| Instructions for Form 8854 |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
If you expatriated or terminated your long-term resident status after June 3, 2004, use Form 8854 to provide the information
required by sections
6039G and 7701(n).
Expatriation or Termination of Residency
For purposes of immigration and nationality law, the date of your expatriation or termination of residency depends on when
certain acts occurred.
The specific acts that must have occurred depend on whether you are a former U.S. citizen or a former U.S. long-term resident
(LTR). The specific acts
are described below.
If you were a U.S. citizen, you expatriated:
-
On the date you renounced your U.S. citizenship outside the United States before a diplomatic or consular officer of the United
States
pursuant to paragraph (5) of section 349 of the Immigration and Nationality Act, provided there is a determination of loss
of citizenship by the
Secretary of State, as reflected by your receipt of an approved Certificate of Loss of Nationality, or
-
On the date you voluntarily performed an act of expatriation with the specific and contemporaneous intention of giving up
your U.S.
citizenship, provided there is a determination of loss by the Secretary of State, as reflected by your receipt of an approved
Certificate of Loss of
Nationality. An act of expatriation is any act defined as a potentially expatriating act either by paragraph (1), (2), (3),
or (4) of section 349(a)
of the Immigration and Nationality Act or by any other Act of Congress defining expatriating acts.
While your citizenship may have ended because a federal court revoked your naturalization under section 340 of the Immigration
and Nationality Act,
this type of loss of citizenship is not treated as an expatriating event for purposes of section 877 and this form, if after
the revocation, you hold
the status under the Immigration and Nationality Act of an alien lawfully admitted for permanent residence.
Former U.S. Long-Term Residents (LTRs)
If you were a U.S. long-term resident (LTR) (see Definitions below), you terminated your residency:
-
On the date you voluntarily abandoned your lawful permanent resident (LPR) status by filing Department of Homeland Security
Form I-407 with
a U.S. consular or immigration officer, and the Department of Homeland Security determines that you have, in fact, abandoned
your LPR status,
-
On the date you became subject to a final administrative order for your removal from the United States under the Immigration
and Nationality
Act and you actually left the United States as a result of that order, or
-
If you were a dual resident of the United States and a country with which the United States has an income tax treaty, on the
date you
commenced to be treated as a resident of that country and you determined that, for purposes of the treaty, you are a resident
of the treaty country.
See Treas. Reg. Section 301.7701(b)-7 for information on other filing requirements for such individuals.
Former U.S. LTR.
You are a former U.S. LTR if you were a lawful permanent resident of the United States for at least 8 of the 15 consecutive
tax years ending with
the date of your termination of residency.
LPR.
You are an LPR of the United States if you have been given the privilege, according to U.S. immigration laws, of residing
permanently in the United
States as an immigrant. You generally have this status if the Immigration and Naturalization Service (now the U.S. Citizenship
and Immigration
Services (USCIS)) has issued you an alien registration card, also known as a “ green card.”
If you expatriated or terminated your long-term resident status on or before June 3, 2004, see Pub. 519.
If you expatriated or terminated your long-term resident status after June 3, 2004, until you file Form 8854 and notify the
Department of State or
the Department of Homeland Security of your expatriating act or termination of residency, your expatriation or termination
of residency for
immigration purposes will not relieve you of your obligation to file U.S. tax returns and report your worldwide income as
a citizen or resident of the
United States. For purposes of U.S. tax rules, the date of your expatriation or termination of residency will be the later
of the date you notify the
relevant agency of your expatriating act or termination of residency, or the date this form is filed in accordance with these
instructions. For
purposes of determining the date on which this form is filed, apply the rules of section 7502. Generally, this is the postmark
date.
You must file Form 8854 to:
-
Establish that you have expatriated or terminated your LTR status for tax purposes, or
-
Comply with the annual information reporting requirements of section 6039G, if you are subject to tax under section 877.
Note. If you were a naturalized citizen, but lost your citizenship because a federal court revoked your naturalization under section
340 of the Immigration and Nationality Act, you do not need to complete this form if, after the revocation, you hold the status
under the Immigration
and Nationality Act of an alien lawfully admitted for permanent residence. You must complete this form, however, if you were
a naturalized citizen and
you gave up your citizenship by expatriation under section 349 of the Immigration and Nationality Act.
Taxation under section 877.
You are subject to taxation under section 877 if you are a former U.S. citizen or former LTR, and any one of the
following applies to you.
-
Your average annual net income tax liability for the 5 years ending before the date of your expatriation or termination of
residency is more
than the amount listed below.
-
$124,000 if you expatriated in 2004.
-
$127,000 if you expatriated in 2005.
-
$131,000 if you expatriated in 2006.
This amount is subject to cost-of-living adjustments. The IRS will announce the amounts applicable to future years in annual
revenue procedures
that will be published in the Internal Revenue Bulletin. The Internal Revenue Bulletins can be accessed at
www.irs.gov/irb.
-
Your net worth is $2 million or more on the date of your expatriation or termination of residency.
-
You fail to certify on Form 8854 that you have complied with all of your U.S. federal tax obligations for the 5 years preceding
the date of
your expatriation or termination of residency.
Exceptions to Section 877
Provided you have certified that you have met your tax obligations for the 5 tax years prior to your expatriation or termination
of residency, you
will not be subject to tax under section 877(b) if either of the following exceptions applies.
-
You became at birth a U.S. citizen and a citizen of another country, you continue to be a citizen of the other country, and
you have no
substantial contacts with the United States.
-
You became at birth a U.S. citizen, neither of your parents was a U.S. citizen at the time of your birth, your loss of citizenship
occurred
before you attained age 18½, and you were not present in the United States for more than 30 days during any of the 10 calendar
years
preceding your loss of citizenship.
See the instructions for lines 9 and 10 on page 3.
Tax Consequences of Presence in the United States After Expatriation or Termination of Residency
If, for any tax year during the 10-year period in which you are otherwise subject to section 877, you are present in the United
States for more
than 30 days in a calendar year ending in such tax year, you will be treated as a U.S. citizen or resident for that tax year.
You will be subject to
U.S. tax on your worldwide income unless the following exception applies.
Exception.
You can be present in the United States for up to 60 days without being treated as a U.S. citizen or resident if
you are performing personal
services in the United States for an employer who is not related (within the meaning of sections 267 and 707) to you and you
meet either of the
following requirements.
-
You were a U.S. citizen and, within a reasonable period following your expatriation, you became a citizen or resident fully
liable to tax in
the country in which either you, your spouse, or either of your parents were born, or
-
For each year in the 10-year period ending on the date of expatriation or termination of residency, you were physically present
in the
United States for 30 days or less.
See Pub. 519, U.S. Tax Guide for Aliens, for details about what constitutes a day of presence in the United States.
Initial Information Statement
If you are filing this form because you ceased to be a U.S. citizen (expatriated) or terminated your U.S. residency during
the tax year, there is
no due date for filing this form. However, until you both file this form with the Internal Revenue Service and notify either
the Department of State
or the Department of Homeland Security of your expatriation or termination of residency, you will continue to be treated,
for tax purposes, as if you
were still a U.S. citizen or resident. The date of your tax expatriation (the date you are no longer subject to U.S. taxation
on a worldwide basis) is
the date on which you have satisfied both requirements.
Annual Information Statement
If you are a nonresident alien filing this form to comply with the annual information reporting requirements of section 6039G,
this form should be
attached to a timely filed Form 1040NR, U.S. Nonresident Alien Income Tax Return, and a copy of the form should be sent to
the address below. If you
are not required to file Form 1040NR, submit this form to the address below by the due date for filing Form 1040NR.
If you are present in the United States following your expatriation and are subject to tax as a U.S. citizen or resident,
file Form 8854 with your
Form 1040 and send a copy to the address listed below.
Internal Revenue Service
11511 Roosevelt Boulevard
Drop Point S607-F8854
Philadelphia, PA 19154
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