Understanding US Expatriation | Castro & Co. [2024]

US expatriation is a complex process that involves renouncing one's citizenship or abandoning their green card status. This high-level overview aims to inform US citizens and green card holders about the key aspects of expatriation, including determining one's expatriation status, potential exceptions, and the significance of Form I-407.

What is Expatriation?

Expatriation refers to the voluntary act of giving up one's citizenship or abandoning their green card status. Individuals who choose this path are termed "expatriates." There are various reasons why someone might decide to expatriate, including personal, financial, or professional considerations. It is crucial to note that the decision to expatriate has significant legal and tax implications.

Am I a Covered Expatriate or Non-covered Expatriate?

Understanding whether you are a covered or non-covered expatriate is vital, as it determines the tax consequences of expatriation. A covered expatriate is an individual who meets any of the following criteria:

  • Has an average annual net income tax liability for the five years preceding expatriation that exceeds a specified threshold (adjusted annually for inflation).
  • Has a net worth of $2 million or more at the time of expatriation.
  • Fails to certify compliance with all U.S. federal tax obligations for the five years preceding expatriation.

If you meet any of these criteria, you are considered a covered expatriate, and certain tax implications come into play. On the other hand, if you do not meet any of the criteria, you are classified as a non-covered expatriate, subject to different tax treatment.

Exceptions to Covered Expatriate Status

While being a covered expatriate carries certain tax consequences, there are exceptions that may apply. Some of the exceptions include:

  1. Dual Citizenships: If you hold dual citizenship and are a citizen of your expatriated country, you may be exempt from covered expatriate status.
  1. Relinquishment Before 18 and a Half: Individuals expatriating before the age of 18 and a half may avoid covered expatriate status.
  1. Dual Status Taxpayer: If you have been a dual status taxpayer (both resident and non-resident) in the year before expatriation, you might be eligible for an exception.

It is crucial to consult with experienced tax attorneys, such as those at Castro & Co., to navigate these exceptions and understand their implications fully.

Form I-407: The Formal Renunciation Process

Form I-407 is the official document used to renounce one's green card voluntarily. Completing this form is a critical step in the expatriation process. It involves submitting a formal declaration to the United States Citizenship and Immigration Services (USCIS), expressing the intent to abandon permanent resident status.

The completion of Form I-407 signifies a commitment to sever ties with the United States for immigration purposes. However, it is important to note that the tax implications associated with expatriation are separate from the immigration process. Therefore, even after submitting Form I-407, individuals must address their tax obligations, considering whether they fall under covered or non-covered expatriate status.

Castro & Co.: Your Trusted Advisors in Expatriation

Navigating the intricacies of US expatriation requires expert guidance. Castro & Co., a team of experienced tax attorneys, is ready to assist clients in understanding the legal and tax implications associated with expatriation. With a deep understanding of the complex landscape of US tax laws, the professionals at Castro & Co. can provide tailored advice to ensure a smooth and informed expatriation process.


In conclusion, US expatriation is a significant decision that involves legal, tax, and immigration considerations. Determining whether you are a covered or non-covered expatriate, understanding potential exceptions, and completing the formal process through Form I-407 are crucial steps in the expatriation journey. Seeking guidance from seasoned tax attorneys, such as those at Castro & Co., is essential to navigating this complex terrain and ensuring compliance with all legal requirements. As you contemplate expatriation, remember that being well-informed is the key to making sound decisions for your future.

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Disclaimer: This article is intended for informational purposes only and does not constitute financial or tax advice. Readers are advised to consult with qualified tax professionals before making any financial decisions.

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