Only if you leave as a "covered expatriate". Renouncing citizenship, or abandoning a green card held in 8 of the last 15 years, is an expatriation for US tax purposes. The consulate or USCIS ends the status. Form 8854, filed with your final US return, settles the account with the IRS.
Who is a covered expatriate?
You are one if any of these is true:
- Your net worth is $2 million or more on the day you expatriate.
- Your average US income tax for the five prior years exceeds $211,000 (expatriations in 2026; $218,000 in 2027).
- You cannot certify, on Form 8854, five years of full US tax compliance.
The third test has nothing to do with wealth. Unfiled returns or missing foreign forms make you covered at any net worth.
What is the exit tax?
A covered expatriate is taxed as if everything they own was sold the day before leaving. The first $910,000 of gain is excluded ($940,000 in 2027). IRAs are treated as fully distributed that day. Pensions and trusts follow their own rules. Afterwards, Americans who receive gifts or bequests from a covered expatriate can owe 40% US tax on them.
Does giving up a green card count?
Yes, once you have held it in 8 of the last 15 years. Part-years count. You expatriate when you file Form I-407, or when you claim residence in another country under a tax treaty. A card that has simply expired changes nothing: you remain a US tax resident until the status is formally abandoned or taken away.
I am a dual citizen from birth. Am I exempt?
From the first two tests, usually: you must still be a citizen and tax resident of the other country, and have lived in the US for no more than 10 of the last 15 years. Never from the third. You still certify five years.
I never filed. Can I just renounce?
You can, but without five clean years you cannot certify, and you leave covered. If your net worth is under $2 million and your US tax for the period is $25,000 or less, the IRS Relief Procedures for Certain Former Citizens let you renounce first and file after, with no tax or penalties. Above those limits, check in before you check out:
- Check in. The Streamlined Foreign Offshore Procedures: three years of returns, six of FBARs, no penalties, usually no tax.
- Check out. Renounce, then file Form 8854 with five years in order.
Streamlined covers three years and the certification covers five, so the two earlier years must be in order too.
What do I file, and when?
A dual-status return for the year you leave, with Form 8854 attached, due the following spring. Failing to file Form 8854 carries a $10,000 penalty, and without it you have not certified.
What we do
The analysis is free. We test your net worth and tax history against the thresholds before you book the appointment, then prepare the five years, the dual-status return and Form 8854.