YOUR GUIDE TO RENOUNCE TO U.S. CITIZENSHIP
You should first know that: Renunciation of U.S. citizenship is a lengthy process that involves extensive paperwork, interviews, and fees, having a trustful and friendly legal hand will ease the process to turn this complicated and hard decision into a smooth transition.
If you want to give up your U.S. citizenship, don’t hesitate to contact me for a consultation or to help with your final tax returns and sort out your U.S. taxes to ensure a successful renunciation.
I want to renounce my U.S. citizenship. How do I start the process?
According to the law, if you want to renounce your citizenship, you will need to do it in person by visiting a U.S. embassy or consulate abroad. You need to seek a professional expat lawyer’s help to start the process and book your appointment. You will need to prepare a few forms and fill out form DS-4079 before your appointment, which is a questionnaire for determining the possible loss of U.S. citizenship.
How much is the fee to renounce U.S. citizenship?
The fee to renounce U.S. citizenship is $2,350. Please be aware that this fee is what the Government of the United States charges for the renunciation, fees for legal services and representation vary and are additional.
What law governs my right to Renounce my U.S. Citizenship while I’m Abroad?
The Immigration Nationality Act.
Section 349(a)(5) of the Immigration and Nationality Act (INA) (8 U.S.C. 1481(a)(5)) is the section of law governing the right of a United States citizen to renounce his or her U.S. citizenship abroad. That section of law provides for the loss of nationality voluntarily and with the intention of relinquishing nationality:
(5) making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state, in such form as may be prescribed by the Secretary of State" (emphasis added).
What steps do I have to take to renounce my U.S. citizenship?
A person wishing to renounce his or her U.S. citizenship must voluntarily and with intent to relinquish U.S. citizenship:
- Appear in person before a U.S. consular or diplomatic officer,
- In a foreign country in the U.S. Embassy or Consulate; and
- Sign an oath of renunciation
Attention: Renunciations abroad that do not meet the conditions described above have no legal effect.
What Documents do I need to bring for my renunciation?
For this process you will need to bring the following documents:
- Evidence of U.S. citizenship (such as your most recent U.S. passport or U.S. birth certificate, if you are not in possession of a U.S. passport
- U.S. Consular Report of Birth Abroad, if applicable
- Bio-pages of all current foreign passports
- Certificates of Naturalization for any country, including the United States, if applicable
- Certificates of Citizenship for any country, including the United States, if applicable
- Evidence of any name changes, if applicable (for example, your marriage or divorce certificates, court orders or deed polls)
- Completed form DS-4079
- Completed Loss of Citizenship Questionnaire
- Completed Informal Loss of Citizenship Acknowledgement, which must be signed/dated and sent as a scanned document.
Can I renounce my U.S. citizenship online or remotely?
Because of the provisions of Section 349(a)(5), U.S. citizens can only renounce their citizenship in person, and therefore cannot do so by mail, electronically, or through agents. In fact, U.S. courts have held certain attempts to renounce U.S. citizenship to be ineffective on a variety of grounds.
What do I renounce when I renounce my U.S. citizenship?
You renounce all your rights as a US citizen, including your right to reside in the United States.
In the case of Colon v. U.S. Department of State, 2 F.Supp.2d 43 (1998), the U.S. District Court for the District of Columbia rejected Colon’s petition for a writ of mandamus directing the Secretary of State to approve a Certificate of Loss of Nationality in the case because, despite his oath of renunciation, he wanted to retain the right to live in the United States while claiming he was not a U.S. citizen.
What about my tax liability? If I Renounce to my U.S. citizenship, will I be free from my U.S. tax Obligations?
No, renouncing U.S. citizenship doesn't automatically cancel your tax obligation. U.S. citizens and green card holders are obligated to report their worldwide income, even if they live outside the U.S. The act of expatriation does not terminate your obligation to file a U.S. tax return and report all your worldwide income.
To cancel your tax obligations, you must notify the IRS of the change in your status by filing Form 8854, and then file a copy with the Department of Treasury as well. You will be treated as a U.S. citizen for tax purposes until you file this form. The same rules apply to green card holders. You must file the form as soon as possible after you renounce your citizenship.
Persons who wish to renounce U.S. citizenship should be aware of the fact that renunciation of U.S. citizenship may have no effect on their U.S. tax or military service existing obligations. Prior obligations remain, so you would only be a non-resident on an ongoing basis.
Also, be aware that even after the renunciation, the IRS could still audit and assess taxes and penalties. If the Department of Homeland Security determines that the renunciation is motivated by tax avoidance purposes, the individual will be found inadmissible to the United States under Section 212(a)(10)(E) of the Immigration and Nationality Act (8 U.S.C. 1182(a)(10)(E)), as amended. Renunciation of U.S. citizenship may not prevent a foreign country from deporting that individual to the United States in some non-citizen status.
If I renounce my U.S. citizenship, what do I have to do to cancel my tax liability?
To renounce to your tax liability once you renounce your a U.S. citizenship you must:
- Be tax compliant for the past five years and
- File form 8854
If you fail to file form 8854, you will remain a US taxpayer. Failure to file the Form 8854 doesn’t only subject the person who is expatriating to a $10,000 penalty. It also subjects the person who is expatriating to the same exit tax as a covered expatriate. But more importantly, it subjects you to tax obligations as a U.S. citizen or resident. It remains like this until you do both: file your initial Form 8854 and notify the appropriate authorities of your expatriating act.
What is form 8854?
Form 8854 is used to acknowledge the change of your tax status and determine your status of expatriate or covered expatriate. This form asks for general information regarding your new country of tax residence, date of expatriation, your U.S. tax liability in the last five years and your net worth on the date of your expatriation.
Do I have to pay the Exit Tax?
The exit tax is imposed on people who meet any of the following criteria:
- If your average net annual income tax liability is over $171,000 for 2020
- If the aggregate net value of your worldwide assets is over $2 million
- If you failed to certify five years of U.S. tax compliance.
What does this mean?
If the Exit Tax applies to you, then you will be treated as if you have sold all of your assets on the day before you renounce your citizenship and will be taxed on your capital gains. It also impacts on the gifts that you present later to U.S. persons, as they will need to pay a tax on them.
It’s extremely important to fully catch up with all your taxes before you renounce your citizenship. For this, you may want to use the Streamlined Filing Compliance Procedures. In general, these procedures allow you to become tax compliant and avoid penalties for not filing your taxes earlier. You will need to file your tax returns for the previous five years. Your last final tax return will be filed for the year of the renunciation and it is called a “dual return”.
I am here for you
US Citizenship renunciation can be difficult process to understand and complete on your own. Most people find difficulty knowing where they can renounce to their US citizenship, how this will impact their personal and business taxes, and how to successfully and correctly adjust their tax requirements once they're no longer US citizens, especially in cases where there is exit tax involved. This is one of the many matters I can clarify for you. I'm always happy to provide detailed, personalized guidance through a 1:1 consultation. You can reserve the best day and time to meet by contacting me to schedule your consultation.