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August 26, 2015 - Phil Hodgen

Expatriation with no Social Security Number – another report from the trenches

A friend (Virginia Jeker, a U.S. tax lawyer practicing in Dubai) sent me this email with her ideas for how to deal with the problem of a would-be expatriate who has no Social Security Number. This was in response to the third episode of the Expatriation Chronicles.

Hi Phil – this was a great piece.  Your described situation:  T w/o a Social Security Number who never had a duty to file a US tax return (the young student type person, as in your example, who has had no income) – the individual must still file Form 8854 after expatriation to avoid ‘covered expatriate’ status.  I have 2 comments (for what they may be worth!!):

1) I noticed the instructions to Form 8854 (at page 4 underneath the chart in the far left column) indeed contemplate the case when a T would not have a SSN & say the T should attach a statement explaining why he has no SSN. Thus, I think this might be sufficient instead of getting a SSN beforehand or the ITIN later on.  What do you think of this possibility?

http://www.irs.gov/pub/irs-pdf/i8854.pdf

Identifying number. Generally, this number is your U.S. social security number. An incorrect or missing identifying number may result in a continued obligation to file U.S. tax returns as a citizen or resident of the United States for persons expatriating after June 3, 2004, and before June 17, 2008, and/or a penalty of $10,000. If you were never issued a social security number, please attach a statement explaining the reason.

2) Another possibility – IRS OVDP/Streamlined Hotline – I have been successful in getting them to issue a temporary IRS number if T has no SSN to be used on all returns etc. until the SSN is issued. This might be another possible way around the mess.

Thanks for the email, Virginia.

For the first point (looking at the instructions to Form 8854) I just have a profound fear of dropping a piece of paper into the Black Hole and hoping that it would be processed humanely. Ultimately, the IRS wants an ID number. I do not trust the system to arbitrarily assign a number when needed. My paranoia stops me from trying this.

For the second point (using the Streamlined Procedure/Hotline resources) this is good to know. I have not done this before.

Expatriation