Expatriation Relief Procedures

Expatriation Relief Procedures

The I.R.S. has certain relief procedure rules in the context of expatriation. Only a taxpayer whose past noncompliance was due to non-willful conduct may use these procedures. There are six requirements, if a taxpayer fails to meet one of these requirements then they will not be able to avail themselves of the relief procedures. All eligibility criteria must be strictly met to use these procedures. The requirements are as follows:

  1. You have relinquished your U.S. citizenship after March 18, 2010;
  2. You have no filing history as a U.S. citizen or resident;
  3. You did not exceed the threshold in IRC Section 877(a)(2)(A), related to average annual net income tax for the period of 5 tax years ending before your date of expatriation;
  4. Your net worth is less than $2,000,000 at the time of expatriation and at the time of making your submission under these procedures;
  5. You have an aggregate total tax liability of $25,000 or less for the five tax years preceding expatriation and in the year of expatriation (after application of all applicable deductions, exclusions, exemptions and credits, including foreign tax credits, but excluding the application of IRC Section 877A and excluding any penalties and interest); and,
  6. You agree to complete and submit with your submission all required Federal tax returns for the six tax years at issue, including all required schedules and information returns.

 

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