Multilingual Language Interpretation Services, Expats and US Taxes

We’ve blogged about multi-language translation and interpreter services in the context of pension plans for foreign nationals and about legal translation services in the context of international estate taxes. US citizens living abroad often struggle with understanding what their tax obligations in the US are. According to Code section 877A, certain individuals who renounce their US citizenship or cease being long-term US residents will be deemed to have sold their worldwide assets just prior to expatriation. Under this interpretation, tax is due on the deemed sale to the extent that the net gain exceeds $627,000. (This figure is adjusted annually).

However, only ‘covered’ expatriates are subject to this section – which is where things get
tricky. The first step is to determine whether or not your client is an expatriate according to the US tax code. This determination will often depend on the laws of the foreign state and how the individual is categorized under them. To make this determination, a foreign language translation of the foreign statutes will be required. If expatriate status is determined, the next step is to determine
whether or not the individual is a covered expatriate under section 877A. Again, this often depends on the tax status that the foreign statutes place on the expatriate and thus foreign language translations will be required.

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