April Visa Bulletin: Retrogression in EB-3 (Worldwide, Philippines and Mexico)
While the availability of immigrant visas for the employment-based second category reflected no change from March to April, employment-based third category posted a 26-month retrogression for the worldwide chargeability and the Philippines, and a five-and-a-half-month retrogression for Mexico. Nationals of China and India received better news with an advance in cut-off dates by four-and-a-half months and one month, respectively.
The Department of State (DOS) explained that demand from the U.S. Citizenship and Immigration Services for adjustment of status cases remains "extremely high," which makes retrogression necessary to keep that demand within the FY-2009 numerical limits. DOS' prediction for the coming months does not rule out further slowing, a complete stoppage, or even a retrogression of cut-off date movement for the remainder of FY-2009. On a positive note DOS indicated that should a slowing or retrogression occur, it would likely be only temporary until the beginning of the new fiscal year in October 2009.
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Western Hemisphere Travel Initiative ("WHTI") Land and Sea Documentation Requirements will be Effective as of June 1, 2009
The Western Hemisphere Travel Initiative ("WHTI") requires travelers to present a passport or other approved secure document denoting citizenship and identity for all land and sea travel into the United States starting on June 1, 200
9. Citizens of Canada, the United States and Bermuda are currently exempt. Therefore, U.S., Canadian and Bermudan citizens should apply for secure passports or renew passports or investigate obtaining other acceptable secure documents such as special passport cards and trusted traveler cards that DHS has developed. Additional information about WHTI is available
here.
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Tax Law Changes and Potential Impact on Expatriates
The 2008 enactment of the Heroes Earnings Assistance and Relief Tax Act (the "HEART Act") carries revised tax implications for certain individuals who relinquish United States citizenship or lawful permanent resident status after the law’s effective date. Along with the purpose of providing tax relief for military personnel and their families, the HEART Act is intended to deter high-net worth U.S. citizens and long-term residents from avoiding the payment of U.S. taxes by imposing an immediate exit tax on both the U.S. and foreign assets of these individuals.
Who is Covered by the HEART Act?
An individual who meets the definition of a "covered expatriate" is subject to the provisions of the HEART Act. An expatriate is any U.S. citizen who relinquishes his citizenship and any long-term resident of the U.S. who ceases to be a lawful permanent resident of the U.S. An expatriate is "covered" under the HEART Act if he (1) has an average annual U.S. income tax liability of at least $139,000 (in 2008 and as adjusted annually) for five years prior to expatriation; (2) has a net worth of at least $2 million; or (3) is unable or fails to certify that he met his U.S. tax obligations for the five years preceding expatriation or fails to submit such evidence of compliance as the IRS may require.
What Effect does the HEART Act have on Expatriates?
Before enactment of the HEART Act, there was no immediate tax effect on expatriates. Under the HEART Act, the taxable effect of expatriation is immediate and ongoing. An expatriate is deemed to sell all of his worldwide property on the day before his expatriation date, and he must recognize gain on this constructive sale (the "mark-to-market" rule). While certain items are excluded from the mark-to-market rule, distributions from these items are generally taxable even if they occur more than 10 years after expatriation. In addition, covered expatriates are subject to a reporting requirement and must provide an information statement to the Internal Revenue Service for any year in which the individual has any obligations under the HEART Act. Failure to provide the statement may result in a $10,000 penalty.
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