Estate taxes between non-resident and a citizen

Generally speaking, a person who is both a non-citizen and non- resident of the U.S. and who does not have any U.S. property will not owe U.S. estate taxes. There is a possible wrinkle to your proposed scenario because of the application of Internal Revenue Code section 877. Under that Code section, a person who expatriates from the U.S. for tax purposes will remain subject to the U.S. estate tax for 10 years after the date of expatriation. This section also applies to a person who was a green card holder for at least 8 of the 15 years immediately prior to the year in which the person gives up a green card. The estate tax tie in to section 877 can be found in Code section 2107. Expatriation (or giving up a green card) is presumed to be for tax purposes if the person's average annual net income tax is at least $136,000 for the 5 years prior to expatriation or if the person's net worth is more than $2 million. There is a mechanism to apply for a ruling that the expatriation was not for tax purposes--these provisions would not apply if a ruling were granted.

--Chris

I knew about this but thought that it was passed only for political show. Has this ever been prosecuted?