Tag Archives: Sec. 877A Exit Tax

Considering renouncing citizenship? #citizide: Non-citizens can be be inadmissible to the United States by statute

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Only U.S. Citizens The right to enter the United States


U.S. citizenship has its privileges and its obligations
Privileges:
As the message in the above tweet indicates, ONLY U.S. citizens have the right to enter the United States.
Obligations:
Because U.S. citizens have the right to enter the United States, U.S. citizens are required to enter the United States on a U.S. passport. (The U.S. passport tells the border guard that the individual has the right to enter the United States.) The Immigration and Nationality Act states:

(b)Citizens
Except as otherwise provided by the President and subject to such limitations and exceptions as the President may authorize and prescribe, it shall be unlawful for any citizen of the United States to depart from or enter, or attempt to depart from or enter, the United States unless he bears a valid United States passport.

The border guard does not have the authority to deny entry to a U.S. citizen.
Non-citizens and admission to the United States – Tell me who you are and I will tell you whether you can enter
Non-citizens do NOT have the right to enter the United States. For non-citizens, entry into the United States is governed by the Immigration and Nationality Act and an apparatus of rules and regulations. Different rules and regulations apply to citizens of different countries. When you cease to be a U.S. citizen, you will be treated according to your citizenship/nationality.
Let’s consider four categories of individuals.
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Green Card holders who have moved from the United States without properly severing US tax residency

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Here is the scenario that this post is addressing:
An individual becomes a permanent resident of the United States (meaning that he has a Green Card). He lives in the United States for any number of years. He then moves away from the United States and returns to live in his home country. He is NOT aware that he must complete any specific steps (from either an immigration or tax perspective) to sever his ties with the United States.
He simply moves from the United States with the intention of no longer living permanently in the United States and:
1. Stops filing U.S. tax returns;
2. Fails to notify the State Department that he is abandoning his U.S. permanent residence.
While a resident of the United States he acquired significant pensions and IRAs.
Years later he reads an article in a newspaper that suggests that the United States still considers him to be subject to the full force of U.S. tax laws. Accessing the pensions will force him to file U.S. tax returns. He (as might be expected) is panic stricken and wonders what to do.
This is a very common scenario – what should he do?
The short answer is: it is completely dependent on the facts. This is one of the most difficult areas to advise in. The problem is that the person is likely to continue to be a tax resident of the United States and subject to all of the requirements of the Internal Revenue Code. The most appropriate response to this will depend on the interaction of a number of factors specific to the individual.
If you are in this situation, I suggest that you seek competent assistance sooner rather than later.
John Richardson – Follow me on Twitter @ExpatriationLaw