When U.S. citizens decide to relinquish, or intend to relinquish, their United States (U.S.) citizenship, there are tax obligations that cannot be ignored. The IRS’s Relief Procedures for Certain Former Citizens provides a streamlined, penalty-free tax compliance route for qualifying individuals to navigate the complexities of exiting the U.S. tax system.

What is a covered expatriate under U.S. tax law?

The IRS relief program lets certain former U.S. citizens avoid being classified as “covered expatriates” under §877A. This designation carries significant tax consequences, so understanding who falls into this category is essential. Covered former citizens have given up their citizenship and meet one or more of the following criteria listed:

• Net worth of $2 million or more on the exit or expatriation date
• For the five years before exiting the U.S., the individual’s average net income tax liability is more than an inflation-indexed amount ($206,000 for 2025)
• Fails to certify compliance with tax obligations in the preceding five years through Form 8854, Initial Annual Expatriation Statement

By avoiding covered expatriate status, individuals also avoid the dreaded exit tax, often called the mark-to-market tax, which treats an expatriate’s assets as if sold at fair market value as of the day before expatriation. This tax applies to any recognized gain on the deemed sale that exceeds the exclusion amount ($890,000 for 2025).

To qualify under the relief procedures, you must:

• File tax returns for your expatriation year and the five preceding years, including required information returns, and
• Submit the required returns to bring your U.S. tax obligations into compliance, without penalties or exit tax being applied.
• If you meet the criteria, you will not be liable for unpaid taxes and penalties for these years.

Eligibility requirements for the IRS expatriate relief program

Here are the main eligibility requirements:

1. Non-willful conduct

Failures to file returns, gift taxes or information forms (Report of Foreign Bank and Financial Accounts (FBAR); Form 8938, Statement of Specified Foreign Financial Assets) must result from negligence, mistake or a good-faith misunderstanding, not deliberate evasion

2. Net worth under $2 million

At expatriation time and when submitting relief materials

3. Aggregate U.S. federal tax liability of $25,000 or less

For the year of expatriation and five prior years, calculated after applying all exclusions, deductions, and credits, but excluding exit tax, penalties and interest

If all three are met, you can submit the necessary filings and avoid the exit tax and penalties.

Step-by-step process to qualify for expatriate tax relief

Here’s a step-by-step snapshot of what to do:

• File Forms 1040, U.S. Individual Income Tax Return, and information returns for the five years before expatriation and the year of expatriation
• Include Form 8854 to certify if you met U.S. tax obligations
• Attach your approved DS-4083, Certificate of Loss of Nationality of the United States, showing expatriation date after March 18, 2010
• Mark the first page of your packet in red ink: Relief for Certain Former Citizens
• Mail everything to the designated IRS office; the IRS will review and, if accepted, confirm your relief

These procedures are especially valuable for individuals unaware of their U.S. tax status, because they sidestep exit-tax consequences and clear prior obligations with minimal burden.

What tax professionals should know about expatriate relief

Here are two helpful questions adapted from the IRS FAQ page that clarify essential details:

Q: How long will these procedures remain available?

A: The IRS has made these procedures available indefinitely and will announce in advance if they plan to end them.

Q: What counts as “non-willful conduct”?

A: The IRS defines it as conduct due to negligence, inadvertence, mistake or a good-faith misunderstanding of the law, versus intentional avoidance.

These FAQs affirm the relief program’s longevity and emphasize the importance of unintentional non-compliance.

Practical considerations for former citizens

Many former citizens, especially those who never discovered they had U.S. exit tax obligations, are stunned by the implications of expatriation under U.S. tax law. Without relief, they could face a tax on worldwide assets, hefty penalties and complicated reporting. This program provides a clean, affordable exit, meaning no exit tax, penalties or interest if eligibility is met.

Other considerations

• Only individuals qualify. Estates, trusts, corporations or other entities are ineligible.
• Incomplete submissions (such as lacking nationality proof) will be processed as regular filings, not under the relief procedures.
• While FBAR and Form 8938 filings aren’t a prerequisite, if you do submit them with relief, the IRS won’t assess penalties for late filing.
• Processing can take time, so clients should prepare for potentially at least several weeks before a response confirms acceptance.

How NATP members can guide clients through expatriate relief

If you’re advising a client who has expatriated or plans to, these procedures could be life changing. Check that they meet the criteria: non-willful conduct, sub-$2 million net worth and tax liability under $25,000. Help them gather the last six years of tax returns, Form 8854 and their Certificate of Loss of Nationality.

This is more than compliance; it’s closure for the client. By guiding them through this process, you’re helping former citizens close their IRS chapter cleanly and focus on their lives beyond U.S. citizenship.

If you haven’t visited your expanded my Social Security account now’s the time. The Social Security Administration’s (SSA’s) recent updates are here to make life easier. As of mid-July 2025, account holders can enjoy uninterrupted, 24/7 access to key Social Security services. Whether checking on payments, viewing tax documents or requesting a replacement card, it’s all available all the time, not just during office hours.

Access the new SSA retirement calculator and benefit statements

The SSA tool now offers fresh enhancements for my Social Security users:

• Request a replacement SS card online with no more waiting for paperwork via mail
• Securely view your Social Security number via your mobile device if you’ve misplaced your card
• View retirement calculators, benefits statements, tax forms (like Form SSA-1099, Social Security Benefit Statement), benefit verification letters and claim status
• Update personal details including address, direct deposit and contact preferences, and upload documents with a few clicks

Convenience is front and center. No more phone calls or visits to the local SSA office unless necessary. It’s designed for everyone, including retirees, working professionals, soon-to-be retirees and even people starting disability or Medicare claims. Security isn’t an afterthought, either. SSA promises a smooth blend of convenience and protection, including digital identity proofing and safeguards around SSN access.

How to get started with SSA online tools

1. Create (or log into) your account: Head to ssa.gov/myaccount to get started. You may be guided through identity verification, either online or in person, depending on what services you’re accessing.

2. Explore the new features: Once logged in, you’ll see options for replacing your SSN card, getting your SSA-1099, checking your benefit status and more.

3. Secure your access: SSA has ramped up security measures. Consider enabling multi-factor authentication, especially if you’re using mobile access.

4. Review your profile: Take advantage of the ability to update your direct deposit, address, messages and document uploads, all in one place.

5. Use the tools: Run your retirement projections, check claim statuses or get proof of benefits with a few clicks.

What are the implications of quickly accessing SSA tax forms like the SSA-1099 online?

This is a big win for tax professionals. We advise clients to use every advantage to simplify documentation and streamline filing. Now, with SSA’s digital tools, retrieving tax forms, verifying benefit income or updating information is faster than ever. No paper chase required. Whether your client needs a replacement card, SSA-1099 or proof of income, they can get it instantly online.

SSA’s upgrades aren’t just flashy, they’re fortified:

• Digital identity proofing helps ensure only legitimate users access accounts.
• Direct access to SS cards means fewer lost-card headaches and fewer security risks.

Clients still need to stay vigilant, however: secure passwords, monitor accounts and report suspicious activity immediately.

Enabling my Social Security helps tax professionals simplify client work

Here’s your quick action plan for clients:

Task	Tip
Set up my Social Security account	Use ssa.gov/myaccount to register, utilizing secure identity verification.
Explore new tools	Request replacement cards, view SSA-1099 or benefit statements, update info.
Use anytime	With 24/7 access, jump in whenever it is convenient.
Stay secure	Advise clients to enable strong passwords and monitor activity.

These new features give users more control, and you, as their tax advisor, a smoother experience to get essential documents when needed. It’s not just modernization, it’s also practical, secure and client centered. Help your clients get the most from their my Social Security account.

Employers are always seeking smart, cost-effective benefits to attract and retain employees. One such perk, often underappreciated, is the employer-provided education assistance program under §127 of the tax code. These programs let businesses cover employee’s eligible educational expenses tax-free, up to a certain limit ($5,250 in 2025).

With 2025 well underway, there’s no better time to revisit how these benefits work, what expenses qualify, and what steps employers (and their tax advisers) need to take to maximize them.

Key rules employers must follow in 2025

While educational assistance programs have long been a fixture in employer benefit portfolios, their permanence sets 2025 apart. The generally temporary tax exclusion is now solidified in law, providing much-needed continuity.

Here’s what that means in practice:

• Annual cycle: the $5,250 exclusion per employee, per calendar year resets annually.
• Written plan required: Section 127 mandates a separate written plan that clearly outlines eligibility, covered expenses and non-discrimination rules that prevent favoritism toward highly compensated employees.
• Payroll coordination: Employers must ensure reimbursements aren’t mistakenly included in taxable wages on Forms W-2, Wage and Tax Statement.
• Student loan surcharge: Student loan repayment assistance qualifies through Dec. 31, 2025, a benefit that needs monitoring for extension beyond this year.

What expenses qualify under §127

Section 127 provides flexibility, but not without boundaries. Here’s what can be covered:

• Tuition, fees and related charges paid directly to an educational institution
• Books, supplies and equipment required for course enrollment or attendance
• Undergraduate and graduate courses, even if not pursuing a degree
• Student loan principal or interest payments, eligible only if incurred by the employee for their own education and paid after March 27, 2020, and before Jan. 1, 2026

Non-qualifying costs include:

• Meals, lodging, transportation
• Tools or supplies that remain with the employee, like a laptop
• Courses in sports, hobbies or games, unless required for a degree or directly related to the employer’s business

Action steps for employers

Here’s how employers and tax advisers can turn these rules into effective programs:

1. Review and update the written plan

• Ensure the document addresses eligibility, benefit limits and nondiscrimination.
• If desired, include student loan reimbursement, as most plans require an amendment to incorporate this feature.

2. Communicate the benefit

Employers should feature it in onboarding materials and internal benefits communications. They could also highlight it mid-year to capture interest from employees considering classes or loan repayments.

3. Sync with payroll and record-keeping

Tax-exempt assistance must be excluded from wages. Employers should:

• Track reimbursements against the $5,250 per employee, per calendar year limit
• Retain documentation: receipts, loan statements, enrollment confirmations
• Ensure payroll systems correctly process and report these benefits

4. Leverage for attracting talent

Framing the program as a recruitment and retention tool boosts return on investment. Consider tracking usage trends and retention impacts, and tailoring benefits toward credentials that align with business needs.

5. Plan ahead for student loan expiration

The loan assistance provision ends Dec. 31, 2025, unless extended. Employers should:

• Promote it while available
• Prepare communications about future changes
• Decide whether to offer a taxable benefit post-expiration

Other IRS resources

IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits, offers critical technical guidance:

• It reinforces the separate written plan requirement and $5,250 annual exclusion.
• It highlights the nondiscrimination rule, ensuring highly compensated employees don’t receive preferential treatment.
• Publication 15-B positions education assistance within the broader framework of fringe benefits, which are taxable unless specifically excluded by law.

Additional IRS updates reinforce the current environment:

• The IRS reminds employers that educational assistance continues to include loan payments through the 2025 sunset window.
• IRS FAQs clarify that §127 benefits are excluded from income, but cannot be used to claim other credits (like the lifetime learning credit).

Wrapping up

Offering employer-sponsored educational assistance isn’t just a tax-savvy move, it’s a strategic investment in talent. With a $5,250 annual employee exclusion, businesses can help employees pursue learning or manage student loans, without triggering taxable income.

For 2025, it’s a golden window. The educational assistance exclusion is now permanent.

Student loan repayments remain eligible for special tax treatment through at least the end of the year.As campaigns begin for the new year, employers should dust off their written plans, remind employees (and themselves) about this valuable benefit and apply the rules strategically. Tax professionals can lead the way by helping clients design, communicate and manage programs that benefit everyone.