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I am a Norwegian citizen by birth, and have lived here all my life. Some years ago, I learned that I am - by virtue of a US parent - also a citizen of the latter country. The amusement of learning that fact quickly gave way to a horror story of realizing the tax obligations US citizens are under when "abroad" (imagine how writing that feels, when "abroad" really means your home since birth). The first year after I learned, I followed IRS advice online and filed a few years of back-returns (all entirely covered by FEIE as far as I can tell, resulting in 0 net US tax) and FBARs, and have since then filed them to the best of my ability. I have not heard anything back, which I take as a good sign.

I am now coming up on the time when I believe I fulfill the requirements for giving up my US citizenship (such as having filed tax returns for the previous years), and am considering doing so. (Legal note: This is not something I am considering for tax purposes; I simply feel I have no connection with the US, and that is no good basis for holding a citizenship I never asked for). I am, however, hearing rumours that there can be financial consequences of giving up such a citizenship. In particular, can anybody shed any light on the following:

  • I am not a wealthy person. In net terms I am in debt. Am I understanding the regulations correctly that this should impose no "leaving tax" on me?
  • What happens if I, at a later stage in life, and obviously then as a foreigner were to take a job in the US? I am hearing rumours that as an ex-citizen I would be financially in a much worse position than any "regular foreigner". Is there any truth to this?

Thank you.

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  • You certainly won't be able to work in the US if you renounce your citizenship. You could come on a tourist visa.
    – Rocky
    Apr 30, 2015 at 23:29
  • @Rocky: That is an overstatement. Plenty of non-citizens work in the US. You will definitely need a visa, but people do obtain work visas that let them stay much longer than a tourist visa.
    – BrenBarn
    May 1, 2015 at 2:01

1 Answer 1

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I am not a wealthy person. In net terms I am in debt. Am I understanding the regulations correctly that this should impose no "leaving tax" on me?

Expatriation tax is imposed on people with personal wealth of $2M or tax liability of $147K - $157K a year for the last 5 years, or if you're out of compliance for the last 5 years (which from what you describe - you may be).

For 10 years after you renounce your citizenship, the US may still tax you as a citizen if you're present in the US for more than 30 days a year.

What happens if I, at a later stage in life, and obviously then as a foreigner were to take a job in the US? I am hearing rumours that as an ex-citizen I would be financially in a much worse position than any "regular foreigner". Is there any truth to this?

Once the 10 years pass, you're as foreigner as anyone else.

In any case, you'll need to get a proper visa and work authorization to work in the US. Being ex-citizen may complicate this step slightly, from the USCIS/consular/immigration officers' perspective, as they may assume you're trying to repatriate in some way and will put your intentions under extra scrunity.

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