How it works
Anyone who renounces U.S. citizenship or terminates long-term residency files Form 8854 with their final return, certifying five years of tax compliance under penalty of perjury and reporting net worth and the deemed sale of assets if they are a covered expatriate. Failing to file, or failing to certify compliance, makes the individual a covered expatriate regardless of wealth and carries a 10,000 dollar penalty.
Why it matters
The form is the last U.S. filing for most expatriates and the one that determines whether the exit tax applies, so the five years of compliance should be confirmed before the appointment at the consulate.
Related: exit tax. Read more: the Form 8854 expatriation statement.
