# Renouncing Citizenship Form 8854 for IRS - Wealth Exit Tax Application



## dann

The Instructions for Form 8854 read as follows on the IRS website:

_If you expatriated after June 16, 2008, the expatriation rules apply to you if any of the following statements apply.

Your average annual net income tax liability for the 5 tax years ending before the date of expatriation is more than the amount listed next.

$139,000 for 2008.

$145,000 for 2009.

$145,000 for 2010.

$147,000 for 2011._

If am filing this form now, does mean if my average annual income for the past 5 years was $147,000 or higher or does it mean if my income was higher than the figures stated for any of those years?

In other words, if my income was say $140,000 in 2008 but my average for the past 5 years is below $147,000 does this still apply to me?

Thanks for any replies.


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## graubart

Your tax liability is the amount of tax you owe, not your income.


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## Pacifica

Re "Your average annual net income tax liability for the 5 tax years ending before the date of expatriation is more than the amount listed next ..." 
"In other words, if my income was say $140,000 in 2008 ..."

They're not asking for income in this question. "Income tax liability" is the amount of income tax owed/paid.


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## RødGrød

dann said:


> The Instructions for Form 8854 read as follows on the IRS website:
> 
> _If you expatriated after June 16, 2008, the expatriation rules apply to you if any of the following statements apply.
> 
> Your average annual net income tax liability for the 5 tax years ending before the date of expatriation is more than the amount listed next.
> 
> $139,000 for 2008.
> 
> $145,000 for 2009.
> 
> $145,000 for 2010.
> 
> $147,000 for 2011._
> 
> If am filing this form now, does mean if my average annual income for the past 5 years was $147,000 or higher or does it mean if my income was higher than the figures stated for any of those years?
> 
> In other words, if my income was say $140,000 in 2008 but my average for the past 5 years is below $147,000 does this still apply to me?
> 
> Thanks for any replies.


Like the other wrote, the instructions are talking about _the amount of tax owed to the IRS_ AFTER foreign tax credits/Foreign earned income exclusion. Unless you are quite wealthy this probably does not apply to you.


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