Sec. 8043. Repeal of provision on expatriation to avoid tax
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Subpart A of part II of subchapter N of chapter 1 is amended by striking section 877 (and by striking the item relating to such section in the table of sections for such subpart). Section 2(d) is amended by striking or 877 . Section 121 is amended by striking subsection (e). Section 865(j)(3) is amended by inserting as in effect before its repeal after section 877 . Paragraph
(2)of section 871(o) (as amended by this Act) is amended to read as follows: For taxation of covered expatriates, see section 877A. . Section 877A(g)(1)(A) is amended to read as follows: The term covered expatriate means any expatriate if— the average annual net income tax of such individual for the period of 5 taxable years ending before the date of the loss of United States citizenship is greater than $124,000, the net worth of the individual as of such date is $2,000,000 or more, or such individual fails to certify under penalty of perjury that he has met the requirements of this title for the 5 preceding taxable years or fails to submit such evidence of such compliance as the Secretary may require. . Section 877A(g)(1)(B) is amended by striking shall not be treated as meeting the requirements of subparagraph
(A)or
(B)of section 877(a)(2) and inserting shall not be treated as described in clause
(i)or
(ii)of subparagraph
(A). Section 877A(g)(1) is amended by redesignating subparagraph
(C)as subparagraph
(D)and inserting after subparagraph
(B)the following new subparagraph: For purposes of subparagraph (A), the term net income tax means the regular tax liability reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A. . Section 877A(g)(1), as amended by subparagraph (C), is amended by adding at the end the following new subparagraph: In the case of the loss of United States citizenship in any calendar year after 2007, the dollar amount in subparagraph (A)(i) shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(c)(2)(A) for the calendar year in which such loss of United States citizenship occurs determined by substituting calendar year 2003 for calendar year 2012 in clause
(ii)thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000. . Section 877A(g)(5) is amended to read as follows: The term long-term resident means any individual (other than a citizen of the United States) who is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the event described in subparagraph
(A)or
(B)of paragraph
(2)occurs. For purposes of the preceding sentence, an individual shall not be treated as a lawful permanent resident for any taxable year if such individual is treated as a resident of a foreign country for the taxable year under the provisions of a tax treaty between the United States and the foreign country and does not waive the benefits of such treaty applicable to residents of the foreign country. . Section 894(b) is amended by striking the last sentence. Section 2107 is amended by striking subsection (e). Section 2501(a) is amended by striking paragraphs
(3)and
(5)and by redesignating paragraph
(4)as paragraph (3). Section 3405(e)(13)(B) is amended by striking that such person is not— and all that follows and inserting that such person is not a United States citizen or a resident alien of the United States. . Section 6039G(a) is amended by striking section 877(b) or 877A and inserting section 877A . Section 6039G(d) is amended by striking section 877(a) or 877A and inserting section 877A . Section 7701(b) is amended by striking paragraph
(10)and by redesignating paragraph
(11)as paragraph (10). The amendments made by this subsection shall apply to individuals whose expatriation date (as defined in section 877A(g)(3) of the Internal Revenue Code of 1986) is on or after June 17, 2008.