This article covers the following topics:
How to renounce U.S. citizenship and officially terminate your U.S. tax residency as a U.S. citizen
To renounce U.S. citizenship, an individual must follow these steps:
Schedule an appointment at a U.S. embassy or consulate abroad.
Complete the required Forms:
Form DS-4079: Request for Determination of Possible Loss of U.S. Citizenship.
Form DS-4080: Oath of Renunciation of the Nationality of the United States.
Form DS-4081: Statement of Understanding Concerning the Consequences and Ramifications of Renunciation of U.S. Citizenship.
Form DS-4082: Witnesses' Attestation Renunciation/Relinquishment of Citizenship.
Pay a $450 renunciation fee to request a Certificate of Loss of Nationality.
⚠️ Note: Effective April 13, 2026, the State Department cut the renunciation fee from $2,350 to $450.
Attend the renunciation appointment at the U.S. embassy or consulate. This fee is charged by the U.S. Department of State for processing the renunciation of U.S. citizenship. It is required regardless of whether you are a covered or non-covered expatriate.
Take an oath of renunciation in front of a consular officer during the consulate appointment.
Receive a Certificate of Loss of Nationality (CLN), which serves as proof of renunciation, after the Department of State processes the application.
Notes:
Expatriation does not occur unless the intention was later confirmed by the issuance of a Certificate of Loss of Nationality (CLN). If a U.S. citizen submitted a statement of relinquishment but later changed his mind, he will remain a U.S. citizen.
Renouncing U.S. citizenship is a complex process with significant tax implications. It is often advisable to consult a tax professional to ensure all obligations are met and to evaluate strategies for reducing potential tax liabilities. The exit tax, in particular, can lead to significant liabilities, especially for those with high net worth or valuable assets. If you are considering renouncing U.S. citizenship, TFX tax experts can assist you with planning and expatriation. For pricing, please refer to the Expatriation services article.
Date of relinquishment of U.S. citizenship
For U.S. citizens, the expatriation date, when your U.S. tax obligations as a resident alien end, is the earliest date on which one of the following occurred:
The date you renounced your U.S. citizenship before a diplomatic or consular officer of the United States (provided that the voluntary renouncement was later confirmed by the issuance of a certificate of loss of nationality).
The date you furnished to the State Department a signed statement of your voluntary relinquishment of a U.S. nationality confirming the performance of an expatriating act (provided that the voluntary relinquishment was later confirmed by the issuance of a certificate of loss of nationality).
The date the State Department issued a certificate of loss of nationality.
The date a U.S. court canceled your certificate of naturalization.
Tax filings after relinquishing U.S. citizenship
After renouncing, U.S. tax obligations don’t automatically end. An individual must complete these tax-related steps:
File a final tax return for the year of renunciation: The IRS requires you to file a dual-status tax return for the part of the year you were still a U.S. resident and for the other part of the year you were a non-resident. This return includes all income earned up until the renunciation date.
File Form 8854 (Initial and Annual Expatriation Statement) with the final tax return to:
Certify tax compliance with U.S. tax obligations the five years prior to expatriation and avoid penalties.
Declare the net worth of your assets and liabilities.
Determine if you are a “covered expatriate".
Report any exit tax owed (only for covered expatriates).
Covered expatriate status
After filing, the IRS may classify you as a “covered expatriate" and subject to exit tax if any of the following statements apply:
Your average annual net income tax liability for the last five full tax years ending before the year you renounced citizenship or abandoned your Green Card is more than a specific threshold:
"Net income tax liability" is the amount of the total U.S. income tax owed on your Form 1040, after applying credits (e.g., foreign tax credits, but before considering estimated tax payments or withholdings).
"Average annual" is the sum of total tax liability for the five years before expatriation, divided by five.
The average annual net income tax liability threshold for the five tax years before expatriation (adjusted annually for inflation) is: $206,000 for 2025, $201,000 for 2024, $190,000 for 2023.
Example: If you expatriated in 2025, the IRS looks at your tax liability for 2020, 2021, 2022, 2023, and 2024, and the threshold is $206,000.
Your net worth was $2 million or more on the date of your expatriation.
You fail to certify on Form 8854 that you have complied with all federal tax obligations for the 5 tax years preceding the date of your expatriation.
❗ Important note: Failure to file Form 8854 may result in the IRS automatically considering you a covered expatriate.
Exit tax (only for covered expatriates)
If you are classified as a covered expatriate, you may owe an exit tax — a tax on the unrealized gains of your worldwide assets as if they were sold the day before expatriation. Any gain from this “deemed sale” is subject to U.S. tax. This may apply to:
Investments: Stocks, bonds, and securities.
Real estate: Property owned domestically or internationally.
Other assets: Pensions, collectibles, and other personal property.
Additionally, be aware of potential implications for estate and gift taxes. U.S. estate and gift tax rules may apply to future transfers of property to U.S. persons, which could impact your estate planning.
How to file a dual-status tax return after relinquishing U.S. citizenship
If you are up to date with U.S. income tax and financial reporting obligations, you are required to file two tax returns in the year of expatriation — a resident return (Form 1040) and a non-resident return (Form 1040-NR) — along with Form 8854.
Follow the steps below to complete this process through your TFX account:
Create a resident TQ for the year you expatriate and select US Citizen.
Complete it by entering your worldwide income earned from the beginning of the year up to your date of expatriation.
Create a non-resident (NRA) TQ — use the placeholder year 2005, select Not a US Citizen or GC Holder, and enter "365" as the number of days spent in the United States.
Complete the 2005 TQ by entering your U.S.-sourced income earned from your date of expatriation through the end of the year you expatriated.
Download Form 8854 (Initial and Annual Expatriation Statement) and complete Part I and Part II: Sections A and B only. Do not fill in Section C or D, or Part III. Do not leave any fields blank — enter the relevant information or write "N/A" or "?".
Upload the completed Form 8854 to the Documents section of your TFX account.
Submit both questionnaires for review by your tax preparer. Our team will check Form 8854 for completeness and accuracy.
Notes:
Why 2005? This is a placeholder year used because our system only allows one TQ per calendar year per person.
Unlike the resident TQ, the non-resident TQ only requires you to report U.S.-sourced income — not worldwide income.
We assist with Form 8854 only in conjunction with a tax return. We can't offer it as a standalone service.
Filing final return and Form 8854 without a certificate of loss of nationality
The State Department typically takes 8 to 12 months to issue a Certificate of Loss of Nationality (CLN), though processing times vary and delays are common.
If you renounced your U.S. citizenship before a diplomatic or consular officer and are still waiting to receive your certificate of loss of nationality, you do not need to wait for it to arrive before filing. You can submit your final return and Form 8854 now, using the date you renounced your citizenship at the embassy or consulate as your expatriation date. For example:
You furnish to the State Department a signed statement of your voluntary relinquishment of a U.S. nationality in June 2026.
You mail your final dual status return and Form 8854 to the IRS in April 2027.
The State Department issues a certificate of loss of nationality in approximately May 2027.