15 – US Expatriation Checklist for Form 8854

Form 8854 is a document that you must submit to the U.S. tax authorities in the year that you give up your U.S. citizenship or lawful permanent residency. It applies in all cases to expatriating U.S. citizens, but only applies to long-term lawful permanent residents. Long-term lawful permanent residents are those who have had a green card for 8 or more years during the last 15 years.

The purpose of Form 8854 is to inform the IRS about your financial situation at the time of your departure from the U.S. The IRS will use this information to determine if you are a “covered

expatriate”, which means that you will have to pay tax on your net worth as if you sold all your assets on the day of your departure. You will need to provide a net worth statement that shows all your assets and liabilities and their values on that date.

It is very important that you prepare this form carefully and accurately. A correct net worth statement is essential for determining your “covered expatriate” status and for completing Form 8854 properly. If you make any errors or omissions on this form, you may face severe penalties from the IRS.