07 December 2017

2017 on track to be banner year for expatriations

This article, initially published in the Bloomberg BNA Daily Tax Report on December 7, 2017 discusses the steady increase in the number of citizens and long-term permanent residents who relinquish their U.S. citizenship or U.S. green card and warn of traps for the unwary including the so-called ‘‘mark-to-market’’ or ‘‘exit’’ tax.

The third quarter numbers are out. It is clear that 2017 is setting a record breaking pace for Americans giving up their citizenship.

Each quarter, the Internal Revenue Service publishes a list of the names of each person who has given their United States citizenship. In our experience, the list is intended to be but is clearly not complete). This list includes certain long-term residents who are treated as if they were citizens of the United States who lost citizenship. On November 2, 2017, the IRS issued a Notice listing American expatriates for the quarter ended September 30, 2017 reflecting 1,376, with a year to date figure of 4,448. At this rate, 2017 will almost certainly be the highest expatriation year on record as it is already clearly much higher than an average year. To put these number in context, the third quarter figure listed for 2017 is over thirteen times the same figure for 2007. The year to date figure for 2017 alone approximates the total number of expatriations for 1991 through 1997.

While the number of expatriates is small as compared to the overall population on the United States as a whole, the rate of expatriation has been steadily increasing.

Click here for full article as originally published on December 07, 2017 by Bloomberg BNA Daily Tax Report.