The Covered Expatriate And The Five Year Tax Certification Test - Compliance, At What Point In Time?

January 10, 2022 - Participants Include:

 

Virginia La Torre Jeker - @VLJeker

 

John Richardson - @Expatriationlaw

 

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The Issue:

Is the expatriate required to certify that he is in compliance at the moment of expatriation? Can compliance problems be fixed after expatriation?

 

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Who Is A Covered Expatriate? - The Statute

 

The Covered Expatriate - IRC 877(a)(2)

 

(2)Individuals subject to this section This section shall apply to any individual if—

(A)

the average annual net income tax (as defined in section 38(c)(1)) of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $124,000,

(B)

the net worth of the individual as of such date is $2,000,000 or more, or

(C)

such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require.

 

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Our Conclusion:

 

In this podcast Virginia La Torre Jeker and John Richardson discuss why they believe that compliance at the point of expatriation is a sufficient but not a necessary condition to avoid covered expatriate status.