The “Plain Language” of the S. 877A Rules – To Whom does S. 877A apply? What is the “Relinquishment Date?
Synopsis:
Many Americans abroad are confused by the difference between “relinquishment” and “renunciation”. I recently wrote a post explaining that:
1. Renunciation is one form of “relinquishment”; and
2. The issue is the “relinquishment date” and not the form of “relinquishment”.
This post will explain exactly why the date of relinquishment matters.
To put it simply:
Those with a “Relinquishment Date” after June 16, 2008 may be subject to the confiscatory provisions of the S. 877A Exit Tax.
This post will make the argument that the “plain language” of the combined effects of S. 7701(a)(50) and S. 877A(g)(4) compel the conclusion that those with a “Relinquishment Date” prior to June 3, 2004 are NOT subject to the S. 877A Exit Tax.
My analysis follows.
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