dual citizen filing requirements

[natiro]

Client's daughter is a citizen of both US and Germany. She moved to Germany in late 2005 and has been living and working there for all of 2006 and plans to stay for another couple of years.

Is she required to file in US, since she's a US citizen? Or does dual citizenship change that requirement? I'm thinking she still needs to file in US but can't find anything that addresses dual citizenship.

Many thanks. . . .

[TaxBird]

Client's daughter is a citizen of both US and Germany. She moved to Germany in late 2005 and has been living and working there for all of 2006 and plans to stay for another couple of years.

Is she required to file in US, since she's a US citizen? Or does dual citizenship change that requirement? I'm thinking she still needs to file in US but can't find anything that addresses dual citizenship.

Many thanks. . . .

If I'm not mistaken, US does not allow dual citizenship. For example, if you come here from somewhere else you have to renounce that citizenship. The EU, on the other hand, does not require renounciation which is how dual citizenship is obtained (US citizen first then obtain 2nd).

Having said that, off the top of my head, I think the way to go is to file returns in both countries and then cross claim credits somehow (take credit for US taxes paid on Germany and vice-versa.

The best place to start would be with the German Tax Treaty (I don't have a link handy but I'm sure you could google it).

So, in short, although I don't know the details of how to do it, I do know that if she wants to continue to claim US citizenship then she needs to file a US return.

[Bird Legs]

Gabriel

Maybe Gabriel could answer this one.

[TaxBird]

Maybe Gabriel could answer this one.

Are you suggesting we pray?

[Bird Legs]

Prayer

If it works, why not?
Do you remember the old song from the 2nd world war? "Coming in on a wing and a
prayer."

[TaxBird]

If it works, why not?
Do you remember the old song from the 2nd world war? "Coming in on a wing and a
prayer."

This one?

Coming In On a Wing and a Prayer
Circa 1943
Lyric by Harold Adamson, Music by Jimmy McHugh

Comin In On A WING and a PRAYER
One of our planes was miss-ing, two ho-ours o-ver due.
One of our planes was miss-ing, with all its gal-lant crew.
The ra-di-o sets were hum-ming, they wait-ed for a word;
Then a voice broke thru the hum-ming and this is what they heard:

Chorus
"Com-in' In On A Wing And A Pray'r_______
Com-in' In On A Wing And A Pray'r_______
Tho' there's one mo-tor gone, we can still car-ry on,
Com-in' In On A Wing And A Pray'r_______

What a show_____ what a fight______
Yes, we real-ly hit our tar-get for to - night!
How we sing as we limp thru the air______
Look be - low, there's our field o-ver there____

With our full crew a- board and our trust in the Lord
we're Com-in' In On A Wing And A Pray'r_______

[Gary]

Dual Citizenship

The US does allow dual citizenship with some countries. I know that Israel is one of them.

Gary

[TaxBird]

The US does allow dual citizenship with some countries. I know that Israel is one of them.

Gary

That is interesting on so many levels!

I'd better stop there, though. I have quite a pile of work to get out before I can leave tonight. If I start on this I'll never get my other stuff done.

Thanks Gary!

[sandysea]

Resident for tax purposes?

You client may be a resident of Germany, but if she is a citizen of the US, then she files a US tax return and is taxed on worldwide income. Germany may also tax her on worldwide income if she is a citizen there. You can take tax treaty benefits to offset the double taxation, but unless you denounce your US citizenship, then she will be considered a citizen and taxed on the income as any other citizen is

[Bird Legs]

Tax Bird-that is great

That is the one I'm talking about.
I was 12 yrs. old when that came out.

[Koss]

Client's daughter is a citizen of both US and Germany. She moved to Germany in late 2005 and has been living and working there for all of 2006 and plans to stay for another couple of years.

Is she required to file in US, since she's a US citizen? Or does dual citizenship change that requirement? I'm thinking she still needs to file in US but can't find anything that addresses dual citizenship.

Many thanks. . . .

As noted in other posts, all US citizens are taxed on their worldwide income. If the person has any income at all, in either country, she must file a US tax return.

There are three ways to reduce and/or eliminate US income tax on income that she earned in Germany. Ranked by complexity, from least complicated to most complicated, they are:

(i) Foreign Tax Credit (Form 1116)

(ii) Foreign Earned Income Exclusion and Foreign Housing Exclusion (Form 2555)

(iii) Tax Treaty Benefits

Generally, you have to pick one of these; you can't have your cake and eat it too.

As for dual citizenship: The US, in many cases, can initiate proceedings to revoke the citizenship of a person who has proactively applied for citizenship in another country. But I don't think the Justice Department does this on a whim. First of all, they would have to find out about it somehow. And then they would look at facts and circumstances.

If, on the other hand, another country simply grants you citizenship, I don't think that's grounds for any action by the US, because you didn't take any action to seek citizenship in that country.

Some countries, however, won't even consider an application for citizenship unless the applicant has formally renounced citizenship in the other country. And that requires an extremely conscious, deliberate act in front of a US ambassador or consulate.

Finally, if you are originally from a country other than the US, and you get through all the hoops to become a resident alien in the US, and you are finally declared eligible for naturalization, I don't think the US requires you to renounce your citizenship in the other country. (Unless that country happens to be, say, North Korea, or Cuba, or something like that... there may be some special rules.)

So.... Yes, dual citizenship is possible.

Burton M. Koss

[veritas]

More are renouncing citizenship

http://www.nytimes.com/2006/12/18/world/18expat.html?ei=5090&en=5655d020c1763b3f&ex=1324098000&partner=rssuserland&emc=rss&pagewanted=print

[Davc]

Citizenship by naturalization (INA § 337, 8 USC § 1448)

A description of the US naturalization oath is given in Section 337(a) of the INA [8 USC § 1448(a)]. Of particular relevance to the dual citizenship issue is that, as part of the oath, a new citizen must pledge "to renounce and abjure absolutely and entirely all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which the applicant was before a subject or citizen."

In practice, it is unclear what if any true legal significance this statement has any more. The US does not require a new citizen to take any formal steps to renounce his old citizenship before officials of the "old country"; and when the other country continues to claim a naturalized US citizen as one of its own, current US policy recognizes that such a person may have to use a passport from the other country in order to visit there, and such an action does not put the person's US citizenship in jeopardy.

At one time, the US took the position that anyone who wished to renounce his prior citizenship in connection with US naturalization had an inherent, unquestionable right to do so. Well into the 19th century, many countries had no provisions at all for renouncing citizenship and did not even acknowledge that their citizens or subjects had any such right. This is, no doubt, why the renunciatory clause in the US naturalization oath is not linked to any additional requirement to give up one's old citizenship in accordance with another country's laws; as far as the US was concerned, the renunciatory statement in its own naturalization oath was sufficient, and all other countries had an obligation to respect it. In recent years, the State Department has apparently decided to take a more pragmatic and realistic stance on this issue.

[Gretel]

As far as Germany is concerned...

under normal circumstances you have to denounce your German citizenship in order to become a US citizen. If you qualify for an exeption (I don't want to get into what that is) you have to file with Germany first to keep your German citizenship and then, after this is granted, file for your US citizenship.