The relief procedures for certain former citizens are a special program from the Internal Revenue Service (IRS) that allows former U.S. citizens to become fully compliant with U.S. tax law, without penalties, interest, or the exit tax.
These IRS relief procedures are available to certain former U.S. citizens who relinquished their U.S. citizenship after March 18, 2010. They are particularly useful for Accidental Americans who may have never filed U.S. tax returns because they were unaware of their U.S. citizenship or tax obligations.
At 1040 Abroad, we’ve helped hundreds of clients successfully use these relief procedures for certain former citizens each year. It’s the perfect option for those who want to file required tax returns, clear their tax obligations, and officially sever their ties to the U.S., especially for people who don’t even have a Social Security Number (SSN).
Why Did the IRS Create These Relief Procedures?
The IRS recognized that many Accidental Americans—people born in the U.S. to foreign parents or who inherited citizenship through a parent were unaware of their U.S. tax obligations. Under American law, citizens are taxed on their worldwide income, even if they live abroad permanently.
This caused major problems once the Foreign Account Tax Compliance Act (FATCA) went into effect, requiring foreign financial institutions to report U.S.-linked accounts. Many individuals suddenly learned they were expected to file U.S. income tax returns and report foreign financial accounts they never realized were subject to U.S. rules.
The relief procedures for certain former citizens were created in 2019 to give these people a simple way to catch up on tax compliance and avoid being treated as a covered expatriate under the expatriation tax rules.
Who Qualifies for the Relief Procedures for Certain Former Citizens?
To qualify, you must meet all of the IRS’s eligibility criteria:
-
- You relinquished your U.S. citizenship after March 18, 2010.
- You have no filing history as a U.S. citizen or resident. A Form 1040-NR filed in good faith under the belief that you were a nonresident does not necessarily disqualify you.
- Your previous failure to comply with U.S. tax obligations was due to non-willful conduct.
- You did not exceed the applicable average annual net income tax liability threshold for the five tax years preceding expatriation.
- Your net worth was less than $2 million both at the time of expatriation and at the time you make your submission.
- Your aggregate U.S. tax liability for the year of expatriation and the five preceding tax years is $25,000 or less, after applying permitted deductions, exclusions and credits.
If you meet all of these requirements, the IRS will waive up to $25,000 of U.S. tax liability for the six-year filing period. In other words, if your total qualifying U.S. tax liability is $25,000 or less, you do not have to pay it. The IRS specifically states that no payment is required with an eligible submission.
What Are the Main Benefits of the Relief Procedures?
The benefits of these relief procedures for certain former citizens are significant. Here’s why they’re often the best solution for Accidental Americans:
1. Up to $25,000 of U.S. tax does not have to be paid: If your total qualifying U.S. tax liability for the six-year period is $25,000 or less, you do not have to pay it. The IRS specifically states that no payment is required for eligible participants.
2. No penalties: If you qualify, the IRS will not impose penalties, including applicable late-filing and information-return penalties.
3. No SSN required: You can use the procedures even if you do not have a Social Security Number. You do not need to obtain an SSN just to participate.
4. No exit tax: If you qualify, you will not be treated as a covered expatriate under IRC 877A, so the expatriation tax does not apply.
5. IRS confirmation: After reviewing your submission and confirming that you qualify, the IRS will send you a letter stating that your submission was received and complete.
At 1040 Abroad, we’ve seen many clients with no SSN and no income tax liability resolve years of tax non-compliance this way, quickly and without financial stress.
How Do the Relief Procedures Work?
Under the Relief Procedures for Certain Former Citizens, qualifying former U.S. citizens submit tax returns covering six tax years:
- The five tax years preceding expatriation, and
- The year of expatriation itself.
You’ll need to:
- Prepare Form 1040 for each of the five tax years before expatriation, reporting your worldwide income and claiming any applicable deductions, exclusions, and credits.
- Prepare a dual-status return for the year of expatriation. This generally consists of Form 1040NR with Form 1040 attached as an information return reporting your worldwide income through the date of expatriation.
- File Form 8854 (Initial and Annual Expatriation Statement) for the year of expatriation. Form 8854 is used to report your expatriation and complete the tax-compliance certification required under the procedures.
- Include any other required information returns, such as Form 8938 or other international tax forms that apply to your circumstances.
- File any required FBARs electronically with FinCEN. The electronic filing with FinCEN is the official FBAR filing.
- Provide the required supporting documents, including a copy of your approved Certificate of Loss of Nationality (CLN) and identification, such as a valid passport or a birth certificate together with government-issued identification.
The tax returns, Form 8854, applicable information returns, and supporting documents are submitted to the IRS by paper mail. Write “Relief for Certain Former Citizens” in red ink, across the top of each return.
The IRS will review your submission to determine whether it is complete and whether you meet the eligibility requirements. If you qualify, the IRS will send you a letter confirming that your submission was received and complete.
The relief package should be mailed to:
Internal Revenue Service
3651 South I-H 35
Mail Stop 4301 AUSC
Attn: Relief for Certain Former Citizens
Austin, TX 78741
What Is a Covered Expatriate, and Why Should You Avoid It?
Covered expatriate is a former U.S. citizen who meets one of these three conditions under the Internal Revenue Code (IRC 877A):
- Average income tax liability test: You owed more than the threshold average income tax for the prior five tax years
- Net worth test: Your net worth was at least $2 million on the date of expatriation.
- Certification test: You can’t prove you met your U.S. tax obligations for the previous five years.
Being a covered expatriate triggers the exit tax, which taxes unrealized gains on your worldwide income and foreign financial assets as if you sold them at their fair market value.
The relief procedures for certain former citizens allow eligible individuals to avoid this classification entirely—so no exit tax, no penalties, and no complicated audits later.
What If I Don’t Have a Social Security Number?
This is one of the biggest advantages of these procedures for certain former citizens.
The IRS explicitly allows individuals to file without an SSN. You can leave that field blank on all forms, and your submission will still be processed.
For Accidental Americans who never had an SSN—and whose foreign country of residence doesn’t require one—this is the simplest path to tax compliance and official closure.
At 1040 Abroad, we’ve helped numerous clients in exactly this position successfully complete the process. You do not need to wait for an SSN or ITIN to participate.
How Does the IRS Handle Unpaid Taxes or FBARs?
If your aggregate U.S. tax liability for the six-year filing period is $25,000 or less and you meet all other eligibility requirements, you do not have to pay that tax. The IRS also will not assert penalties for eligible participants.
FBAR filing itself is not an eligibility criterion for the Relief Procedures. However, if you had an FBAR filing obligation, the required FBARs should be filed electronically with FinCEN before or at the same time as your Relief Procedures submission.
At 1040 Abroad, we also include copies of the electronically filed FBARs with the paper Relief Procedures package for reference.
If required FBARs are not filed and your submission is selected for examination, the IRS may assert FBAR penalties.
What Documents Are Required for the Submission?
To claim relief, you’ll need:
- Certificate of Loss of Nationality (CLN) approved by the Department of State.
- Passport or birth certificate for identification.
- Forms 1040 for the five tax years preceding expatriation.
- A dual-status return for the year of expatriation, generally including Form 1040-NR with Form 1040 attached as an information return.
- Form 8854 and all other required information returns.
- Applicable gift tax returns, if required.
Any required delinquent FBARs are filed separately and electronically with FinCEN.
Write “Relief for Certain Former Citizens” in red ink on the first page of your submission. The IRS emphasizes that incomplete filings will be processed under regular tax law, meaning penalties could apply if information is missing.
What If I’ve Already Renounced My U.S. Citizenship?
You can still use these Relief procedures for certain former citizens as long as your date of expatriation is after March 18, 2010, and you meet all other conditions.
Your Certificate of Loss of Nationality will serve as proof of renunciation, and your tax years preceding that date will determine your eligibility.
This flexibility makes the program valuable for those who renounced years ago but never filed U.S. tax returns or resolved their tax liabilities.
What Happens After You Submit?
Once your package is submitted, the IRS reviews it to confirm that it is complete and that you meet all eligibility requirements. The IRS may also verify the information in your submission against information received from other sources.
If you qualify, the IRS will send you a letter confirming that your submission was received and complete. You will not be treated as a covered expatriate, and you will not be required to pay the qualifying unpaid taxes, penalties, or interest covered by the procedures.
The relief procedures do not necessarily eliminate all future U.S. tax obligations. After relinquishing citizenship, you may still have to file U.S. tax returns as a resident or nonresident alien, depending on your residence status, U.S. income, and other circumstances.
If you do not meet the eligibility requirements, the IRS will process the submitted returns under its normal procedures. You may then be responsible for the associated taxes, penalties, and interest. The IRS does not publish statistics showing how frequently relief procedure submissions are rejected.
The IRS advises allowing at least two months to receive its notification.
Are There Any Other Tax Amnesty Programs?
Yes, but none are as specific or forgiving as the relief procedures for certain former citizens.
Other option is the Streamlined Filing Compliance Program, which helps taxpayers who reside abroad and have non-willful conduct correct missed filings.
