This alert covers the expatriate transitional rules for Form 8854, Initial and Annual Expatriation Information Statement. Although the deadline for the transition relief was June 15, 2005, the alert provides valuable information.
New Transition Rules for Expatriation Reporting Requirements
Need to File by June 15, 2005
IRS and Treasury have provided transition/implementation guidance in IR-2005-49 and Notice 2005-36; 2005-19 IRB 1, regarding the revised Form 8854, Initial and Annual Expatriation Information Statement, filing requirements which include the American Jobs Creation Act of 2004 (AJCA) tax and reporting changes for individuals who lose their U.S. citizenship or long-term resident status after June 3, 2004. IR-2005-49, Notice 2005-36, the revised Form 8854 and the Form 8854 instructions can be found on the IRS Web site.
Notice 2005-36 provides special rules for individuals who file the revised Form 8854 by June 15, 2005. Treasury and the IRS recognized in this recent guidance that until the revised Form 8854 was released, individuals who lost U.S. citizenship or terminated long-term resident status after June 3, 2004 did not know how to meet the new notification and information reporting requirements imposed by AJCA.
Accordingly, Notice 2005-36 provides that if an individual who loses U.S. citizenship or terminates long-term resident status after June 3, 2004 files the revised Form 8854 by June 15, 2005, the individual will be treated as having met his or her reporting obligations on the date on which the taxpayer provided the required notice to the Department of State or the Department of Homeland Security.
The new Form 8854 has been expanded so that it functions as both the initial and the annual expatriation information statements required by AJCA for former citizens and long-term residents. Form 8854 and its instructions are available at the agency Web site, but will no longer be obtainable from U.S. embassies or consulates abroad. If overseas, individuals may contact the IRS at (215) 516-2000.
In addition, an AICPA summary of the important new form changes (along with the new form and instructions) are available on this site. The AICPA Tax Division's Expat Task Force is also developing a detailed analysis of the new law changes that should be available to members by the summer.