[michaellalonde]

I was born in Canada to US citizen parents: thus I was born a Canadian-US dual citizen. I have complied with all US and Canadian tax laws, including filling my FBARs and, for my 2011 taxes, the new Form 8893. (My total bank accounts and investment accounts come to $700K.) On May 15, I renounced my US citizenship. I understand that, for 2012, I must file as a dual-status alien: Form 1040NR, with Form 1040 up to May 14 filed as a schedule. Here are my questions: (1) Must I file Form 8893 for 2012? If yes, must I include specified assets acquired after renunciation? (2) Must I file an FBAR for 2012? If yes, must my FBAR include any accounts opened after renunciation? (3) If I open a grantor trust (such as a Canadian Tax-Free Savings Account) after renunciation, must I file Form 3520? Thanks.

[AtlantaTaxExpert]

The answer to all three questions is YES.

While Form 8938 and FBAR are not technicaly required, they are mere information returns, done to show the IRS that you are NOT trying to hide assets overseas. For this reason, submitting them ONE LAST TIME should not be a significant problem.

Same logic applies for the Form 3520. After 2012, no further submissions will be required.

[michaellalonde]

Thanks for the helpful answer. I do see the point about these being information returns only. I guess that one of the reasons I renounced my US citizenship was precisely to keep the IRS -- which I now consider a foreign taxation authority -- out of my financial business: it kind of bugs me that I might even have to inform them of financial accounts opened since renouncing. Probably, I will just wait until 2013 before opening any new accounts, e.g. a Canadian Tax-Free Savings Account. Is there any literature or IRS guidance that makes it clear that these forms (FBAR, 8893, 3520, 3520A, 8621, 8891) are not technically required?

Just in case you're interested, my US tax liability has been zero for every year of my life, except a few years when I lived and worked in the US. The reason for this is that Canadian taxes are usually much higher than US taxes, so that on the US side I get a foreign tax credit that wipes out any US liability that I might otherwise have. I am certainly not renouncing in order to evade taxes. But it has become extremely complicated to be a US citizen, at least if you make your life in Canada: it costs me about $1000 per year in accountancy fees just to get my US taxes done. And now with the new filing requirements, it's only going to get more expensive. Another reason to renounce is that my financial planning is seriously constrained by having to plan with an eye on two taxation authorities. If I had remained a US citizen, then it would be an accountancy headache and perhaps a US tax liability to make investments that ordinary tax-paying middle class Canadians make all the time: Canadian mutual funds, Canadian Tax-Free Savings Accounts, Canadian Registered Education Savings Plans, etc. Finally, I've now married a Canadian, and my Canadian wife really does not want a foreign taxation authority inquiring into her financial affairs, if we decide to open any joint accounts. It strikes me that the longstanding US policy of taxing nonresident citizens can be very harmful to the US: US citizens abroad could form a wonderful informal diplomatic corps: I used to boost and defend my second country (second after Canada) all the time. Now, I simply feel resentment towards it. OK... sorry about that. That was a bit of a rant!