What Is Expatriation? Process, Exit Tax, and Consequences

Expatriation is the voluntary, permanent surrender of U.S. citizenship. It is finalized in person at a U.S. embassy or consulate abroad, costs a non-refundable $2,350 administrative fee, and can trigger a significant exit tax depending on your income and net worth. Once complete, you lose the right to vote, hold a U.S. passport, and receive consular protection, and you are treated as a foreign national for every future interaction with the United States.

Who Can Expatriate

Federal law sets three conditions. You must be at least 18 years old to renounce on your own, because younger individuals lack the legal capacity to make so permanent a decision independently. The decision must be entirely voluntary, made without coercion. And you must have a specific intent to give up U.S. nationality, which is what separates someone who simply lives abroad from someone who wants to cut the legal tie.¹

The law presumes the act was voluntary unless you show otherwise. If voluntariness is later disputed, the party claiming the expatriation happened has to prove it.

Renunciation vs. Relinquishment

Federal law recognizes two routes, and the distinction shapes what you sign.

Renunciation is the common path. You appear before a consular officer outside the United States and take a formal oath giving up your nationality under INA Section 349(a)(5). It must be done in person; it cannot be handled by mail, email, or a representative.²

Relinquishment applies when you have already done something that qualifies as an expatriating act — becoming a naturalized citizen of another country, swearing allegiance to a foreign government, or serving in a foreign government position — and you did it intending to give up U.S. citizenship.¹ You still appear before a consular officer and complete forms, but you do not take the renunciation oath. Either route ends with the Department of State issuing a Certificate of Loss of Nationality.

The In-Person Process

The process runs through a U.S. embassy or consulate outside the country and involves two interviews. At least one is in person; the first can sometimes be by phone or email depending on the post. The consular officer confirms your decision is voluntary and that you understand what you are giving up.²

You complete a series of Department of State forms: DS-4079, a questionnaire covering biographical information, foreign residence, and other nationalities you hold;³ DS-4081, your statement of understanding of the consequences; DS-4080, the oath itself in renunciation cases; DS-4082, a witness attestation; and DS-4083, the Certificate of Loss of Nationality that the government prepares as final proof.

If asked, you must produce a valid foreign passport or naturalization certificate showing you hold another nationality. The State Department does not strictly forbid renouncing without proof of another citizenship, but the officer will discuss the risk of becoming stateless before proceeding.

The $2,350 fee is due at the appointment and is not refunded, even if your application is later denied. After the oath or the relinquishment forms are executed, your file goes to the Department of State in Washington for final review. That review can take several months or longer, and the embassy may contact you for more information before a decision.⁴ If approved, you receive your Certificate of Loss of Nationality.

When the Exit Tax Applies

Giving up citizenship does not automatically trigger a special tax. The exit tax under IRC Section 877A only reaches you if you are a “covered expatriate,” which means meeting any one of three tests:⁵

Net worth test: your worldwide net worth is $2 million or more on the day before your expatriation date.⁶
Income tax test: your average annual net income tax liability for the five prior tax years exceeds an inflation-adjusted threshold, which is $206,000 for 2025.⁷
Certification test: you fail to certify on IRS Form 8854 that you have met all federal tax obligations for the five years before expatriation.⁸

Meet any test and the IRS treats all your worldwide property as if you sold it at fair market value the day before your expatriation date, with any gain on that deemed sale taxable as income. An exclusion shelters part of the gain; for 2025 the first $890,000 is excluded.⁷ Both the income threshold and the gain exclusion are adjusted each year, so check the IRS instructions for the year you actually expatriate.

Two Exceptions to Covered Status

Two groups can avoid covered expatriate status even if they cross the income or net worth thresholds. Certain dual citizens at birth qualify if they were born a citizen of both the United States and another country, still hold citizenship and tax residency in that other country, and have been U.S. residents for no more than 10 of the 15 tax years before expatriation.⁵ Certain minors also qualify if they renounce before age 18½ and have been U.S. residents for no more than 10 tax years.

Both groups still have to pass the certification test. You must file Form 8854 and certify five-year tax compliance regardless of whether you fit an exception.

Deferring Payment

If you owe the exit tax but do not want to pay it all at once, you can elect to defer payment on specific assets until you actually sell them. The election requires posting adequate security, such as a bond or letter of credit, and signing an irrevocable waiver of tax treaty rights that would otherwise interfere with IRS collection.⁵ Interest runs from the original due date, not from the date you eventually pay, so waiting is not free. The election is irrevocable, applies only to the property you designate, and cannot extend beyond the tax year of your death.

Form 8854 and Five-Year Tax Compliance

Every person who expatriates files IRS Form 8854 with the tax return for the year that includes the expatriation date. The form is where you certify five-year tax compliance and where covered expatriates calculate their exit tax.⁸ To certify, you must have filed all required income, employment, gift, and information returns for the five prior tax years, and paid all related tax, interest, and penalties.

Missing the form, or filing it with incorrect or incomplete information, triggers a $10,000 penalty per year unless you can show reasonable cause. Failing the certification has a heavier consequence: it makes you a covered expatriate automatically, and the full mark-to-market exit tax applies regardless of your income or net worth.⁸ If you elected to defer exit tax on specific assets, you continue filing Form 8854 every year the deferral is in effect.

Consequences After Expatriation

Social Security

Renouncing does not wipe out Social Security benefits you have already earned. Former citizens can still be eligible for retirement, survivor, and disability payments.⁹ But as a noncitizen living outside the United States, your payments can stop after six consecutive calendar months abroad unless an exception applies, typically tied to your new country of citizenship or residence or to a totalization agreement.¹⁰ Confirm your specific situation with the Social Security Administration before you finalize anything.

Coming Back to Visit

After expatriation you are a foreign national for immigration purposes. To visit, you need a visa or eligibility under the Visa Waiver Program based on your new country of citizenship. If you qualify for neither, you could be barred entirely.²

Federal immigration law also contains the Reed Amendment, which makes a former citizen inadmissible if the Attorney General determines the renunciation was for the purpose of avoiding U.S. taxes.¹¹ The provision has rarely been enforced but remains on the books.

Gifts and Bequests to U.S. Heirs

If you are a covered expatriate, gifts and inheritances you leave to U.S. citizens or residents can be hit with a special transfer tax under IRC Section 2801, and it is the U.S. recipient, not you, who owes it.¹² Factor this in if your planned beneficiaries live in the United States.

Your Name on a Public List

Expatriation is not private. Every quarter the IRS publishes in the Federal Register the names of individuals who have renounced citizenship or ended long-term permanent residency, as required by IRC Section 6039G.¹³ The list carries names only, no financial detail or stated reasons, but it is publicly searchable.

1
Office of the Law Revision Counsel. 8 USC 1481 – Loss of Nationality by Native-Born or Naturalized Citizen; Voluntary Action; Burden of Proof; Presumptions
2
U.S. Department of State. Relinquishing U.S. Nationality Abroad
3
U.S. Department of State. Questionnaire – Loss of United States Nationality; Attestations
4
U.S. Embassy and Consulates in the United Kingdom. Loss of U.S. Citizenship (i.e. Expatriation)
5
Office of the Law Revision Counsel. 26 USC 877A – Tax Responsibilities of Expatriation
6
Office of the Law Revision Counsel. 26 USC 877 – Expatriation to Avoid Tax
7
Internal Revenue Service. Expatriation Tax
8
Internal Revenue Service. Instructions for Form 8854
9
USAGov. Renounce or Lose Your Citizenship
10
Social Security Administration. International Programs – Payments Outside the U.S.
11
Office of the Law Revision Counsel. 8 USC 1182 – Inadmissible Aliens
12
Internal Revenue Service. Gifts From Foreign Person
13
Federal Register. Quarterly Publication of Individuals Who Have Chosen to Expatriate