Thanks to volunteer firefighters, wealthy Americans who give up their U.S. citizenship or long-term residence won't be subject to an exit tax—at least not this year.
In a blog entry earlier this week, I wrote that it seemed virtually certain that Congress would impose an exit tax on the unrealized gains of U.S. citizens and long-term permanent residents who expatriate. Although both houses of Congress have approved the measure, it's part of a larger bill for military tax relief (H.R. 3997). And, the Senate objected to the House version of that bill because it contains a US$565 million outlay for volunteer firefighters.
The happy result for prospective expatriates: the two chambers will now have to wait until next year to resolve their differences.
Despite the delay, it appears certain that 2008 will bring about an "exit tax" on expatriating Americans. If you're considering expatriation, you should start your planning immediately to avoid the impact of this tax.
Copyright © 2007 by Mark Nestmann
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