Why have U.S. Citizenship Renunciation Numbers Plateaued?

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The number of U.S. citizens who have renounced has plateaued starting in 2016.  That was the peak year with 5,409 renunciations followed by a similar number of 5,132 inUSC Renouncing through 2017 Graph 2017.    See an older 2014 post that highlighted the then record of 2,999 for the entire year.

The 2014 Third Quarter Renunciations Is probably the New Norm –


The data used for these running compilations, with the individuals names published can be reviewed on the federal government’s website.  The complete set of lists going back to the mid-1990s can be reviewed here.  Quarterly Publications.   Quarterly Publication of Individuals, Who Have Chosen to Expatriate

The total number of renunciations for the first two quarters of 2018 was 2,185.

None of this answers why these numbers have stopped increasing in a ski slope fashion?


A “Resident” is a “Resident” is a “Resident” – or Not?

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Who is a “resident”?  What is a “resident”?  This sounds like such a basic question. It is not so simple for tax purposes; nor for other provisions of the law.application for US passport p1

There is the colloquial meaning of resident.  For instance, if Mr. Smith says, “I have been a resident of Montana on my ranch for 30 years”; to what does he refer?  What if Mr. Smith has a house in California (which he has owned for 15 years) and another ranch in Alberta, Canada that he has owned for 45 years.  Is he also a “resident” of Canada and California?

What if he is not a U.S. citizen but holds a particular type of visa, such as lawful permanent residency (an immigrant visa)?  What if he has a non-immigrant visa, such as an E-2 visa?  What if he only spends 4 months a year on his ranch in Montana, of where is he a “resident”?

Is he a “resident” in some or all of these scenarios?   Why is this important in the context of “U.S. expatriation taxation”?FBAR 114 electronic

There are three sources of federal law where it becomes very important, which will be discussed in later posts:

In addition, various states, such as California, Texas and Washington D.C. (actually not a state; but all places I happen to be licensed to practice law) have their own definitions of who are “residents” for income tax and other purposes.  US map

Subsequent posts will discuss the importance of understanding who is a “resident” and the implications under these various laws.

Laymen regularly have an idea of where they are “resident” – but that idea is often very different from definitions of “resident” under federal Titles 31, 26 and 8 and state laws (e.g., Texas, D.C., Florida, California, New York, etc.).


Mr. Dewees gets Smacked! U.S. District Court Upholds Multiple $10,000 Penalties (US$120,000 – NO Forms 5471) for USC Residing in Canada

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United States Citizens (“USCs”) and lawful permanent residents (“LPRs”) residing overseas should read the story of Mr. Dewees to learn what could happen if they go into the offshore voluntary disclosure program (“OVDP”); when he appears to have been a “good faith” taxpayer.  The IRS issued a press release in March 2018 – IRS to end offshore voluntary disclosure program; Taxpayers with undisclosed foreign assets urged to come forward now  The IRS explained that it will close the program next montNorth America Maph on September 28, 2018.  Take the story of the Dewees into consideration before rushing into the OVDP.

This is not a new case, as the U.S. District Court for the District of Columbia issued its opinion a year ago – Dewees v. United States, 2017 U.S. Dist. LEXIS 124989 (D.C. D.C. 2017).  However, it is an important case if anyone is confused about whether they should go into the OVDP.  See the story of the Dewees.

Mr. Dewees resided in Canada and did file U.S. income tax returns, but not all information returns. See a related previous post –  Why Most U.S. Citizens Residing Overseas Haven’t a Clue about the Labyrinth of U.S. Taxation and Bank and Financial Reporting of Worldwide Income and Assets

He also did not initially pay information reporting penalties assessed by the IRS regarding his Canadian company.   He resided in Canada where is business and company was located.  The Court noted that he “. . . voluntarily disclosed [to the IRS] his failure to file the required informational returns . . . ”  The Dewees were “rewarded” by their good faith efforts by the IRS which then turned around and ” . . .  assessed a statutory penalty of $120,000, $10,000 for each year of non-compliance . . . “

The Canadian revenue authority would not refund his Canadian tax refund until the IRS penalty was paid in full.  He eventually paid $120,000 of information penalties and brought a suit for refund in U.S. District Court.

The U.S. District Court first explained the obligations of USCs residing overseas with –

(i) controlling interests in foreign corporations (i.e., filing obligations under IRC IRS Form 5471 - page 1Section 6038 to file IRS Form 5471) – see an earlier related post Many Canadians have expressed frustration with U.S. tax policy of worldwide taxation of U.S. citizens., and

(ii) interests in foreign financial accounts (i.e., filing obligations of foreign bank account reports under Title 31) see a previous post, Nuances of FBAR – Foreign Bank Account Report Filings – for USCs and LPRs living outside the U.S.

The Court then dismissed the suit for refund on the grounds that Mr. Dewees failed to state a viable claim and the Court therefore lacked jurisdiction to hear his claims (which were “excessive fines”, “equal protection” and “due process” claims).

Here, the USC residing in Canada was apparently well intended, since the District Court said that Mr. “Dewees learned that he had failed to comply with these requirements . . . ” In another part of the opinion, the Court uses the word “neglected” to file information returns for over a decade.

Learned” and “neglected” certainly does not sound intentional, which is probably why the IRS did not attempt to pursue Title 31 willfulness FBAR penalties.

The USC entered the OVDP on the advice of a tax specialist and then withdrew after the IRS was proposing to assess an “OVDP in-lieu of penalty” of US$185,862.  Chart - OVDI Article Martin Ferreira

The IRS ultimately did not pursue any FBAR penalties in this case, not even the annual $10,000 per year penalty for failure to file the FBAR form.

Had Mr. Dewees lived in any other country (other than Canada) he probably would not have had the local taxman (i.e., the Canada Revenue Agency) step in to indirectly help the IRS collect the penalty amounts assessed.  See an earlier post,  U.S. Enforcement/Collection of Taxes Overseas against USCs and LPRs – Legal Limitations

The U.S.-Canada income tax treaty has a special “assistance in collection” provision, which provides in part as follows –

Article XXVI A
Assistance in Collection
1. The Contracting States  [referring to the U.S. and Canada] undertake to lend assistance to each other in the collection of taxes
referred to in paragraph 9, together with interest, costs, additions to such taxes and civil penalties, referred to in this Article as a “revenue claim”. 

I explained in an earlier post, how the “Revenue Rule” was a common law concept that generally prohibited the U.S. government from assisting in the collection of taxes of Passport Inside Back Page - USC Taxation Referenceanother country.  Hence, the U.S. Treasury renegotiated the treaties with five countries (including Canada) that now have a specific treaty provision such as XXVI A above:

As a result of these cases and the Revenue Rule, the U.S. and Canada modified their income tax treaty to (at least in theory) allow for the international enforcement of taxes.  The U.S. now has five income treaties with “mutual assistance” provisions: Canada, Sweden, France, Denmark, and the Netherlands (with a clause in the newly negotiated, but yet to go into force, Swiss treaty).

In the Dewees case, we learned that the assistance in collection provision is not merely a theoretical tool that can be used in collecting taxes.  The actions of both the Canadian (CRA) and U.S. governments (IRS and District Court Judge), made the provision effective.   The US$120,000 penalty, that has nothing to do with any U.S. taxes, was collected by the IRS.

Questions to ponder in this case:

  1. Would the USC have been better off, by getting proper advice as to how to file on a going forward basis?
  2. Why did the USC ever go into the OVDP program in the first place under these facts?
  3. Did the USC know about the “streamlined” filing procedures of the IRS for U.S. Taxpayers Residing Outside the United States?
    • In this case, the program did not exist at the time the taxpayers went into the OVDP in 2009.
  4. Why did Dewees not simply consider (assuming he had good faith facts) filing amended tax returns to include late filed IRS Form 5471 forms?
  5. Why did the IRS aggressively pursue these $120,000 in information penalties (presumably because he opted out of the OVDP program and they like to make examples out of those taxpayers that leave the program)?
  6. Would and will the IRS assess more $10,000 per year penalties for additional companies for a good faith failure to file IRS Form 5471 forms?  In other words, what if the Dewees had four Canadian companies, would the IRS have assessed US$480,000 (US$10,000 per year X 4 – per company – X 12 – the number of years the form was not filed)?
  7. Will the IRS have success with any other country that does not have a similar tax treaty provision on the collection of taxes as the unique U.S.-Canada provision?
    • What about Sweden, France, Denmark, and the Netherlands with specific provisions in the U.S. income tax treaties?  See a discussion of the U.S. District Court case in Georgia involving a Danish citizen, Torben Dileng v. Commissioner as discussed by Keith Fogg in the Procedurally Taxing Blog
  8. Will the aggressive actions of the IRS in this Dewee case to collect penalties backfire?  Will USCs residing overseas be less likely to go into specific IRS programs for fear of being smacked down to the tune of US$120,000 (plus legal fees and costs) for merely neglecting to file information returns when no U.S. taxes are even owing?


The Time has Come: Revocation or Denial of U.S. Passports as IRS Begins Issuing Notices to U.S. citizens

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At the end of 2015 (Dec. 9), I posted a description of what was then a new law, passed by Congress – Revocation or Denial of U.S. Passport: More on new section 7345 (Title 26/IRC) and USCs with “Seriously Delinquent Tax Debt” 

Notice of Intent to Levy IRS - SampleAt the time, it was clear that the IRS and the Department of Justice was going to take a substantial amount of time to actually implement what is a major change in the law.  In short, the IRS has the power and obligation to notify the Secretary of State to (i) deny a U.S. citizen (the “Taxpayer”) a U.S. passport, or (ii) revoke or not renew a U.S. passport of the Taxpayer.  The law is not clear as to what steps the Department of State will necessarily take in response to the notification.  Passport Inside Back Page - USC Taxation Reference

Now the administrative machine is in full force as the IRS has begun issuing special notices to restrict or ban a U.S. passport of the Taxpayer.  See, IRS Notice –  Notice 2018–01 and a dedicated portion of the IRS website that focuses on Section 7345 titled  Revocation or Denial of Passport in Case of Certain Unpaid Taxes.

The IRS has begun issuing notices required under the law for those US PassportTaxpayers who the IRS asserts have “seriously delinquent tax debt” as defined in the law – Taxpayer Notification – Notices CP 508C.

The Department of State’s website uses mandatory language regarding revoking, issuing or renewing a U.S. passport of U.S. citizens (“USCs”) once they have received certification from the Secretary of the Treasury –

If you have been certified to the Department of State by the Secretary of the Treasury as having a seriously delinquent tax debt, you cannot be issued a U.S. passport and your current U.S. passport may be revoked.

If you are overseas you may be eligible for a limited passport good for direct return to the United States.

We would suggest that if you have seriously delinquent tax debt, you contact the IRS to resolve your debt before applying for a passport. If you do not resolve your tax issues before applying for a passport, your application will be delayed or denied.


Indeed, a key representative from the IRS personally told me in Washington D.C. this May that the first batch of  Notices CP 508C  were issued as sort of a test batch of notices.  Surely, Taxpayers will be forced to litigate and challenge the validity of these.

For those of us who have dedicated our professional lives to these issues, we see that probably more often than not, IRS notices of amount of taxes owing are erroneous. The IRS will use their own determinations of amount of taxes, penalties and interest owing, as in this example of a USC residing overseas:Notice of Intent to Levy IRS - Sample

There are two different judicial remedies a Taxpayer who is a USC can choose;  file a suit in either U.S. Tax Court or a U.S. District Court to determine the validity or erroneous nature of any particular Notice CP 508C.

In addition, the IRS is now warning Taxpayers they may lose their passport in Notices of Intent to Levy.  The following is sample text from Revocation of Passport Notice IRS 7345a recent Notice from the IRS to a USC residing outside the U.S.

It has been reported that tens of thousands of IRS Notices CP 508C have been issued to Taxpayers during 2018.  It remains to be seen the actual numbers of U.S. passports that will be revoked or denied by the Department of State upon receiving notice from the Secretary of Treasury (which notice is certified by the Commissioner of the Internal Revenue Service).

Generally, it will be the IRS Chief Counsel lawyers who litigate these issues before the U.S. Tax Court and the Department of Justice, Tax Division lawyers who litigate before the U.S. District Courts.

Congress passed largest federal tax reform since the 1986 TRA – key provisions can impact “expatriates” –

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I have not devoted the time to post regular blogs these last few months.

Now that we have major tax revisions to the U.S. federal tax law (many that can impact Trendline Included - USC Annual Renunciations - 2000 through 2015various individuals who are considering renouncing their U.S. citizenship or abandoning their U.S. lawful permanent resident – LPR – immigration status), I will find some more time to identify key provisions and provide some observations.

As always, the federal tax law is complex and these posts do not represent formal legal advice to anyone who might read them.  Do get proper advice from a qualified tax professional to help you navigate your particular circumstances.

White House Tax Reform Proposal – Light on Details (Non-residents and Expatriates are No Where to be Found)

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The White House announced on September 27, 2017 it’s so-called  Unified Framework for Fixing Our Broken Tax Code

Nowhere is there any discussion about the “expatriation” provisions; e.g., IRC Section 877, et. seq.    See, for instance,  Part II: C’est la vie Ms. Lucienne D’Hotelle! Tax Timing Problems for Former U.S. Citizens is Nothing New – the IRS and the Courts Have Decided Similar Issues in the Past (Pre IRC Section 877A(g)(4))

One important proposal that would impact (i) U.S. citizens residing overseas, (ii) long-term lawful permanent residents, and (iii) those who renounce/abandon such status; is the proposed repeal of the entire estate and gift tax regime (referred to “affectionately” in the report as the “death tax”).

The Tax Policy,  Urban Institute – Brookings Institute, Research report, A Preliminary Analysis of the Unified Framework has concluded that the elimination of the estate and gift tax provisions will cause a loss of federal revenues of $238 and $443 billion over the next two decades, respectively.  The overall loss of revenue impact, according to this study of the “Unified Framework for Fixing our Broken Tax Code” will be significant. The report provides in summary:

We find they would reduce federal revenue by $2.4 trillion over ten years and $3.2 trillion over the second decade (not including any dynamic feedback)

Separately, the Tax Foundation last year in 2016 did its own prelimiary anlaysis and concluded:

  • According to the Tax Foundation’s Taxes and Growth Model, the plan would reduce federal revenue by between $4.4 trillion and $5.9 trillion on a static basis. The amount depends on the nature of a key business policy provision.

Will any of these provisions get passed into legislation?  Only time will tell, but so far the White House and Republican controlled Senate and House have not been able to pass any major legislation to date.   Pundits who follow legislation in the Congress and this  President are not optomistic that large swaths of these general tax proposals will ever become law.

Will Congress Repeal the Estate Tax? If so, will the “Inheritance Tax” for “Covered Expatriates” get Repealed too?

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The current U.S. Treasury Secretary announced in an April 26, 2017 press briefing the intention of the current Administration to repeal the estate tax.

The current estate tax has been in existence for 101 years (with prior versions in the 19th century).  Please see the following articles published some years ago for a history of the estate tax since its enactment with the Revenue Act of 1916; Patrick Fleenor, staff economist at the Tax Foundation, A History and Overview of Estate Taxes in the United States and The Estate Tax:  Ninety Years and Counting, by Darien Jacobson, Brian Raub and Barry Johnson.

See Figure C from the article by Jacobson, et. al. that provides a highlight of significant changes in the U.S. estate tax law:

Article re Estate Tax Highlights - Figure C

If Congress and the President do repeal a tax that has been in existince for over 100 years, it is hard to imagine that such a repeal will be permanent going forward in other administrations and congressional bodies?  In contrast, the U.S. Treasury  released its FACT SHEET: Administration’s FY2017 Budget Tax Proposals a little over a year ago where its then stated goal (under a very different Administration) was to increase the scope and amount of the estate and gift tax –

Restore the Estate, Gift, and Generation-Skipping Transfer (GST) Tax Parameters in Effect in 2009. This proposal would make permanent the estate, GST, and gift tax parameters as they applied during 2009.  The top tax rate would be 45 percent and the exclusion amount would be $3.5 million per person for estate and GST taxes, and $1 million for gift taxes.  The proposal would be effective for the estates of decedents dying, and for transfers made, after December 31, 2016.

The important question for “covered expatriates” (really for their future U.S. beneficiareis) is whether a repeal of the estate tax for U.S. persons will also include the repeal of the “inheritance tax” under Section 2801 that was newly adopted in 2008.  See, prior posts relevant to Section 2801,

–  The “Hidden Tax” of Expatriation – Section 2801 and its “Forever Taint.”

– Finally – Proposed Regulations for “Covered Gifts” and “Covered Bequests” Issued by Treasury Last Week (Be Careful What You Ask For!)

Will Treasury Ever Finalize the 2801 Regulations? Meanwhile – U.S. beneficiaries are exposed to tax on “covered gifts” and “covered bequests.”

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Treasury has not yet finalized the 2801 regulations.  The tax that is imposed under Section 2801 was passed into law in 2008, yet the collection of the tax has been suspended until the regulations are finalized.

In May 2014, I submitted comments awaiting expected proposed regulations.  Covered Gifts and Bequests: The Need for Guidance (5+ Years Out) 

The proposed regulations were eventually published in September 2015 by Treasury; but Uncle Sam Wants Youstill are not final. See, Guidance under Section 2801 Regarding the Imposition of Tax on Certain Gifts and Bequests from Covered Expatriates

See, a prior post from September 2015 – Finally – Proposed Regulations for “Covered Gifts” and “Covered Bequests” Issued by Treasury Last Week (Be Careful What You Ask For!)

In May 2016 the ABA, Real Property, Trust and Estate Law Committee issued – “Comments on Guidance under Section 2801”

I addressed the following issues in my comments:

First, the collection of the tax has been suspended until after guidance is issued along with IRS Form 708.

Second, this is the first U.S. federal tax of its kind as a true “inheritance” tax, in the case of bequests. It is also apparently the first tax of its kind on the recipient of gifts, which are otherwise exempt from income tax.

Third, the IRS has no way to help effectively track the tax, its application, collection and general enforcement.

Fourth, there is no basic guidance beyond the statute for “any United States citizen or resident” who receives such a gift or a bequest to make a host of decisions to properly determine or calculate the tax.

Fifth, presumably no “United States citizen or resident” has ever even paid such a tax, due to its suspension; although the law is now almost six years old.

Sixth, the statute imposes no time requirement for when the tax must be paid.

Seventh, since many of the assets likely to be gifted or bequeathed will be located outside the U.S. in different countries with different currencies and economic variables and legal world-map.pngsystems compared to the U.S., there is a particular need to know the allowable methods of valuing the property gifted or bequeathed.

Eighth, Chapter 4 of Subtitle A, FATCA will bring greater awareness of U.S. tax law requirements for U.S. citizens and residents living outside the U.S., specifically including Section 2801.

Ninth and finally, there have been a record number of U.S. citizens who have renounced or relinquished their citizenship during the year 2013, which increases the number of affected taxpayers who might receive covered gifts or bequests.

Finally, there have been other thoughtful comments, including from ACTEC regarding the proposed 2801 proposed regulations – but still no final regulations and no statute of limitations periods running against the government to collect taxes which may be owing going back nearly 10 years!!


New Treasury Regulations Can Effect Some Long-Term Residents (“Green Card” Holders)

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There have been numerous posts about how Lawful Permanent Residents (“LPRs”) who have not formally abandoned their green card might have adverse U.S. tax consequences as part of the U.S. “expatriation tax.”

See for instance –

Tax Expatriation: The Numbers Affected Are Far Greater for Lawful Permanent Residents vs. Citizens


Timing Issues for Lawful Permanent Residents (“LPR”) Who Never “Formally Abandoned” Their Green Card


See, Oops…Did I “Expatriate” and Never Know It: Lawful Permanent Residents Beware! International Tax Journal, CCH Wolters Kluwer, Jan.-Feb. 2014, Vol. 40 Issue 1, p9.


The U.S. Treasury issued new Regulations that can impact LPRs who have previously filed U.S. 1040NR tax returns under an applicable income tax treaty.   On December 13, 2016, the these final regulations require foreign-owned, single-member U.S. limited liability companies (“SM-LLCs”) that are treated as disregarded entities for U.S. tax purposes to file an information return to report certain transactions.

An individual who is a LPR can fall into this category in certain circumstances; namely where they cease to be a “U.S. person” under IRC Section 7701(b)(6).

Accordingly, the regulations treat such SM-LLCs as domestic corporations and require them to file IRS Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. The regulations also require these SM-LLCs to maintain records with respect to the reported information.


W-8s for U.S. Citizens Abroad: Filing False Information with Non-U.S. Banks

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Individuals who do not specialize in U.S. federal tax law, often have little detailed understanding of the U.S. federal “Chapter 3” (long-standing law regarding withholding taxes on non-resident aliens and foreign corporations and foreign trusts) and “Chapter 4” (the relatively new withholding tax regime known as the “Foreign Account Tax irs-form-w-8ben-2006-older-version-with-certification-languageCompliance Act”) rules.

Indeed, plenty of U.S. tax law professionals (CPAs, tax attorneys and enrolled agents) do not understand well the interplay between these two different withholding regimes –

Plus, the IRS forms have been significantly modified over the years; with increasing factual representations that must be made by individuals who sign the forms under penalty of perjury.  They are complex and not well understood.  For instance, the older 2006 IRS Form W-8BEN for companies was one page in length and required relatively little information be provided.

The entire form is reproduced here; indicating how foreign taxpayer information was optional and generally there was no requirement to obtain a U.S. taxpayer identification number.  It was governed exclusively by Chapter 3 and the regulations that had been irs-form-1001-old-1998-versionextensively produced back in the early 2000s.

The forms were even easier before those regulations (see old IRS Form 1001).  No taxpayer identification numbers were ever required and virtually no supporting information regarding reduced tax treaty rates on U.S. sources of income.

Life was simple back then – compared to today!

The one thing all of these forms have in common is that all information was provided and certified under penalty of perjury.  Current day IRS Forms W-8s can typically be completed accurately by experts who understand the complex web of rules.  Plus, multiple versions of W-8s exist today; most running some 8+ pages in length.

See the potpourri of current day W-8 forms –

Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)

Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)

Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding

Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding

Making certifications under penalty of perjury are more complex, the more and more factual information that is being certified.  If I certify the dog I see in front of me is “white and black” that is not a complex certification, if I see the dog and see the “white and black”.  If the dog also has some brown coloring, my certification would necessarily not be false.W-8BEN - 2016 version..PNG

However, if I have to certify as to the colors of each dog in a pack of 8 dogs (and each and every color that each dog is/was), that becomes a much more complicated certification.

That’s my analogy for the old IRS Forms W-8s and the current day  IRS Forms W-8s.

Compare that form, of just 10 years ago, with what is required and must be certified to under current law.  It can be daunting.

Now to the rub.  Individuals who certify erroneously or falsely, can run a risk that the government asserts such signed certification was done intentionally.  I have seen it happen in real cases; even though the individual layperson (particularly those who speak little to no English and live outside the U.S.) typically has little understanding of these rules.  They typically sign the documents presented to them by the third party; usually the banks and other financial institutions.

The U.S. federal tax law has a specific crime, for making a false statement or signing a false tax return or other document – which is known as the perjury statute (IRC Section 7206(1)).  This is a criminal statute, not civil.  Some people are also under the misunderstanding that a false tax return needs to be filed.  The statute is much broader and includes “. . . any statement . . . or other document . . . “.

(1) Declaration under penalties of perjury

Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter; or . . .


Therefore, if a U.S. citizen living overseas (or anywhere) signs IRS Form W-8BEN (or the bank’s substitute form, which requests the same basic information), that signature under penalty of perjury will necessarily be a false statement, as a matter of law.  Why?  By definition, the statute says a U.S. citizen is a “United States person” as that technical term is defined in IRC Section 7701(a)(30)(A).  Accordingly, IRS Form W-8BEN, must only be signed by an individual who is NOT a “United States person”; who necessarily cannot be a United States citizen.  To repeat, a United States citizen is included in the definition of a “United States person.”   Plus, the form itself, as highlighted at the beginning of the form, warns against any U.S. citizen signing such form. w-8ben-certification-portion-2016-version

Accordingly, if a U.S. citizen were to sign IRS Form W-8BEN which I have seen banks erroneously request of their clients, they run the risk that the U.S. federal government will argue that such signatures and filing of false information with the bank was intentional and therefore criminal under IRC Section 7206(1).    See a prior post,  What could be the focal point of IRS Criminal Investigations of Former U.S. Citizens and Lawful Permanent Residents?

Indeed, criminal cases are not simple, and I am not aware of any single criminal case that hinged exclusively on a false IRS Form W-8BEN.  However, I have seen cases, where the government has alleged the U.S. born individual must have signed the form intentionally, knowing the information was false.  It’s a question of proof and of course U.S. citizens wherever they reside, should take care to never sign an IRS Form W-8BEN as an individual certifying they are not a “United States person”; even if they think they are not a U.S. person

For further background information on this topic, see a prior post:  FATCA Driven – New IRS Forms W-8BEN versus W-8BEN-E versus W-9 (etc. etc.) for USCs and LPRs Overseas – It’s All About Information and More Information