Abandoning your U.S. citizenship or green card status will require more than going through the process with U.S. consular officials. Our firm assists clients who are considering relinquishing their U.S. citizenship or long-term residency status in developing a holistic perspective that accounts for tax, immigration, and other financial planning aspects of this complicated and emotional decision.
For U.S. citizens, the first step is scheduling a meeting with U.S. consular officials in your new country of nationality to go through the renunciation process. The fee for this was recently raised by U.S. immigration officials to $2,350! Green card holders can typically handle their relinquishment by mail.
In addition, all U.S. citizens, and any green card holder who has held such status during eight of the prior fifteen years, must submit a statement of expatriation with the IRS after completing the process with U.S. immigration officials. Individuals who meet the definition of a “covered expatriate,” will be subject to an exit tax which is figured based on deemed sale of assets and distribution of certain tax-deferred savings arrangements. A covered expatriate is defined as someone with net worth greater than $2 million or who has maintained an annual income tax liability above $162,000 (2017) over the prior five years. Any individual who fails to certify that they have filed U.S. tax returns for the prior five years will also be classified as a covered expatriate and would be subject to the exit tax.
Our team of tax and immigration attorneys will work with you to understand the broader implications associated with abandoning your U.S. status and any limitations on travel or U.S. benefits you will subsequently face so that you can make an informed decision. We assist with preparation of necessary filings and can help analyze any available planning strategies to minimize your exposure to the exit tax. If you are considering relinquishing your U.S. citizenship status contact us now to schedule a consultation.