Limited Period Offer - Get Unlimited Access to 10k+ hours of content with myCPE Prime at $199Subscribe Now

Everything you need to know: "Expatriation"- giving up a green card (LTR) or US Citizenship

  • Accountant
  • AFSP
  • CRTP
  • CGFM
  • CPA (US)
  • EA
  • ORTP
  • ChFC
  • Maryland Tax Preparer
  • FSCP
  • CASL
  • ChSNC
  • RICP
  • WMCP
  • Course Description
  • Course Qualification
  • Presenter
  • FAQ

Course Description

Course Description

Some of your clients are US citizens who may be thinking of giving up their citizenship. This number may be small, but many of your clients are green card holders.

How many green card holders truly understand what will happen to them if they hold the card for 8 “tax years” (that can be far less than 8 calendar years!) and then relinquish the card?

How many understand that merely because the card has “expired” for immigration purposes, the mere expiration does not let them off the hook for tax purposes?

Green card holders with expired cards remain liable for paying US tax as tax residents. In addition, those “expired” years count in determining if they have held the card long enough to be subject to the “expatriation” tax regime once the card is formally relinquished or administrative action is taken.

If the US citizen giving up citizenship, or the green card holder giving up the card is classified as a “covered expatriate” (CE), the expatriation regime applies. The regime will impose an “exit tax” on a deemed sale of the client’s worldwide assets. Additionally, a 40% transfer tax will be imposed on any US recipients of a gift or inheritance from the CE at any time in the future.

Understanding how to advise clients about the complex tax aspects of the US “expatriation” tax regimes can create a whole new line of business for tax advisors, enrolled agents, and return preparers seeking to expand their US tax practice.

Don’t lose potential big business opportunities because you do not fully understand the expatriation rules. The regimes should be understood by any client who is thinking of obtaining a green card or US citizenship, as well as by those thinking of relinquishing the card or citizenship.

Expatriation matters have grown in importance over the years as more and more individuals are divorcing from the United States. The IRS now has an audit campaign in place for individuals expatriating any time after June 2008. It is aggressively seeking unpaid exit tax and penalties.  Now more than ever, tax professionals need to understand the expatriation rules and how to engage in constructive tax planning for clients to escape the harsh results. This CPE course provides all the information you need.

This CE/CPE Tax course will provide an in-depth examination of the overall framework and rules surrounding the expatriation tax rules. This is one of the most complex and misunderstood areas in US international tax. The rules have changed several times over the years, adding to the complexity. My CPE course makes it easy and digestible.

Learning Objectives

  • To explain the various ways a US citizen can “expatriate” and which carry greater tax risks and issues.
  • To discuss how a green card holder is considered to “expatriate” – you will be surprised.
  • To explore the IRC Section 877 and 877A “expatriation” regime rules – Exit Tax and how the tax applies to various assets including the principal residence, IRAs/401(k)s/Coverdell’s, US and foreign pensions, interests in trusts.
  • To identify who will be treated as a CE subject to t