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Accidental Americans: Remedying Noncompliance, IRS Streamlined Procedures, Relinquishing a Green Card, Exit Tax

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, May 3, 2022

Recorded event now available

This webinar will explain which former U.S. residents, with no or insignificant ties to the U.S., may be subject to U.S. tax and information return reporting requirements. Our panel of foreign tax experts will discuss required filing and reporting requirements, using IRS' streamlined procedures to become compliant, and terminating U.S. residency status for citizens and green card holders for advisers working with multinational taxpayers.

Description

"Accidental Americans" are individuals who are deemed to be U.S. citizens but have little connection with the U.S. These individuals include those born to a U.S. citizen but living most of their lives abroad, green card holders who left the country, citizens who moved out of the U.S. long ago, and those born in the U.S. whose parents are not citizens.

U.S. citizens and residents are taxed on their worldwide income no matter where they reside or where their income is generated. Green card holders are treated as lawful permanent residents, as are individuals meeting the substantial presence test. Departing the U.S. without properly terminating residency status or renouncing citizenship, and failing to meet continuing filing and tax obligations, can result in numerous and substantial compliance and tax penalties.

Severing ties with the U.S. was intended to be a proactive process. Citizens can expatriate and, if they are a covered expatriate, are required to pay an exit tax. A green card holder can apply for abandonment, or dual-status taxpayers might apply tie-breaker rules to end ties with the U.S. In any event, past filing and payment obligations will need to be addressed. International tax advisers need to understand which individuals may be subject to unexpected U.S. tax and reporting obligations and what courses of action are available to rectify these oversights.

Listen as our panel of qualified international tax advisers explains steps U.S. citizens and residents can take to renounce their status and satisfy U.S. filing and reporting requirements.

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Outline

  1. Who are Accidental Americans?
  2. Filing obligations
    1. Income tax
    2. Estate and gift tax
    3. Information returns
    4. IRS streamlined procedures
  3. Renouncing or retaining citizenship
  4. Relinquishing green card status
    1. Revocation
    2. Abandonment
    3. Reclassification
  5. Exit tax
    1. Planning
    2. Form 8854, Initial and Annual Expatriation Statement
    3. Covered expatriates
    4. Relief Procedures for Certain Former Citizens

Benefits

The panel will cover these and other critical issues:

  • Which penalties can be abated by using the IRS streamlined procedures?
  • What forms and returns are Accidental Americans likely required to file?
  • What methods are available for green card holders to sever ties with the U.S.?
  • How is the exit tax calculated and who is a covered expatriate?

Faculty

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.
Principal
Offit Kurman

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

Minott, Katelynn
Katelynn Minott, CPA
CEO, Managing CPA
Bright!Tax

Ms. Minott is an expert in US taxation issues for Americans abroad, working with clients in 200 countries. She has...  |  Read More