More About Expatriation Tax
Usually the tax levied on an individual who is no longer a citizen of that country is termed as Expatriation tax and is generally the tax on the capital gains for the period the individual was a resident/citizen of that country.
It is usually applied when the citizenship of that particular country has been renounced and the property, business and accounts liquidated.
However, US taxes income that the citizens earn overseas and within US while expatriation tax are imposed to ensure none of the citizens renounce their citizenship to save on taxes that are legally due to the country.
This specific tax is levied on lawful permanent citizens or green card holders who may have abandoned the privilege, but have stayed in US for at least 8 years out of 15 years.
Although the first law to tax the expatriates was formulated in 1950s, it was in 1996 that it gained prominence after a few instances when people renounced their citizenship to evade taxation.
With the result the Reed Amendment was passed.
Later laws created a more secure net to ensure nobody could renounce the US citizenship and get away tax-free.
These laws have been created to safeguard the interests of the US government and ensure that the property and assets earned in US are taxed accordingly.
Another law that was formulated in 2009 ensured that individuals with a net worth of $2 million had to pay tax on the average income of 5 years.
The expatriate tax was mandatory as though all property and assets were liquidated before they renounced the citizenship.
Thus, the high-net worth individual has to pay all tax dues on the income and assets that were earned, paid or consolidated before the expatriation.
The Form 8854 is mandatory for individuals that renounced their US citizenship to save tax before or after 2004.
This form is essential for adhering to the IRC 877 and 877A notifications.
You can consult an immigration attorney or a CPA who deals with Expatriation Tax to understand your legal duties and responsibilities in case you have pending taxes to clear in US.
By filling the form, the IRS notifies the Department of Homeland Security about the rumination of citizenship.
But for all taxation purposes, they are treated as citizens of USA.
For those people that renounced the citizenship after June 2004, they have to adhere to the new notifications under the IRC 6039G while have to file initial and annual information statements for expatriation and Form 8854.
If you have tax issues to discuss along with the citizenship or green card status, it is best to seek a reliable and knowledgeable CPA and immigration attorney service to discuss and resolve your legal and financial problems.
Most of the immigration attorney services are experienced and can assist you and represent you in the court of law if needed on citizenship and financial litigation.
You may look online or ask for reference from your family and friends as they might have a name to suggest.
It is usually applied when the citizenship of that particular country has been renounced and the property, business and accounts liquidated.
However, US taxes income that the citizens earn overseas and within US while expatriation tax are imposed to ensure none of the citizens renounce their citizenship to save on taxes that are legally due to the country.
This specific tax is levied on lawful permanent citizens or green card holders who may have abandoned the privilege, but have stayed in US for at least 8 years out of 15 years.
Although the first law to tax the expatriates was formulated in 1950s, it was in 1996 that it gained prominence after a few instances when people renounced their citizenship to evade taxation.
With the result the Reed Amendment was passed.
Later laws created a more secure net to ensure nobody could renounce the US citizenship and get away tax-free.
These laws have been created to safeguard the interests of the US government and ensure that the property and assets earned in US are taxed accordingly.
Another law that was formulated in 2009 ensured that individuals with a net worth of $2 million had to pay tax on the average income of 5 years.
The expatriate tax was mandatory as though all property and assets were liquidated before they renounced the citizenship.
Thus, the high-net worth individual has to pay all tax dues on the income and assets that were earned, paid or consolidated before the expatriation.
The Form 8854 is mandatory for individuals that renounced their US citizenship to save tax before or after 2004.
This form is essential for adhering to the IRC 877 and 877A notifications.
You can consult an immigration attorney or a CPA who deals with Expatriation Tax to understand your legal duties and responsibilities in case you have pending taxes to clear in US.
By filling the form, the IRS notifies the Department of Homeland Security about the rumination of citizenship.
But for all taxation purposes, they are treated as citizens of USA.
For those people that renounced the citizenship after June 2004, they have to adhere to the new notifications under the IRC 6039G while have to file initial and annual information statements for expatriation and Form 8854.
If you have tax issues to discuss along with the citizenship or green card status, it is best to seek a reliable and knowledgeable CPA and immigration attorney service to discuss and resolve your legal and financial problems.
Most of the immigration attorney services are experienced and can assist you and represent you in the court of law if needed on citizenship and financial litigation.
You may look online or ask for reference from your family and friends as they might have a name to suggest.
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