Andy wrote:
- quote -

Search Google for "expatriation tax"; the IRS site
(currently) comes up as the first hit.

Be aware that this stuff all changed not so long ago, and
might be changing again, making some of what you find with a
web search either outdated or speculative. Or both,
perhaps.

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Simon Baldwin wrote:

- quote -

Thanks Simon, but could you post a website or IRS pub number...??

Andy in Eureka, Texas

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Was there at one time also an asset tax associated with
giving up US citizenship? Or was that just a proposal to
substitute something on the order of the estate tax for the
10 years of income taxes? Or am I completely
misremembering?

Dan Lanciani
ddl[at]danlan.*com

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Two quick additional notes.

Firstly, in 2004 the net worth limit was raised to
$2,000,000. And secondly, note that this issue also applies
to long-term permanent residents who return to their home
countries, not just to ex-citizens.

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Andy wrote:
- quote -

Whew! thanks for that, Andy. At least I was right as to
the 10 year rule applying to the majority of people. Like
me. IF I ever decided to emigrate over to the Land of Light
where the streams flow clear and the whiskey if the best.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Andy writes:

I found this layman's explanation at a googled website and
thought it might add clarity here.

************** START OF CUT AND PASTE ***********************

A 1996 anti-expatriation law inspired by the Forbes article
asserts limited U.S. tax jurisdiction for a period of 10
years over persons who renounce their U.S. citizenship "with
the principal purpose of avoiding U.S. taxes." Also covered
by this law are permanent resident aliens ("green card"
holders) or anyone else who has resided in the United States
for any eight of the preceding 15 years.

For the purposes of this law, tax avoidance is presumed to
be the true purpose if, at the time of expatriation, an
expatriate's net worth exceeds US$552,000 or he or she pays
an annual tax bill exceeding US$110,000, figures that are
indexed for inflation annually. However, with proper
planning, it is relatively easy to avoid U.S. taxes during
this 10-year period.

The lengths to which politicians will go to penalize
expatriates is demonstrated by a never-enforced provision of
U.S. law, also enacted in 1996, that permits the Attorney
General to bar from returning to the United States anyone
who renounces their U.S. citizenship to avoid U.S. taxes.
In this manner, Congress lumped individuals exercising their
legal right to avoid taxes with narcotics traffickers and
terrorists.

*****************END OF CUT AND PASTE ******************************

Andy comments:

So, if a lot of Mexican green card holders work in the US
for 8 years and goes back to Mexico, our tax law says they
have to pay US taxes for the next 10 years..... I wonder if
anybody realizes that, or is it just another law that the US
will forget about to accomodate our Mexican neighbors ......

Also, note that the 1996 law put a NUMBER on the net worth .
If your net worth when you leave is less than $552,000 then
you do NOT have to pay US taxes after you renounce your
citizenship.....

Andy in Eureka, Texas

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Moderator:
- quote -

Andy writes:

And FYI, the US is one of only 2 or 3 nations that taxes
its citizens on their worldwide income, no matter where they
live, even after they formally renounce their citizenship
and become citizens of another country.

I thought the term was 5 years instead of 10. I suggest
that interested parties check to make sure before taking
action.. I'm going to go and check it again for my own
info.....

Andy in Eureka, Texas

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Dick Adams wrote:

- quote -

How can that even BE the law? If one renounces US
citizenship and moves to another country, how can IRS even
touch him?

ChEAR$,
Harlan Lunsford, EA n LA

----------
Moderator:
Harlan, mi amigo, it has been the law for many years. The
IRS gets him/her if and when he/she returns to the United
States. While they are waiting, they freeze any assets
they can find.

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Dick Adams wrote:

- quote -

I believe the original law contained the 10 year provision.
Pub. L. 89-809, title I, Sec. 103(f)(1), Nov. 13, 1966 for all
tax years beginning after 1966.

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Dick Adams <rdadams[at]smart.net> wrote:

- quote -

The rule's in IRC section 877. The statute has been around
for quite some time, but figuring out when the 10-year
provision was inserted might take more time than I have
right now.

Stu

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- quote -

The Foreign Investors Tax Act of 1966, Pub. L. 89-809, went
into effect on November 13, 1966.

Moderator:
Someone writing a novel needed that for setting a date.

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When someone formally renounces thier US citizenship, they
have to file US income taxes for the next 10 years. In what
year did that become the law?

Dick

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