A CPA friend of mine send me this email — about the whole “how can you expatriate easily when you do not have a Social Security Number?” question.
I have dealt with 2 different clients that surrendered their passports at US Embassy, one in Madrid and another in Paris. In both cases, no SS# and in both cases, their W-7 was rejected. Also, in both cases, IRS issued multiple temporary ID’s (coincidence???) It’s the most MAJOR headache EVER! And, the IRS adjusted the tax liability because no personal exemption is allowed due to no SS#. (So you have to somehow “trick” Lacerte into it)
The SS# should be in place BEFORE their citizenship is given up.
I, personally, will never take on one of those clients. No amount of money can compensate me (or you) for numerous letters and calls to the IRS to try to fix everything. IRS just does not have a mechanism in place to deal with US people who expatriate.
And for sure there is no way to deal with this issue of no SS# if you are, for example, trying to file under the Streamline Procedures.
Phil Hodgen
Philip D. W. Hodgen is the principal attorney of HodgenLaw PC, an international tax law firm based in Pasadena, California. He earned his undergraduate degree from Claremont McKenna College and his law degree from the School of Law at the University of California, Los Angeles. He then went on to earn a Master of Laws degree with a specialty in taxation from the University of San Diego School of Law. Admitted to the California bar in 1982, Phil spent nine years in law firms and with a large U.S. bank before starting his own firm in 1991.
Phil is a past chair of the International Tax Committee of the State Bar of California's Tax Section and was a member of the Executive Committee of the State Bar of California's Tax Section for 2004-2007. Phil frequently speaks on a variety of international tax, trust and estate topics to attorneys, accountants, and real estate professionals.
“Expatriate” to the U.S. tax authorities means someone who: relinquishes his/her U.S. citizenship; or cancels his/her U.S. permanent residency (AKA “green card”) status, where U.S. residency has continued for at least 8 years. We help people expatriate — we handle their wranglings with the State Department and the Internal Revenue Service. So I watch for…
We’re working on a rash of cases in which people are giving up their permanent resident visas or U.S. citizenship — expatriation cases. Expect a few blog posts along the way. Key resource for you Here’s a link to the IRS website and Notice 2009-85. This notice was published in October, 2009 and is the…
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We do nothing but international tax stuff. On the outbound side (U.S. humans and companies doing business outside the USA) we have a steady flow of questions about the foreign earned income exclusion. The Federal government has just done a review of tax returns claiming the foreign earned income exclusion and has found (shocking, I…
People who give up their U.S. citizenship or their green card visas are subjected to the exit tax. This is imposed under Section 877A of the Internal Revenue Code. The exit tax treats you as having sold all of your assets on the day before you gave up your citizenship or your green card. If…
Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.
