The Treasury Department announced 776 renunciations, which brings the 2014 total to 2,353, on track to match last year’s record breaking 2,999 citizens who renounced.
As has been mentioned previously, this list does not include lawful permanent residents who have terminated their LPR status for purposes of these tax law provisions. For further reading on LPRs, see, Oops…Did I “Expatriate” and Never Know It: Lawful Permanent Residents Beware! International Tax Journal, CCH Wolters Kluwer, Jan.-Feb. 2014, Vol. 40 Issue 1, p9
Maybe the LPR list represents several hundred thousands of individuals? The current total estimated number of LPRs is 13.3 million for the year 2012 as reported by the Office of Statistics of the DHS. See, Estimates of the Legal Permanent Resident Population in 2012
There are two distinct ways that LPRs can terminate their tax residency status. First, through the formal immigration law process typically involving filing Form I-407. See, Who is a “long-term” lawful permanent resident (“LPR”) and why does it matter?
Second, they can terminate their LPR status, for tax purposes, by merely meeting the statutory requirements of IRC Section 7701(b)(6). This simply requires the individual to move from the U.S. and live in a country with a U.S. income tax treaty and meet the other two statutory requirements.
This statutory language has three tests for when the individual is no longer a LPR for federal tax purposes:
- The individual is treated as a resident of a foreign country under the provisions of a tax treaty;
- The individual does not waive the benefits of the treaty, and
- Notifies the Secretary of the commencement of such treatment.
The U.S. federal government has made the life of world travelers much simpler over the last few years, for those who have signed up and participate in one of the “trusted traveler programs.“
Entry into the U.S. through customs and immigration checkpoints is fast tracked and explained in more detail below.
Also, a related program that provides much convenience to travelers is the Pre-TSA. This is a program described on the government website as –
|TSA Pre✓™ Experience:
||No Removal of:
You can typically avoid long lines of travelers who do not have such clearances and it provides a more convenient way of traveling in and out of the U.S.
However, once a USC renounces, they can no longer travel on their previous status as a USC under a “trusted traveler program” where they previously applied and represented they are a USC.
Once a person ceases to be a USC, they can no longer represent themselves to be a citizen. Indeed, there is a specific statutory provision that holds that any person falsely claiming citizenship can be found to be inadmissible for entry into the U.S. 8 U.S. Code § 1182 – Inadmissible aliens
Accordingly, you should not continue to travel on your existing/old “trusted traveler program” documents. You will need to re-apply as a non-USC. More details on the Global Entry program are provided below from the government’s own website –
What is Global Entry?
Global Entry is a U.S. Customs and Border Protection (CBP) program that allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States.
How Does the Global Entry Program Work?
Global Entry is a U.S. Customs and Border Protection (CBP) program that allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States. Though intended for frequent international travelers, there is no minimum number of trips necessary to qualify for the program. Participants may enter the United States by using automated kiosks located at select airports.
At airports, program participants proceed to Global Entry kiosks, present their machine-readable passport or U.S. permanent resident card, place their fingertips on the scanner for fingerprint verification, and make a customs declaration. The kiosk issues the traveler a transaction receipt and directs the traveler to baggage claim and the exit.
Travelers must be pre-approved for the Global Entry program. All applicants undergo a rigorous background check and interview before enrollment.
How does the basic premiss that there are ‘Unpaid Taxes on Billions in Hidden Offshore Accounts'” hurt the average U.S. citizen taxpayer living overseas?
Location: Dirksen Senate Office Building
The Permanent Subcommittee on Investigations will hold a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, at 9:30 a.m., in Room G-50 of the Dirksen Senate Office Building.
The hearing will continue the Subcommittee’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses will include representatives from a Swiss bank and the U.S. Department of Justice. A witness list will be available Monday, February 24, 2014.
Do some former U.S. citizens now consider this a “badge of honor” to have renounced their U.S. citizenship?
A record number of U.S. citizenship renunciations in 2013, some 3,000, begs the question: “Why are so many U.S. citizens renouncing?”
Wow, the number of 2,999 U.S. citizens who renounced in the year 2013 shattered the prior record set in 2011 of 1,782 renunciations. Why so many renunciations?
The U.S. Treasury Department released the number of U.S. citizens who renounced for 2013. The Federal Registry reported some 631 U.S. citizens who renounced for the quarter; for a total of 2,999 former citizens for the entire year of 2013.
Click here for complete details of the registry
See also more information in this blog under the “Government Resources” section for more details.
Is the Senate Finance “Punting” on reforming international tax rules for U.S. citizens living overseas?
Summary of Staff Discussion Draft: International Business Tax Reform
Chairman Max Baucus
U.S. Senate Committee on Finance
“The staff discussion draft does not address the international tax rules addressing individuals, whether for U.S. citizens living overseas or foreign nationals moving to the United States. The Chairman’s staff is considering reforms to simplify the rules in this area while appropriately taxing such individuals. Comments are requested regarding the scope and mechanics of reforms in this area.”
Why should the names of former U.S. citizens be published – especially if they have lived all of their lives in the U.S.?
Why should the names of former U.S. citizens be published – especially if they have lived all of their lives outside the U.S.? The law provides for publication (Section 6039G) and apparently there is no method by which they can be suppressed. Should Congress change this law?
Federal Benefits and Obligations – US Department of State – Will you lose your social security benefits? Will you lose access to medicare?
One very important consideration for all who are considering renouncing U.S. citizenship are the loss of U.S. federal government benefits. Will you lose your social security benefits? Will you lose access to medicare?
Federal Benefits and Obligations
Federal Benefits and Federal Agency Programs and Services for U.S. Citizens Abroad
Overseas Americans: Time to Say ‘Bye’ to Uncle Sam? – Wall Street Journal… What are the most important questions you must ask prior to renouncing U.S. citizenship or formally abandoning your lawful permanent residency?
by Laura Saunders Aug 17, 2013 – The U.S. tax code does allow taxpayers living overseas an exemption … It includes people born on U.S. soil as well as people born to U.S. citizens living abroad. … In 2010, Congress passed the Foreign Account Tax Compliance Act, … Important Fatca provisions have been postponed until July 1, 2014, but …
What are the most important questions you must ask prior to renouncing U.S. citizenship or formally abandoning your lawful permanent residency?
U.S. Citizens and Resident Aliens Abroad
If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.
When to File
If you are a U.S. citizen or resident alien residing overseas, or are in the military on duty outside the U.S., on the regular due date of your return, you are allowed an automatic 2-month extension to file your return and pay any amount due without requesting an extension. For a calendar year return, the automatic 2-month extension is to June 15.
If you are unable to file your return by the automatic 2-month extension date, you can request an additional extension to October 15 by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, before the automatic 2-month extension date. However, any tax due payments made after June 15 will be subject to both interest charges and failure to pay penalties.