US Citizens and Long Term Residents.
- As opposed to the Act of Renunciation, the American tax authority – Internal Revenue Service – considers that the expatriating act is not completed until the emigrant has filed Form 8854 and notified the Department of State or Department of Homeland Security.
- Consequently expatriating for immigration purposes does not relieve you of the obligation to file US tax returns and report worldwide income as a citizen or resident of the United States.
- The date of your tax expatriation is the later of the date you notify the relevant agency of your expatriating act or the date Form 8854 is first correctly filed.
Lawful Permanent Residents (Green Card Holders).
- Regardless of whether the US Citizenship and Immigration Service no longer recognizes the validity of your Green Card because you have been absent from the US for some time or the Card is more than 10 years old, you must continue to file US tax returns until there has been a final determination that your Green Card has been revoked or abandoned.
- If the Green Card is surrendered during a taxable year, your tax status terminates on the last day of the calendar year. If you can prove that you maintained a closer connection with the foreign country, your US residency termination date is established from the date of surrendering the Card. If you were substantially present in the US, the residency termination date is the later of the date of the Card’s surrender or the last day of physical presence in the US.
Failure to certify that you have complied with all federal tax obligations for years preceding the date of your expatriation refers to any US person who has not kept current with income tax and information filing requirements. A US person is for this purpose defined as a US citizen, US resident or Green Card Holder (or US emigrant).
- To comply with federal tax obligations, the US person must:
- File the current 2017 tax return and the previous three years of tax returns for 2016, 2015 and 2014 on which is to be reported worldwide income. If taxes are owed, then the filing obligation must also include 2013, 2012 and 2011.
- File the Foreign Banking Account Report (FBAR) for the years 2011 - 2016 in which the aggregate value each year of all foreign accounts exceeded $10,000. The 2017 FBAR must be filed by the due date of the tax return.
- File the Statement of Specified Foreign Financial Assets - Form 8938 (Foreign Account Tax Compliance Act (FATCA)) - for 2014 - 2016 if you are a US citizen, US Resident Alien, Nonresident Alien who elects to be treated as a Resident Alien for purposes of filing a joint income tax return or a Nonresident Alien who is a bona fide resident of American Samoa or Puerto Rico according to established thresholds. The 2017 FATCA form is due with the tax return.