Form 8854 for expatriation

llebmj · Post by **llebmj** » Thu May 21, 2015 9:58 am

I have lived in Canada my whole life, and expatriated from being a US citizen in October 2014.
I am trying to figure out if I have to file 8854.
I do not have more than $2M, I have been compliant with US taxes, my tax bill does not meet the $157K, and I also have the exception that I have never lived in the US.
Therefore I understand that I am not a covered person.

On the 8854 instructions for someone who expatriated after June 2008 it says:
Who Must File
If you expatriated after June 16, 2008,
the expatriation rules apply to you if any
of the following statements apply....

None of the rules apply to me. Therefore it seems to me that I dont even have to file 8854.

If I do need to file...

Is this correct?
Thanks so much,
John.

nelsona · Post by **nelsona** » Thu May 21, 2015 10:28 am

Seems correct.

Also, a little further:

You may qualify for the exception described above if you meet both of the following requirements.

You became at birth a U.S. citizen and a citizen of another country and you continue to be a citizen of, and are taxed as a resident of, that other country.

You were a resident of the United States for not more than 10 years during the 15-tax-year period ending with the tax year during which the expatriation occurred. For the purpose of determining U.S. residency, use the substantial presence test described in chapter 1 of Pub. 519.

rafa02 · Post by **rafa02** » Thu May 21, 2015 1:32 pm

I am a bit confused as to whether the 8854 would be required in your situation (and I have been looking at a similar situation with some family members). Are you truly exempt from the expatriation rules? From what I have read, a non-covered expat due to being below the net worth limit and tax liability limit, will automatically become a covered expat if the 8854 is not filed accurately and on time, but of course that is not your situation

However, someone in your situation is still obligated to certify that you are compliant. Does this mean an 8854?

"Note, however, that you will still have to certify that you are up to date with all U.S. tax requirements. Failure to do so will render you a Covered Expatriate even if you satisfy all the dual citizenship requirements." http://hodgen.com/chapter-4-are-you-a-c ... xpatriate/

nelsona · Post by **nelsona** » Thu May 21, 2015 1:45 pm

It does indeed seem like you need to file 8854 to prove that you don't need to file 8854.

llembj does need to file a 1040 for a portion if not all of 2014, so it would seem that adding 8854 would not be a burden.

So the question is what does the dual ciatixen exception cover? tdoes it avoid the need to file 8854? Does it avoid being considered a CE, or does it cover except one from the need to show compliance?

From hogden, it would appear that it exempts you from being a CE, but not from filing 8854, even if you meet the criteria of a CE. You stil must be current in your taxes.
http://hodgen.com/dual-citizen-exit-tax/

nelsona · Post by **nelsona** » Thu May 21, 2015 1:52 pm

Som to sum up in typical IRS fashion,

If you expatriate after June 16, 2008, and qualify for the dual citizen exception, you do not have to file 8854 only if you file 8854.

llebmj · Post by **llebmj** » Thu May 21, 2015 1:53 pm

Having reread the form, one of the exceptions is that you need to have certified on 8854 about your past taxes, in order to be exempt from 8854. Ridiculous :shock:

OK, so assume I do need to file 8854....why on earth do they need the whole part V bit with all the gain calculations? Seems a complete waste to me.

MGeorge · Post by **MGeorge** » Thu May 21, 2015 2:51 pm

I think the purpose of the "dual citizen at birth" exemption is to allow someone to be treated as not-covered expat even if his/her network worth exceeds 2M or the tax liability limit. In other words, someone who would ordinarily be a covered expat will be relieved of the exit tax if he/she was dual at birth. In the case of llebmj, the dual citizen at birth wouldn't matter has he/she isn't covered to begin with.

I believe form 8854 is required either way.

nelsona · Post by **nelsona** » Thu May 21, 2015 2:56 pm

Yup, so that Who must file section is hokum.

rafa02 · Post by **rafa02** » Thu May 21, 2015 3:06 pm

I agree llebmj, it does seem to be a waste of time, if in fact part V is required. The frightening part is that if this is not performed accurately and on time, the individual automatically becomes a CE.

From time to time, I think about a website I came accross and their motto was: "We are here for you, because no citizen is safe while Congress is in session."