IRS Issues Fact Sheet on Tax Clearance for Aliens Leaving the U.S.

Before leaving the United States or any of its possessions permanently or for an extended amount of time, all U.S. resident aliens and nonresident aliens (with certain exceptions) must prove they have met all federal tax requirements, the Internal revenue Service (“IRS”) held in a fact sheet.

The IRS stated that an alien can satisfy this requirement by obtaining a tax clearance document, commonly called a “sailing permit” or “departure permit”, from the IRS.

The IRS explained that resident aliens leaving only temporarily as well as resident or nonresident aliens with no taxable income can use Form 2063, U.S. Departing Alien Income Tax Statement, to apply for a sailing permit. Form 2063 is a short information form that, once obtained, can be used for all departures during the year.

On the other hand, nonresident aliens who have any taxable income and resident aliens leaving the U.S. with no definite plans to return for the year will generally have to complete Form 1040-C, U.S. Departing Alien Income Tax Return, to receive a sailing permit. According to the IRS, such an alien must pay all tax shown as due on the Form 1040-C or furnish a bond prior to departure. Any tax paid with his Form 1040-C counts as a payment on the annual return filed after the end of the tax year (either a Form 1040NR for nonresident aliens or a Form 1040 for resident aliens). If the IRS sees that leaving the U.S. will not jeopardize the collection of the tax, then the tax may not need to be paid with the Form 1040-C, the IRS stated.

The IRS clarified though that certain classes of aliens are exempt from obtaining sailing permits. This includes foreign diplomats, employees of foreign governments, students, trainees and exchange visitors, and others who generally have no income subject to U.S. tax.

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