Leaving U.S. Over Election? Renunciation of US Citizenship Explained
Several popular celebrities in the U.S. have been saying that they will move out of the U.S. if the election does not go their way. “Breaking Bad” star Bryan Cranston says he will “absolutely” move to Canada if Donald Trump is elected President on November 8. Cranston joins other celebrities, including Angelina Jolie, who have said they would leave the U.S. if the Republican nominee wins. Perhaps these are just temporary moves, not permanent.
But if you plan to really leave the U.S. for good over the election–or for taxes – or for any other reason – it is important to know the process. The process is not complicated, but it needs to be followed. In 2015, there were approximately 4,300 expatriations, and 2016 is on pace to exceed it.
The process of renunciation of U.S. Citizenship is not terribly involved, however it is does take some time and patience.
The steps that are involved are the following:
· U.S. State Department
It is required to file with the US State Department a renunciation of citizenship. There are five forms which must be filled out and filed with State. The forms are required as well an “exit interview”. The appointment is made in advance and the forms are filed at the time of the meeting.
- U.S. Treasury
A citizen renouncing citizenship is required to file a final tax return. This return will be for January 1st through the day the citizen is expatriated. The file is either Form 1040 or 1040NR (if applicable) for the final return. In addition, IRS Form 8854, the Expatriation Information Statement, is the exit tax form, and it’s filed along with your final return. Form 8854, which lists what, if any, exit tax is due.
What is required?
The information the client should provide to us is the following:
- Is the client alone or is the client and spouse and/or children denouncing?
- Does the client have Israeli Citizenship?
- What is the property or assets the client has in the US? Value?
- Is the client free from legal judgements and tax judgements?
- Is the client current on all US taxes for previous years (2015 and back)?
Once we have some basic information, we can give a good estimate of required hours involved.
The workplan for the client
- The initial meeting (either in person or a call) will be to discuss details of renunciation. We will be sorting out necessary and required details, providing a listing of paperwork that is required, and going through the forms that will be filled out.
- The forms for the U.S. State Department will be filled out either in conjunction with Weinstein & Co. or with assistance from us.
- The tax returns for the IRS will be prepared either by with Weinstein & Co. or with assistance from us.
- The appointments for U.S. State will be organized and the client can have a member of our office attend with her or our firm can provide background and assistance prior to the meeting.
Overall, the process is fairly straightforward and can be accomplished in a relatively short period of time.
