Instructions for IRS Form 8854
General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Purpose of Form
Use Form 8854, if you expatriate, to provide the information required by section 6039G.
Expatriation
For purposes of this form, expatriation is ceasing to be a U.S. citizen or U.S. long-term resident.
Generally, you must continue to pay U.S. income tax, as if expatriation did not occur, for 10 years after expatriation unless you did not have tax avoidance as one of your principal purposes of expatriating. Generally, you will be treated as having a principal purpose of tax avoidance if your answer to question 8 or 9 in Part I, is Yes. However, you will not be presumed to have a principal purpose of tax avoidance if you submit a ruling request to the IRS to determine whether tax avoidance is a principal purpose of your expatriation. See the instructions for Part I, line 10, to see if you are eligible to submit a ruling request.
Additional Information
See the instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return, Notice 97-19, 1997-1 C.B. 394, and Notice 98-34, 1998-2 C.B. 29.
Who Must File
Note: If you have already filed an information statement in accordance with section IX of Notice 97-19, you are not required to file Form 8854.
Former U.S. Citizens
You must file Form 8854 if any of the following occurs.
- You renounce your U.S. citizenship before a diplomatic or consular officer of the United States,
- You furnish to the U.S. Department of State a signed statement of voluntary relinquishment of U.S. nationality confirming an act of expatriation,
- The U.S. Department of State issues you a certificate of loss of U.S. nationality, or
- A U.S. Federal Court cancels your certificate of naturalization.
Former U.S. Long-Term Residents (LTRs)
You must file Form 8854 if you become a former U.S. LTR. You are a former U.S. LTR if you were not a U.S. citizen but were a lawful permanent resident of the United States (i.e., you had a green card) for at least 8 of the 15 consecutive tax years ending with the year you ceased to be a U.S. resident. Do not count as a year of residence any year that you were treated as a resident of another country under a tax treaty and did not waive treaty benefits.
When To File
Note: File Form 8854 only once.
Former U.S. Citizens
You are required to file Form 8854 no later than the earliest date that any of the events listed under Who Must File occurs.
Former U.S. LTRs
You are required to file Form 8854 by the due date (including extensions) of your dual-status income tax return for the year you expatriate.
Where To File
Former U.S. Citizens
You must file Form 8854 with the American Citizens Services Unit, Consular Section, of the nearest American Embassy or consulate. However, if you are filing Form 8854 because a U.S. Federal Court canceled your certificate of naturalization, file Form 8854 with that court.
Former U.S. LTRs
You must attach Form 8854 to your dual-status income tax return for the year in which you ceased to be a U.S. resident. If you have already filed that return, file Form 8854 by itself at the address where you filed the return. For information on dual-status returns, see the instructions for Form 1040NR.
Penalty for Failure To Furnish Information
You may be assessed a penalty for each year of the 10-year period beginning on the date of expatriation that you have not yet filed Form 8854. For each of those years, the penalty is the greater of:
- $1,000 or
- Five percent of the tax required to be paid under section 877 for that
year.
If you can show that your failure to file was due to reasonable cause and not willful neglect, the penalty will not be imposed.
Specific Instructions
Telephone Number
Enter the complete telephone number, including the country and area codes, at which you can be reached.
Identifying Number
Generally, this number is your U.S. social security number (SSN). An incorrect or missing identifying number may result in additional correspondence.
Part I - General Information
Line 1 - Date of Expatriation
Former U.S. Citizens
If you are a former U.S. citizen, the date of your expatriation is either the date that your certificate of naturalization was canceled by a Federal court or the date that you, with the intention of relinquishing your citizenship, voluntarily took one of several actions. These actions include:
- Obtaining naturalization in a foreign state,
- Taking an oath, affirmation, or other formal declaration of allegiance to a foreign state,
- Entering or serving in the armed forces of a foreign state engaged in hostilities against the United States, or serving as a commissioned or noncommissioned officer in the armed forces of a foreign state,
- Accepting employment with a foreign government if a declaration of allegiance is required in accepting the position or if you have the nationality of that foreign state, or
- Making a formal renunciation of nationality before a diplomatic or consular officer of the United States in a foreign state.
For more information about voluntarily relinquishing U.S. citizenship, see 8 United States Code section 1481.
Former U.S. LTRs
If you are a former U.S. LTR, the date of your expatriation is the earliest of:
- The date your green card was rescinded by the Immigration and Naturalization Service (INS).
- The date your green card was administratively or judicially determined to have been abandoned. (If you filed Form I-407, Abandonment of Lawful Permanent Resident Status, with the INS, the date of the abandonment of your green card is on line 6(c) of that form.)
- The first day of the tax year for which you began to be treated as a foreign resident under the provisions of an income tax treaty and do not waive the benefits of the treaty.
Lines 3 Through 5
P.O. Box
If you have a P.O. box, enter your box number instead of your street address only if your post office does not deliver mail to the street address.
Foreign Address
Enter the information in the following order: street address, city, province or state, and country. Follow the country's practice for entering the postal code. Do not abbreviate the country name.
Line 6, Column (b)
Show how you became a citizen. For example, if you acquired citizenship at birth, write At Birth. If you acquired citizenship through naturalization, write Naturalized Citizen.
Line 7
List the number of days you were physically present in the United States (including vacation and nonworkdays) in the tax year you expatriated and in each of the 2 tax years prior to expatriation.
Line 10
Certain former U.S. citizens and former U.S. LTRs can request a ruling that the avoidance of U.S. taxes was not a principal purpose of their expatriation.
If you are a former U.S. citizen, you are generally eligible to request a ruling (within 1 year after the loss of U.S. citizenship) if:
- You were a citizen of both the United States and a foreign country at birth and you maintained the foreign country citizenship after you expatriated or
- You are (or become) a citizen of the country where (a) you were born, (b) one of your parents was born, or (c) your spouse was born.
If you are a former U.S. LTR, you are generally eligible to request a ruling if you are (or become) a resident fully liable for income tax in the country where (a) you were born, (b) one of your parents was born, or (c) your spouse was born. For this purpose, a resident who is not domiciled in a country is not considered a resident fully liable for income tax in that country if his or her income is subject to tax in a different manner than the income of a resident who is domiciled in the country.
In addition, a former U.S. citizen or former U.S. LTR who spent 30 days or
less in the United States during each year of the 10-year period prior to
expatriation or expatriated before reaching age 18 Be sure to take into account the collective fair market value of all
your assets, not your net worth. If the collective value exceeds
$500,000, you must complete Part II of Form 8854.
Form 8854 is not considered valid unless you sign it. If you have someone
else prepare Form 8854, you are still responsible for its correctness.
Paid preparers. Generally, anyone you pay to prepare Form
8854 must sign it by hand in the space provided. Signature stamps or labels
cannot be used. The preparer must give you a copy for your records. Someone who
prepares Form 8854 but does not charge you should not sign it.
If you answered Yes to question 11 on the front of Form 8854, you
must list your assets and liabilities (in U.S. dollars) immediately prior to
your expatriation.
Note: If there have been significant changes in your
assets and liabilities for the period that began 5 years prior to expatriation
and ended on the date that you file Form 8854, you must attach a statement
explaining the changes. Also, attach a similar statement if you expect
significant changes in the 10-year period after expatriation.
List the fair market value of each class of assets and your U.S. adjusted
basis in the class of assets. You may use good faith estimates of fair market
value and basis (formal appraisals are not required).
Subtract the amounts in column (b) from the amounts in column (a) to show the
gain or (loss) in column (c). Enter negative amounts in parentheses.
If you are a former U.S. LTR, it may benefit you to complete column (d). For
more details, see section 877(e)(3)(B). Only former U.S. LTRs should
complete column (d).
Enter in column (d) the fair market value of each asset on the date you first
became a U.S. resident for tax purposes.
Note: The date you first became a U.S. resident for
tax purposes is not always the same as the date you first became a U.S.
lawful permanent resident. For details on U.S. residency (including the
substantial presence test), see Pub. 519, U.S. Tax Guide for Aliens.
List the total value of all your partnership interests. If you hold an
interest in one or more partnerships, you must attach a statement to Form 8854
that lists each partnership separately. Include the employer identification
number (EIN), if any, for each partnership. Describe the assets and liabilities
of each partnership (using the categories on the balance sheet on page 2 of Form
8854) attributable to your interest in the partnership.
List the total value of all assets held by trusts that, for tax purposes, you
are considered to own. You must attach a statement to Form 8854 that lists each
trust separately. Include the EIN (if any) for each trust. Describe the assets
and liabilities of each trust (using the categories on the balance sheet on page
2 of Form 8854) attributable to your interest in the trust.
Note: To determine if you are an owner of a trust, see
sections 671 through 679.
List the total value of all assets held by nongrantor trusts in which you are
considered to have a beneficial interest. You must attach a statement to Form
8854 that lists each trust separately. Include the EIN (if any) for each trust.
Describe the assets and liabilities of each trust (using the categories on the
balance sheet on page 2 of Form 8854) attributable to your interest in the
trust.
Note: To determine if you are a beneficiary of a
nongrantor trust, you must allocate the property interests of the trust based on
all relevant facts and circumstances. To determine the value of your beneficial
interest, use the valuation principles under section 2512. See section III of
Notice 97-19 for examples of how the property interests of a nongrantor trust
should be allocated to the beneficiaries of the trust.
Intangible property includes any of the following items that have substantial
value independent of the services of any individual.
Attach a statement describing and listing the total value of any other assets
you have that are not included on lines 1 through 18.
Attach a statement describing and listing the total value of any other
liabilities you have that are not included on lines 21 and 22.
Line 11
Signature
Part II - Balance Sheet
Columns (a) and (b)
Column (c)
Column (d)
Line 8
Line 9
Line 10
Lines 11 and 12
Line 19
Line 23
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