I have just learned that “Taxpatriate” proposal by Schumer-Reed et al. has been dropped from the Immigration bill but has now been inserted into a Homeland Security Bill. Full details of the Taxpatriate proposal can be found at my earlier blog post, here
Senator Reed’s continued attempt to have it enacted into law in the Homeland Security Bill shows you how determined he is. The link to the Homeland Security Bill is here (see page 46). It is not identical to the text submitted in the Immigration bill. This proposal bans any any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Secretary of Homeland Security to have renounced United States citizenship for the purpose of avoiding taxation by the United States. It also bans “covered expatriates” but with respect to such covered expatriates, they can be granted permission to enter the US if the individual demonstrates by “clear and convincing evidence” that avoiding taxation by the United States was not one of the principle purposes that the covered expatriate renounced United States citizenship.
Some professionals think this proposal may have a greater chance of passing in the Homeland Security Bill than in the Immigration bill.