For roughly two years, I have been publishing a graph of the number of expatriates listed in the Federal Register (see Expatriation). Earlier this year I was told that the individuals listed in the Federal Register generally only include individuals that meet the net worth test or the tax liability test under Code §877(a)(2).
I took a quick look at the statute, and I agreed. Therefore, I wrote a blog post “clarifying” the graph.
I recently decided to take a more detailed look at the rules when a reader of this blog informed me that his name was included in the Federal Register, even though he did not meet the net worth test or the tax liability test. It turns out that my “clarification” was wrong.
The Federal Register includes, and therefore the graph includes, all renouncing U.S. citizens and all individuals that have terminated their U.S. lawful permanent residency status for which the I.R.S. has received information from one or more of three different sources.
According to Code §6039G(d), the individuals listed in the Federal Register include:
“[E]ach individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the [I.R.S.] receives information under the preceding sentence * * *.”
In the “preceding sentence,” there are three sources from which the I.R.S. receives information.
With respect to the first source, “any Federal agency or court which collects (or is required to collect) the statement under subsection (a) shall provide to the [I.R.S.]” certain information. The statement under subsection (a) is only required for those individuals that meet the net worth test or the tax liability test (or that fail to certify they have met their U.S. tax filings for 5 preceding years).
If this first source were the only source from which the I.R.S. were to receive information about individuals expatriating, then the Federal Register would generally only include individuals that meet the net worth test or the tax liability test. However, there are two other sources from which the I.R.S. receives information about individuals expatriating.
The second source is from the Secretary of State, which is required to provide to the I.R.S. “a copy of each certificate as to the loss of American nationality under section 358 of the Immigration and Nationality Act which is approved by the Secretary of State.”
The third source is from “the Federal agency primarily responsible for administering the immigration laws,” which is required to provide to the I.R.S. “the name of each lawful permanent resident of the United States (within the meaning of section 7701(b)(6)) whose status as such has been revoked or has been administratively or judicially determined to have been abandoned.”
Thus, if the I.R.S. receives information about individuals from the Secretary of State about the loss of U.S. citizenship, or receives information about individuals from the Federal immigration agency about the revocation of lawful permanent residency status, then these individuals’ names will also be included in the Federal Register. The list in the Federal Register does not only include individuals that meet the net worth test or the tax liability test.
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