Expatriation Planning for U.S. Citizens and Green Card Holders: Opportunities and Considerations

Summary

The United States (U.S.), like many other countries, places burdensome tax implications on certain individuals effectively departing the country's worldwide income tax net. In the U.S., a tax expatriation occurs when an individual's U.S. citizenship or long-term permanent residence is terminated if certain requirements are met. Long-term permanent residence, in general, is met if an individual has held a green card in any part of at least eight of the fifteen tax years ending in the year of termination via filing Form I-407, Record of Abandonment of Lawful Permanent Resident Status. Expatriation can also occur for a green card holder who files Form 1040-NR, U.S. Nonresident Alien Income Tax Return, based on residence in a foreign country under the terms of a U.S. income tax treaty.