Comments on: Confrontation with bureaucracy, part 3

By: Steve Miller

Steve Miller — Wed, 30 Sep 2009 08:34:41 +0000

So that means a Form 8854 does not have to be filed?

If is isn’t, then 877A is applicable, which does not mean anything unless one has net assets over $600,000.

Is that correct?

By: AJ Valleron

AJ Valleron — Thu, 10 Sep 2009 22:06:28 +0000

OK, if you ticked No, then you’re in 877A (the Exit Tax). That won’t mean anything unless you have large unrealised gains (over US$600,000). If you don’t have that, it won’t make any difference.

By: Mike Gogulski

Mike Gogulski — Wed, 09 Sep 2009 22:44:16 +0000

Note the possible exception, though. I checked “no” on a question of the form “do you swear you’ve complied with all your US tax obligations for the past five years”. There was a notation saying that unless that response was “yes”, I fall under 877.

By: AJ Valleron

AJ Valleron — Wed, 09 Sep 2009 22:42:07 +0000

Actually, the new law of 877A is better if you don’t want to file the Form 8854. Your US tax obligation ended when you signed the Oath of Renunication. This was your last day as a “US Person” (US tax resident).

Under the old 877 rules, if you DIDN’T file the 8854 your US taxation would continue to run forever. No matter for you of course because these rules don’t apply.

By: Mike Gogulski

Mike Gogulski — Wed, 09 Sep 2009 22:21:01 +0000

@AJ: Aha. Didn’t read it that way. Well, we’ll see in any case, because there’s approximately zero chance of my filing the bloody thing anyway.

By: AJ Valleron

AJ Valleron — Wed, 09 Sep 2009 22:19:54 +0000

Mike, you don’t have to file the Form 8854 for ten years. By the sounds of it, you expatriated after June 2008 and therefore only owe the IRS one 8854 (the first and the last). The ten-year shadow period is not applicable to you (section 877). Because you expatriated later than June 2008, you are subject to Section 877A. Even if 877 applied to you, your net assets must be over US$2m to have to file the Form 8854 for ten years.

By: Name1

Name1 — Sun, 14 Jun 2009 23:27:56 +0000

Maybe write an article or link to here if you have time:

http://www.escapefromamerica.com

By: Name1

Name1 — Sun, 14 Jun 2009 22:53:35 +0000

Did you receive any type of confirmation your Form 8854 was received and processed, ending your tax status?

By: Mike Gogulski

Mike Gogulski — Mon, 08 Dec 2008 16:06:34 +0000

@Kent: The possibility exists, however remote, that I might be found deportable under Slovak law. The target country for that deportation would be the US. Not a desirable outcome at this point.

@Peter: No, you heard him exactly right. The US is one of a vanishingly small number of nations (two?) which require citizens living abroad to file tax returns every year, and pay income tax if certain income thresholds are exceeded. Last I looked, you could earn up to around US$80,000 outside the US while on non-resident status, and have that amount exempt from taxation. Filing tax returns is still mandatory regardless. “Failure due to reasonable cause” might mean something like the taxpayer died, went insane, was imprisoned incommunicado, and so forth.

@Matt: The Embassy’s duties do not encompass providing tax advice, of course, so no, they didn’t explain it. What can they do? Dunno… arrest me at the port of entry on an outstanding warrant should I ever turn up on US soil? Black bag job? Let your imagination roam…

By: Mattocracy

Mattocracy — Mon, 08 Dec 2008 01:44:32 +0000

Divorces are expensive and it sounds like this bitch can take you to the cleaners for leaving her. They purposely made this scary catch 22 for a reason. You owe taxes, yet you aren’t a citizens, so technically you aren’t guaranteed the same rights. If you don’t comply for the next ten years, what can they do? Did they explain that at all?