More Enforcement and a Centralized Compliance Effort Are Required for Expatriation Provisions

The Commissioner, Large Business and International (LB&I) Division, should contact the State Department, via the Federal Intergovernmental Program, for the SSN data field to be added to the CLN and explore the feasibility of obtaining the CLN electronically.

The Commissioner, Large Business and International (LB&I) Division, should update the Letter 2399C and Letter 4135C for compliance under the HEART Act and develop IRM procedures to use these letters to obtain Form 8854 when a CLN is received and no Form 8854.

The Commissioner, Large Business and International (LB&I) Division, should evaluate the information reported on Form 8854 and determine what data fields should be added to the expatriate database to ensure tax compliance of taxpayers who expatriate, e.g., Form 8854, Part IV, Section B, Property Owned on Date of Expatriation.

The Commissioner, Large Business and International (LB&I) Division, should develop IRM procedures for transcribing Form 8854 data, correct Form 8854 data when information as filed by expatriates is missing or incomplete, and prepare analysis as needed to determine if the expatriate is a covered expatriate and subject to tax under I.R.C. Section 877A.

The Commissioner, Large Business and International (LB&I) Division, should establish a process to compile information on all expatriates whether they filed Form 8854 with their Form 1040-NR or filed Form 8854 with the LIHC unit and use this information to identify the highest risk expatriate returns for tax compliance.