Long-term permanent residents who abandon that status file the statement, not only citizens who renounce. The form is where you certify your tax compliance and work out the mark-to-market consequences of leaving the US tax system. People are caught out in both directions: someone who never held a US passport assumes the expatriation rules are not theirs, and someone who handed a card back years ago assumes the matter closed itself. The status you gave up, and how long you held it, decide whether the statement is due.
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Individuals who relinquish US citizenship, and long-term green-card holders who abandon permanent residence. The obligation is decided by facts rather than by tax owing, which is why a nil position does not remove it.
The rule on who files
Individuals who relinquish US citizenship, and long-term green-card holders who abandon permanent residence.

The carve-out
Covered-expatriate status turns on three separate tests — an income test, a net-worth test and a compliance certification — and failing any one of them is enough. Sequencing the departure and the final filings is the difference between an exit and an exit tax.
How to get this moving
The full treatment — who it binds, the deadline, the penalty and the fixed fee — is on 8854 — expatriation statement, the US exit tax. One call now is worth more than a filing season of guessing.
Reviewed for the 2025 and 2026 filing seasons by Udit Gupta, International Tax, Cross-Border Tax & Transfer Pricing Expert, Legal Quotient Consultants. General information, not advice for your circumstances — call our 24-hour helpline to discuss your own position.
Cross-border tax case studies
Long term permanent resident who handed back a card without filing
A client had returned his green card at a consulate and treated the matter as finished. The tax step had not been taken. We established the date the status actually ended from the consular paperwork, reviewed the years before it for anything outstanding, and prepared the expatriation statement on that footing. The engagement produced a filed statement with the certification made on a reviewed record, and a written note of the date and the documents supporting it, which is what any later enquiry will turn on.
Read how this one runsRenunciation sequenced so the certification could actually be made
A citizen abroad asked us to look at expatriation before booking the consular appointment. Two of the preceding years had been filed late and one not at all. We completed the outstanding returns first, in order, and only then prepared the expatriation statement, so the certification was a statement of fact rather than a hope. What the engagement produced was a clean set of filings for the years in question and a statement filed with the compliance test met on its own terms.
Read how this one runsPrivate company shares valued for the mark to market computation
A client's balance sheet was mostly an interest in a company she had built, and no recent valuation existed. We scoped the valuation work, fixed the date it had to be measured at, and had the shareholding valued on a documented basis before the expatriating act rather than after it. The engagement produced a valuation report and a mark-to-market computation resting on it, so the figure in the statement could be traced to an appraisal instead of an estimate made under deadline.
Read how this one runsClient who met no financial test but could not certify compliance
A teacher with modest savings assumed the expatriation rules were for wealthy people. Neither financial test came close. An unfiled year inside the period covered by the certification, however, was enough on its own to make her a covered expatriate. We filed the missing year, waited until it had been taken up, and then prepared the statement. The engagement produced a certification that could be made honestly and a written chronology showing the order in which the filings had been completed.
Read how this one runsDual citizen who had to pin down the date status ended
A client believed she had lost her citizenship decades earlier through an act she could barely remember. The date matters, because it decides which expatriation rules apply at all. We worked from the consular record and the immigration file rather than recollection, established when the status actually ended, and set the position out in writing. The engagement produced a documented expatriation date, a conclusion on which regime it fell under, and a filing plan that followed from the answer instead of assuming one.
Read how this one runsCouple expatriating in different years filed on separate footings
Two spouses were leaving the US tax system on separate timetables, and their joint filings made the second departure harder to describe than the first. We separated the two positions, established each spouse's own expatriation date, and prepared each statement on its own facts while keeping the joint years consistent between them. What the engagement produced was two filed statements that agreed with each other and with the returns behind them, rather than one couple's paperwork reused twice.
Read how this one runsA Home Kept in Canada After the Move Abroad
A dwelling left available is the tie the CRA weighs most heavily, and its treatment differs depending on whether it is rented at arm's length. The file settles the residence position first and the rental reporting second.
Read how this one runsPaying a Beneficiary Who Lives Abroad
Distributions to a non-resident beneficiary carry withholding and a designation that decides its rate. Getting the designation right before the payment avoids recovering the difference through a return afterwards.
Read how this one runsAll case studies — every published engagement in one place.
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Also asked about Form 8854
Three separate tests, and failing any single one is enough. There is an income test, which for the 2025 tax year is an average annual net income tax above US$206,000. There is a net-worth test of US$2 million which, unlike the income test, is not adjusted for inflation. And there is a certification: you must certify on the form that you have complied with all federal tax obligations for the five tax years preceding expatriation. Meeting two of the three comfortably does not help if the third one catches you, and the certification is the one that catches people with modest finances.
Yes. The statement is where compliance is certified, and a certification cannot be made by staying silent. Owing nothing is a fact about your tax position; it is not a substitute for the document that says your filings are in order. This is the part of expatriation that most often goes wrong, because the consular or immigration step feels like the end of the process and the tax step comes afterwards, in a year when there is no tax bill to prompt anybody.
Only covered expatriates face the mark-to-market computation, and it does not reach every dollar of accrued gain. For the 2025 tax year the net unrealised gain exclusion is US$890,000, so the computation runs on the excess above that figure rather than on the whole. The real work is in the valuations feeding it: private company shares, an interest in a family business, property held for years without a recent appraisal. Those are the numbers that decide the result, and they need support before the date rather than after it.
The current regime applies to expatriations after 16 June 2008, so the date you gave up citizenship or permanent residence decides which rules you are looking at. That date is also the one most often remembered wrongly, because the expatriating act and the paperwork confirming it can sit in different years. We start by pinning the date down from the documents rather than from memory, and the analysis follows from it.
Not on net worth alone. The three tests are alternatives rather than a combined score, so a person well under the US$2 million net-worth threshold for the 2025 tax year, and well under the income test, can still be a covered expatriate for failing to certify compliance for the five tax years preceding expatriation. In practice that is the common route into covered status: not wealth, but an unfiled year somewhere in the five, found after the expatriating act has already happened. Sequencing the filings before the departure is what keeps that door shut.
How much it is depends on your unrealised gains rather than on a rate, because it is the expatriation regime rather than a fee. A citizen who gives up citizenship, or a long-term permanent resident whose status ends, is tested against three conditions; meet any one and you are a covered expatriate, treated as having sold your worldwide assets the day before you left, with an exclusion for a slice of the resulting net gain — $890,000 for 2025. Deferred compensation, retirement accounts and interests in trusts are handled under separate rules rather than the deemed sale. Form 8854 reports it. See Form 8854.
The question comes from the filing-status screens, and it is asking whether your spouse was a non-resident or part-year resident for the year — because if they were, a joint return is not available by default. An election exists to treat a non-resident spouse as a resident for the whole year, which unlocks joint filing at the price of bringing their worldwide income into the US return and their accounts into its reporting. See a US person with a non-resident spouse.



