When contemplating new family plans or business projects, fully understanding their tax consequences in the short, medium, and long term is vital to their control, planning, and optimization. The process of renouncing U.S. citizenship or abandoning a U.S. green card may end at the U.S. embassy or consulate; however, the obligation to pay U.S. tax does not. If you meet the conditions of a “covered expatriate,” you are required to pay the exit tax unless an exception applies. The exit tax is built on a mark-to-market regime, under which the expatriate is deemed (1) to have sold all his/her assets for their fair market value and realized a gain or loss and (2) to have distributed the funds in his tax-deferred accounts, such as health savings accounts as of the day right before the expatriation date. To assess whether you are subject to the exit tax, you must understand who is a “covered expatriate.” A covered expatriate can be a U.S. citizen or a green card holder who has been a green-card holder during eight of the previous 15 years before expatriation and meet the following any of the three following tests: