Expatriates must file Form 8854 to comply with their initial and annual information reporting obligations and taxation requirements when relinquishing or terminating their U.S. citizenship or residency on or after June 17, 2008. This article outlines the requirements for filing the form, when expatriation applies, and who must file, as well as penalties for filing incorrectly.
What is Form 8854?
Form 8854 is an important filing requirement for U.S. citizens and long-term residents who have relinquished their citizenship or ended their residency on or after June 17, 2008. The form serves to certify compliance with tax obligations in the 5 years before expatriation and to comply with their initial and annual information reporting obligations under section 6039G. The form must be filed by all individuals who meet the criteria of the who must file section, including those who have deferred the payment of tax, those with eligible deferred compensation, and those who are beneficiaries of nongrantor trusts. Expatriation includes the acts of relinquishing U.S. citizenship and terminating long-term residence. Additionally, individuals who expatriated for immigration purposes between June 3, 2004, and June 17, 2008 may also be required to file the form. Penalties may be applied if the form is not completed correctly or not included as required.
IRS Form 8854 – Who Needs to Fill It Out?
Individuals required to fill out IRS Form 8854 are U.S. citizens who have relinquished their citizenship and long-term residents who have ended their residency on or after June 17, 2008. Those who have expatriated for immigration purposes after June 3, 2004, and before June 17, 2008, need to file a Form 8854 in order to avoid continuing to be treated as U.S. citizens or U.S. lawful permanent residents for U.S. income tax purposes. Additionally, persons who expatriated before June 17, 2008, and have previously filed a Form 8854, as well as persons who expatriated in 2022, need to file their initial or annual expatriation statements via this form. Failure to do so may result in a penalty of $10,000, unless it is shown that such failure was due to reasonable cause.
Step-by-Step: Form 8854 Instructions For Filling Out the Document
Filling out Form 8854 for section 877A is a multi-step process that requires individuals to provide information about their expatriation and their tax obligations in the 5 years before expatriation. For U.S. citizens who have relinquished their citizenship and long-term residents who have ended their residency after June 17, 2008, Form 8854 is used to certify compliance with tax obligations and to comply with their initial and annual information reporting obligations. Individuals must file their initial Form 8854 if they relinquished their U.S. citizenship in 2022 or ended their residency. They must also file an annual Form 8854 if they have deferred the payment of tax, have an eligible deferred compensation item, or are a beneficiary of a nongrantor trust. Penalties may be applied if the form is not properly filled out or if incorrect information is provided.
Below, we present a table that will help you understand how to fill out Form 8854.
| Form Name | Information Required | Details |
|---|---|---|
| Form 8854 | Filling out Form 8854 | A multi-step process for individuals to provide information about their expatriation and tax obligations in the 5 years before expatriation. Used for U.S. citizens who have relinquished their citizenship and long-term residents who have ended their residency after June 17, 2008. |
| Form 8865 | Filling out Form 8865 | Used to report information concerning controlled foreign partnerships, transfers to foreign partnerships, acquisitions, dispositions, and changes in foreign partnership interests for U.S. persons. |
Do You Need to File Form 8854 Each Year?
Yes, you need to file Form 8854 if you expatriated in 2022 or before. Generally, after expatriation, you must file an initial Form 8854 (Parts I and II) and an annual Form 8854 (Parts I and III) for a period of five years in order to certify compliance with tax obligations and comply with their initial and annual information reporting obligations under section 6039G. Depending on your expatriation date, you may additionally need to file an annual Form 8854 for the years after the five-year initial period. Failure to do so may result in a penalty of $10,000, unless it can be proved that the failure is due to reasonable cause and not willful neglect.
Download the official IRS Form 8854 PDF
On the official IRS website, you will find a link to download Form 8854. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download Form 8854
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