IRS Introduces Relief Procedures for Former U.S. Citizens: Path to Avoid the Exit Tax, Income Taxes, and Penalties Despite Past Non-Compliance

 


The IRS has implemented numerous voluntary disclosure programs over the past decade for taxpayers with international tax non-compliance. Opinions vary, of course, but many taxpayers and practitioners considered the penalties imposed under such programs fairly harsh. The IRS has softened its stance considerably with the introduction of its newest program in September 2019, called Relief Procedures for Certain Former Citizens (“RPCFC”). It is designed to benefit taxpayers who were formerly U.S. citizens, have already expatriated, had little to no U.S. income tax liability in the years preceding expatriation, were not filing U.S. tax or information returns with the IRS before expatriating, did not pay the “exit tax” under Code Sec. 877A, and would not have been subject to the exit tax were it not for their non-willful violations.

This article explains the general tax and information-reporting duties for U.S. taxpayers with international connections, the application of the exit tax, the details about the new RPCFC, and interesting issues triggered by the RPCFC that are likely unknown to many taxpayers.

Read the full article here.

About Hale E. Sheppard

HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.

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