You were born in America and left as a baby. The IRS still counts you.

It is someone who holds American citizenship without ever really choosing it, usually through birth in the United States or through an American parent. They often live their whole adult life elsewhere and never file an American return.

The label is informal. The obligation behind it is not.

In our practice the typical client is a British professional in their thirties or forties, born abroad during a parent's posting.

Because America taxes by citizenship rather than by residence, which almost no other country does. The IRS states plainly that citizens abroad are subject to tax on worldwide income from all sources, and that the filing rules are generally the same abroad as at home.

Living in Britain for forty years does not change that, and neither does never having visited as an adult. An accidental American carries exactly the same duty as a citizen raised in Ohio.

The IRS page for citizens abroad sets out the starting position.

Most often by birth on American soil, which generally confers citizenship automatically. It can also pass from an American parent to a child born abroad, subject to conditions about the parent's own time in the United States.

Neither route requires a passport, a Social Security number or any application.

So an accidental American can hold citizenship for decades without a single document proving it in their drawer.

That is the heart of the problem. Nothing ever prompted you to ask the question.

Through a place of birth. British banks run FATCA due diligence under an agreement with the United States, and HMRC guidance treats an unambiguous US place of birth as an indication that an account is reportable. The bank must then either cure that indication with documents or report the account.

That is why the letter arrives after years of silence.

It is also why moving banks rarely helps, because every institution runs the same checks.

HMRC guidance lists the documents that cure a US place of birth. They include a self-certification that you are neither a US citizen nor resident, a non-US passport, and a Certificate of Loss of Nationality or a reasonable explanation for not having one.

Signing a self-certification you know to be false is not an option.

The curing rules sit in HMRC's manual on a US place of birth.

Most banks give a deadline. If you need more time, tell them you are applying for a number. That is usually enough to pause things.

Usually very little, and often nothing at all. British income tax is generally higher than American tax on the same salary, so foreign tax credits or the earned income exclusion tend to eliminate the American bill. What remains is the duty to file and to report accounts.

Investment income is where exceptions appear.

British funds and ISAs can produce American tax that British rules never charge.

Current accounts and cash savings are simple, because interest is ordinary income and British tax usually covers it. Investment wrappers are different. An ISA is tax-free in Britain and fully visible to American rules.

British funds inside those wrappers are the sharpest edge. American law can treat them as passive foreign investment companies, with harsh default treatment and, above a small de minimis, an annual form for each fund.

So an accidental American with a stocks and shares ISA has a harder calendar than one with only a salary account.

Two separate things, run by two separate agencies. The income tax return goes to the IRS where your income passes the filing threshold for your status. The FBAR goes to FinCEN where your foreign accounts together exceeded $10,000 at any time in the year.

The FBAR threshold catches almost everyone with a salary account.

FinCEN runs the FBAR filing system directly.

It usually changes the filing status, and that changes the threshold dramatically. An American married to someone who is not American typically files as married filing separately, and the income threshold for that status is only $5.

So the question of whether you need to file is rarely a close one.

We cover the choices in married to a Briton: the filing status choice.

Sometimes, and it depends on the parent's own history rather than their passport. Citizenship passes to a child born abroad only where the American parent spent enough time in the United States before the birth.

Many accidental Americans left too young to meet that condition, so their children are often not citizens at all.

Check it properly before assuming either answer. We explain the rules in your baby may be American.

For most people abroad who simply did not know, it is the Streamlined Foreign Offshore procedure. It needs returns for the most recent three years and FBARs for the most recent six, with a signed statement that the failure was not wilful.

Qualifying filers on the Foreign route face no failure-to-file, accuracy, information return or FBAR penalties.

The IRS page for the Foreign route sets out the conditions.

Someone whose failure was not wilful and who meets the non-residency test. For a citizen, that means having no US abode and being physically outside the United States for at least 330 full days in one of the last three years for which returns were due.

Almost every accidental American living in Britain clears that easily.

The non-wilful certification is the part that deserves real care.

Write it in your own words and keep it specific. Say when you learned of the duty, and what you did next.

Yes, and it is often the longest step. The IRS says returns under the Streamlined procedures must carry a valid taxpayer number, and for a citizen that means a Social Security number. Someone eligible for one cannot use an ITIN instead.

In Britain, adults apply through the Federal Benefits Unit at the US Embassy in London, in person.

So start that application before anything else.

Allow two to three months. Book the interview early and bring original documents, not copies.

Some people do, and it can be the right long-term answer. Renouncing ends future filing duties, but it does not wipe out past ones, and a proper exit requires a final return and an expatriation statement on Form 8854.

Certain exit rules depend on your net worth and past compliance.

We cover the mechanics in the exit tax: what renouncing actually triggers.

So get the past right first. Then decide about the future with a clear head.

A separate relief procedure exists for exactly that. It covers people who relinquished citizenship after 18 March 2010, whose failures were not wilful, whose net worth is under $2,000,000 and whose total liability over the relevant six years is $25,000 or less.

Where you qualify, the IRS says it will not assert penalties.

The IRS relief procedures for former citizens list every condition.

Your full birth certificate first, because it answers the citizenship question and supports the Social Security application. Then three years of P60s and payslips, and the highest balance of each account across six years.

Pension statements matter too, since workplace schemes can carry their own reporting.

Our clients usually find the bank balances the slowest part, so request statements early.

Keep copies of everything you send. The same papers answer the bank, the IRS and FinCEN.

The order matters, because several steps take weeks and later ones depend on earlier ones.

Take a Leeds teacher born in Houston during her father's secondment, who left at eighteen months. Her bank writes asking for a US tax number, and she discovers she has never filed.

Her British income tax exceeds any American liability, so her three returns show no tax due after credits. She files six FBARs for her current and savings accounts.

She qualifies for the Foreign route and faces no penalties. This example is illustrative, not advice.

The whole process took her four months. Most of that was waiting for the Social Security number to arrive.

First, ignoring the bank letter in the hope it goes away. The account gets reported regardless.

Second, signing a self-certification that you are not a US citizen when you are.

Third, filing only this year's return and leaving the past untouched, which forfeits the structured route.

Fourth, renouncing in a hurry before the compliance history is in order.

Fifth, assuming an accidental American with no American income has nothing to report. The duty follows citizenship, not the source of the money.

We start with the citizenship question and the Social Security number, because nothing else can move without them. Then we prepare the Streamlined filing package as one piece, returns and FBARs together.

Our notes on the Streamlined procedures and how HMRC knows your income cover the surrounding ground.

This article is general information, not personal tax advice. Talk to us before you answer the bank.