Section 6039G and the quarterly list of expatriates

A recent comment asked a question that is worth answering here as a full blog post.  In the comment, the reader said:

You mention that “6039G is the infamous rule that triggers the quarterly publication of names of people who renounce U.S. citizenship”.Aha! So the numbers that are oft-mentioned, such as 1,001 in 2014 Q1, are really only the ***covered expatriates**? Then surely, there must be an even greater number who expatriate by renouncing, but are not covered (such as the dual-citizen foreign-residing teenager entrepreneur), or who are relinquishing.Is there any report or estimate of the number of people filing Form 8854 each year? Might the true number of people giving up US citizenship be hugely greater than is reported in the quarterly publication, perhaps more than 100,000 per year?

This is a really interesting question. What does Section 6039G really mean? Here is what the law says, at Section 6039G(a):

Notwithstanding any other provision of law, any individual to whom section 877(b) or 877A applies for any taxable year shall provide a statement for such taxable year which includes the information described in subsection (b).

So what does it mean to say you are an individual to whom Section 877A "applies"? Does it mean that Section 877A only applies to you if you must pay the exit tax imposed by Section 877A? If so, then Section 877A only applies to "covered expatriates" and if you are not a "covered expatriate" then we have an interesting possibility: Section 6039G doesn't apply to you because it is triggered only by Section 877A being applicable to you. I don't know the answer to that, but I suspect that the U.S. government would strongly argue to the contrary. The IRS eats paper and if they don't get all the paper in the world they get hungry and grumpy. :-)But I digress.The specific information-reporting requirement is found in the flush language at the end of Section 6039G(d):

Notwithstanding any other provision of law, not later than 30 days after the close of each calendar quarter, the Secretary shall publish in the Federal Register the name of each individual losing United States citizenship (within the meaning of section 877 (a) or 877A) with respect to whom the Secretary receives information under the preceding sentence during such quarter.

The "notwithstanding any other provision of law" language is the lazy Congressional staffer's preferred method of writing laws. "I am too lazy to go and look to see if what I am doing is in conflict with other provisions of the law, so I am just throwing down this card and declaring it to be the ace of trump." (Interesting question: what happens when two "notwithstanding any other provision of law" sentenced collide? Irresistible force meets immovable object. Let's leave that for law school professors. How many angels can dance on the head of a pin?)But I re-digress. Your question can be answered without medieval metaphysics.The reporting requirement simply says "look at all of the people who lost citizenship as defined in Section 877 and 877A and publish a list of them." It does not tie this reporting requirement to covered expatriate status.Presumably this also includes long-term residents who abandon their green cards. I will pull out the lazy blogger card and throw it down, declaring that I am too lazy to follow the logic trail in Section 877A that says "long-term residents giving up green cards are the same as U.S. citizens giving up citizenship." Yes, I self-declare as lazy. :-)I too have heard that the list published quarterly is woefully incomplete. Let us say this is true. What is the reason? I am inclined to follow Hanlon's Razor: "Never attribute to malice that which is adequately explained by stupidity." Bureaucracy is an exercise in subtractive intelligence. Two heads are not better than one for government work, because the brains involved are pulling in different directions.The IRS should be following the requirements of Section 6039G(d). It should be publishing an accurate quarterly list of people who relinquish U.S. citizenship or who abandon their long-term resident status.Invoking Hanlon's Razor, we can explain possible ahem discontinuities in the quarterly expatriate list reporting by the failures of bureaucracy.Or, invoking Robert Heinlein's variant -- "Never attribute to malice that which can be adequately explained by stupidity, but don't rule out malice" -- we might take a look at the Lois Lerner show. And how the IRS has had stunningly convenient and well-targeted IT system failures to protect itself against claims that the Service has morphed into a political tool rather than the even-handed collector of tax revenue for the Federal Government that it once was.