Section 2801: Identifying Covered Expatriates

Offshore Tax with HTJ.tax · May 5, 2026 · 1m

One of the most difficult aspects of Section 2801 of the Internal Revenue Code is not calculating the tax—it’s determining whether it applies at all.👉 That hinges on whether the donor is a covered expatriate.⚖️ 1️⃣ Who Bears the Burden?Under §2801:• The U.S. recipient is responsible for determining 👉 whether the transferor is a covered expatriate🧠 2️⃣ Why This Is a ProblemIn practice, recipients often:• Do not have access to:The expatriate’s net worthPrior tax filingsCompliance history👉 Yet they must still make a determination.⚠️ 3️⃣ Default Risk: PresumptionIf there is insufficient…