What does the submission of Form 8854 signify for an expatriate?

The submission of Form 8854 is a critical step for individuals who are expatriating, specifically indicating that they are renouncing their U.S. citizenship. This form is required by the Internal Revenue Service (IRS) to ensure that individuals who give up their citizenship report their income and tax liability, as well as to establish their compliance with U.S. tax laws up to the date of expatriation.

Filing Form 8854 shows that the individual is aware of the potential tax implications of their decision, including the possibility of being subject to an exit tax based on their net worth or unrealized gains. This form also serves to document their expatriate status and fulfill their reporting obligations, which is a critical aspect of the renunciation process.

The other options do not accurately reflect the purpose of Form 8854. Living in the U.S. for over a year or applying for residency tax benefits would not necessitate this form, nor would simply settling in a foreign country. Only the act of renouncing citizenship connects directly to the requirement of filing this specific form.