Tax Rules for 
Non-Resident Aliens and
U.S. Expatriates

by Richard Duke

Part I - The U.S. as a Tax Haven for Foreign Persons and Companies
 

• Tax Rules for Non-Resident Alien Individuals (Section 871)

• Citizenship, Residence and Domicile

• Exemption for Interest from U.S. Debt or Debt of U.S. Banks or Similar Entities

• Exemption for Interest from Debt that is "Portfolio Interest"

• Exemption for Gains on U.S. Securities

• Low Dividend Withholding Rate for Certain Treaty Country Residents

Part II - Other Tax Rules for Non Resident Aliens and Foreign Companies

• Tax on U.S. Source Earned Income by Individuals

• Tax on Trade or Business Income in the U.S.

• The Branch Profits Tax on Foreign Companies With U.S. Branches

• Tax on Income from U.S. Based Real Property

• Tax on U.S. Source Rents or Royalties

• Estate and Gift Tax on U.S. Source Property

 
Part III - The Obstacles to Becoming a Non-Resident Alien 

• Worldwide Taxation of U.S. Citizens, Permanent Residents and Companies

• Prior Rules for Tax Motivated Expatriation

• 1996 and Subsequent Rules Define Tax Motivated Expatriation

• The Ten year Tax on Tax Motivated Expatriates (IRC 877)

• Income Items Subject to the Ten Year Income Tax

• Assets Subject to the Ten Year Estate and Gift Tax

• Comparison of Tax on NRA and Tax on Expatriates

• Uncertainty Regarding Ability of "Taxpatriates" to Return to the U.S.

• The Expatriation "Two-Step" (Getting an Alternative Citizenship)