would just file an amended tax return for 2011 stating that you need to withdraw your previous 8854 filing. But honestly, I can't imagine that possibly being an issue.
So basically, file your 8854 before June 15. Include one copy of it with your 2011 tax return, and then send an additional copy of 8854 to the address listed in the instructions. And then she will be all done with the IRS (unless she is deferring any exit tax owed on 8854, in which case she'll have to keep filing every year until the tax is paid in full).
Thank you very much for the reply.
After much searching on the Internet and wading through the instructions for 8854 and other publications we ended up handling it exactly as you advise.....her 1040 with 8854,her 8854 to the state dept.and her FBARS are all in the mail ...hopefully for the last time!
Oldgringo
After much searching on the Internet and wading through the instructions for 8854 and other publications we ended up handling it exactly as you advise.....her 1040 with 8854,her 8854 to the state dept.and her FBARS are all in the mail ...hopefully for the last time!
Oldgringo