Terminating US Residency Permanently Requires Yet Another Form

Past U.S. residents or residents are reminded that individuals who have expatriated or terminated their U.S. residency status must file Form 8854, Initial and Annual Expatriation Information Statement. Form 8854 must also be filed to comply with the annual information reporting requirements of Internal Revenue Code section 6039G, if the person is subject to tax under Section 877 of the Code. A $10,000 penalty may be imposed for failure to file Form 8854 when required.

IRS is sending notices to expatriates who have not complied with the Form 8854 requirements, including the imposition of the $10,000 penalty where appropriate. Failure to file or not include all the required information or the inclusion of incorrect information could lead to a penalty.

WWW.IRS.gov contains information about the Expatriation Tax including changes made to expatriation tax rules due to the American Jobs Creation Act of 2004