Ladies and gentlemen, George Clooney and his family have officially left the country, and are in the middle of an exit tax dilemma. After recently declaring French citizenship, Clooney faces a major financial decision: remain a dual citizen and face numerous tax complications or renounce U.S. citizenship and pay a hefty exit tax. 

Why Paying the Exit Tax Isn’t a Slam Dunk

If he remains a dual citizen, Clooney would need to navigate two tax systems: U.S. and French. The United States is one of the few countries in the world that taxes its citizens on worldwide income, regardless of where they live. That means even if Clooney spends the rest of his life sipping wine in Provence, the IRS expects to stay involved. 

So, he and his family should renounce their U.S. citizenship, right? Not so fast. Although it’s common to bemoan how high, unfair, and complicated U.S. taxes are, France has even higher personal income tax, estate tax, and other tax rates, along with its own complicated system. 

There is also a France-U.S. tax treaty that ensures, for the most part, that double taxation doesn’t happen. Instead, they would pay taxes at the higher of the two rates (which, in many instances, is the French tax rate). That, along with tax benefits like the foreign earned income exclusion and foreign tax credit, helps mitigate the tax risks of keeping dual citizenship with the U.S. 

The alternative—renouncing U.S. citizenship—comes with its own price tag. Under Internal Revenue Code Section 877A, “covered expatriates” who meet certain income rules are subject to an expatriation or exit tax. This provision treats the individual as if they sold all their worldwide assets the day before expatriation, triggering capital gains tax on any unrealized appreciation above an exclusion amount that’s adjusted annually (the exclusion was $890,000 for 2025).

For someone like Clooney, whose estimated wealth of more than $500 million includes real estate, intellectual property, and investment portfolios, that deemed sale could translate into a massive immediate exit tax liability. In other words, leaving the U.S. tax system isn’t as simple as turning in a passport—it’s settling up on a lifetime of gains all at once.

Other Factors to Consider

Renouncing citizenship can affect travel flexibility, business opportunities, and even public perception. For someone with Clooney’s global brand, those intangible factors may carry real weight. He owns property and works in the U.S. and around the globe, including a heavy presence in California, which, as we know, is a difficult place to escape from a tax perspective. In practice, many high-net-worth individuals in these types of situations engage in years of pre-expatriation planning—restructuring assets, utilizing trusts, and timing income recognition—to minimize the impact of Section 877A. 

So, as Tax Analysts’ William Hoke covers in a recent Tax Notes article, keeping U.S. citizenship and, thus, avoiding the exit tax, could work out in the Clooneys’ favor, at least for a while. But maintaining the strategy indefinitely may not work. 

According to Hoke, new French citizens have a five-year grace period in which they are not subject to France’s real estate wealth tax (IFI), which is levied on worldwide real estate assets. There is also a French exit tax that kicks in at the six-year mark. These factors may be clues that the Clooney family’s move to France may not be permanent.  

Lessons for the Rest of Us

While most people won’t face Clooney-sized tax bills, the underlying principles apply broadly. First, citizenship and residency have real tax consequences, especially in an increasingly global world. Moving abroad doesn’t automatically sever ties with the IRS.

Second, major financial decisions rarely exist in a vacuum. Tax, legal, and lifestyle considerations all intersect, and optimizing one at the expense of others can backfire.

Finally, planning matters. Whether it’s expatriation, retirement, or business succession, a proactive strategy almost always beats a reactive cleanup. The tax code rewards those who think ahead—and penalizes those who don’t.

Clooney’s situation may be unique in scale, but not in structure. And as global mobility continues to rise, more individuals will find themselves navigating similar crossroads—just with fewer cameras watching.

Feel free to contact us with questions about the exit tax and other considerations, or click here to schedule a complimentary consultation.

Photo purchased from Shutterstock 1373547149 May 19, 2026