The Proposed “Ex-PATRIOT Act”
In 2012, Senators Charles Schumer and Bob Casey introduced the “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act” (Ex-PATRIOT Act). This proposed legislation aimed to retroactively “punish” wealthy expatriates who had renounced their US citizenship.
The key provisions of the Ex-PATRIOT Act included:
- Forbidding covered expatriates from ever re-entering the United States.
- Imposing a 30% tax on future gains from US investments for these individuals.
- Applying these punitive measures retroactively to those who had expatriated in the 10 years prior to the law’s enactment.
Unclear Status of Green Card Holders. While the bill was drafted to target former US citizens, it also referenced existing laws that apply to long-term US residents (LTRs). This includes individuals who have held green cards for at least 8 of the last 15 years. The status of these LTRs under the proposed Ex-PATRIOT Act was left unclear.
Potential Exemptions. The bill did include a potential exemption for expatriates who could prove to the US Treasury that their loss of citizenship did not result in substantial tax reduction. This would likely require them to demonstrate that they pay 90% or more of their previous US tax burden to a foreign government.
The Ex-PATRIOT Act did not become law in 2012.
Are You A Good Candidate for Expatriation
To expatriate is a big decision. One that has implications far beyond possibly paying an “exit tax” upon your permanent departure.
Expatriation means, for example, that you no longer have the automatic right to enter or live in the United States. You’ll need to get a visa to do so, unless your non-US passport qualifies you for visa-free entry.
Before making this decision, review several key factors to ensure it’s the right choice for you.
You can find more information here: Are you a good candidate for expatriation?
What It’s Really Like to Expatriate
The actual process of expatriation isn’t as arduous as you might think.
You’re likely to encounter bureaucratic incompetence and unexplained delays. But giving up your US nationality is a legal right.
You can read a case study here: What it’s really like to expatriate.
How to Get a Second Passport: 7 Legal Ways
Thinking about a second passport? There are just seven official (legal) ways to get one. Find out which one is the best option for you: How to get a second passport.
Need Help?
We can assist in every phase of giving up your US citizenship or long-term residence. This includes helping you get a second passport before giving up US citizenship.
And if you’re not ready to expatriate, we can help you take advantage of tax breaks in the Tax Code that apply to US citizens and permanent residents living overseas.
Schedule a free no-obligation consultation with a Nestmann Associate to see if expatriation is right for you.
