Filing a US tax return while living abroad can be stressful and expensive. When I first came across this idea, I found it surprising, but finally understood how frustrated American taxpayers with a second citizenship and no desire to return to the United States would choose to renounce their American status. However, throwing your passport or green card in a drawer, letting it expire, and just forgetting about the whole US citizenship / permanent residency thing doesn’t work, and can do more harm than good. Unfortunately, there is no DIY expat. Formalities must be observed to successfully exit the U.S. citizenship, immigration, and tax systems. Doing so requires not only filing the correct documentation with the Department of State, but also the correct documentation, including Form 8854, with the IRS. Failure to comply with the required formalities can result in ongoing liabilities, fines, and potentially punitive departure tax.
