John C Newman1
A little history is helpful in understanding the imposition of an exit tax on US citizens and long-term residents who commit a taxable act of expatriation on or after June 17, 2008. Since 1966, the Internal Revenue Code has contained anti-abuse rules attempting to tax individuals who renounce their US citizenship for tax avoidance. These 1966 rules (codified in Code §877) were created when the international taxation rules of the Code were systematized in their current structure. The 1966 anti-abuse rule was difficult to enforce. When the US Congress created the HIPAA rules in 1996, it raised necessary revenue by replacing much-amended §877 rules with a provision imposing--for a ten-year period following expatriation--an “alternative tax regime” on a US citizen who relinquished citizenship to avoid the worldwide reach of US tax rules, but only if such expatriation was treated (in the words of the Code) as having a “tax avoidance purpose.”
Matthew D. Getty, Esq.
(This article was first published in Vermont Property Owners Report, a Montpelier-based subscription newsletter about Vermont and Vermont real estate. Phone: 802.229.2433)
Christopher W. Blanchard, Esq.
In 2008 the Vermont Legislature amended 18 V.S.A. Chapter 38 in an effort to better protect individuals from lead poisoning within the State. Owners of pre-1978 housing have a duty of reasonable care to prevent exposure to or creation of lead hazards.
