Travelling to the US? If you’re a US expat who doesn’t renounce properly, your trip may never get off the ground.

Air travel can be stressful. Rising airfares and hotel costs, flight cancellations, pilot strikes, long security wait lines, and lost luggage are just some of the headaches that travellers face as more and more people head to the US. According to the US Travel Association, flight demand was up by 12% in July alone.

US expats may want to be extra cautious, especially if they fall into one of two categories:

1.) The US expat who is not US tax compliant and/or owes money to the IRS.

For the first time in history, the IRS is exchanging information and communicating with the United States Citizen and Immigration Services (USCIS) department.  Customs officers now have more personal financial information at their fingertips than ever before, including whether you are US tax compliant, renounced your US citizenship properly, and/or owe interest, taxes, or penalties to Uncle Sam.

All US citizens are taxed on their world income and assets regardless of where they live in the world. Accordingly, they must file US tax returns and annual reporting forms to avoid significant penalties. Included in these annual reporting forms is an FBAR (Foreign Bank Account Report), which requires a US person to file when the aggregate of their highest values in non-US bank accounts, securities accounts, foreign retirement accounts, annuities, and other financial accounts, exceed more than $10,000 USD. Failure to timely file such a form can result in tens – even hundreds – of thousands of dollars in failure-to-file penalties.

In addition, the US State Department has the power to confiscate your US passport if you have “seriously delinquent tax debts” that exceed $50,000 USD in unpaid federal tax debt (including assessed penalties and interest). And if you are someone looking to renew your US passport, these debts must be repaid before the US State Department issues you a new document. Until then, you are on their non-renewal list.

Former UK prime minister and London mayor Boris Johnson had a highly publicized unpaid US federal debt nearly a decade ago. Johnson was born in New York when his parents worked there, and therefore, a US citizen in the eyes of the IRS. After selling his UK principal residence for a large capital gain, Boris owed the IRS hundreds of thousands in capital gains taxes. The home sale is almost universally tax-free in countries outside the US, including the UK, but not to the IRS if you are a US citizen on the day of the sale. Boris was travelling to the US in 2014 when he was informed that he owed more than $50,000 in capital gains taxes on the sale of his North London home and was flagged for questioning when he landed in the US. The now-former Prime Minister of the UK paid his US tax bill and quickly looked to formally renounce his US citizenship in 2016. Boris should have properly renounced before he sold the home. Not after! If he had done so, he would be hundreds of thousands of dollars wealthier today.

The other category that could impact your travel plans  to the US is:

2.) The US expat who renounced their citizenship but didn’t do it the right way.

Our firm always stresses the importance of renouncing properly in all the expatriation webinars and seminars we host during the year. Think of it as ensuring that all your t’s are crossed and i’s are dotted. One of the more crucial aspects in the renunciation process is the interview at a US Embassy or Consulate General, where if the US Attorney General determines that you are renouncing for tax avoidance purposes, you can be found excludable from the United States for life. Under the Reed Amendment, correct preparation for the interview is a critical part of renouncing properly. This is why our team works closely with you during the renunciation process to ensure you are fully prepared for the interview. We have handled more than 4500 renunciations across six continents over the past decade, and to this day, not one of our clients has ever been blacklisted.

In our webinar sessions, I often point to the Reed Amendment’s list of inadmissible people in the US. This list is horrifying as it is comical. It includes drug traffickers, terrorists, Nazis, sex traffickers, child abductors, and perhaps the biggest threat to the American way of life – former US citizens who renounce their citizenship to avoid taxation (thick sarcasm). If this last group is lumped in with the same group as the former, it shows how seriously the US government looks upon US expats who don’t renounce their citizenship the right way.

Our team of US lawyers represents between 600 and 900 US citizens and green card holders who decide to renounce their US status correctly every year on six continents – more than any other firm in the world. We can also help expedite your renunciation process by identifying US embassies and consulates with shorter wait times.

We’ve helped thousands of US expats and green card holders successfully terminate their citizenship status – but, again, it MUST be done properly.

If you or a family member is a US citizen or green card holder considering renunciation, we invite you to visit our dedicated webpage for more information. This page contains links to register for our upcoming renunciation webinars. You can find one tailored to your geographic location in our events listings.

These webinars thoroughly review everything you need to know about the US citizenship renunciation process and available options should you decide to take the next steps.