Are You Giving Up Your Green Card?

Are You Giving Up Your Green Card?

Surrendering Green Card & IRS Tax Implications

Surrendering Green Card Tax Implications: When a U.S. Person gives up their green card and no longer wants to have any U.S. status, it is important to be sure that they engage in proper planning before giving up the green card. That is because in many circumstances, legal permanent residents who do not properly give up their green card aka (expatriate) may find themselves subject to unforeseen IRS reporting and U.S. tax consequences — even after relinquishing or abandoning legal permanent residence.

Here are a few different tax considerations to consider when Surrendering Your Green Card:

Green Card Lapse vs. Voluntary Abandonment

The Green Card is representation of legal permanent resident status.

In other words, unless the actual legal permanent resident status is formally abandoned, the mere fact that a green card may have expired does not mean the U.S. tax responsibilities are over and done.

If a person does not formally abandon their Legal Permanent Resident status (commonly performed by filing a USCIS form I-407) to relinquish their legal permanent resident status, then merely letting their green card expire does not terminate U.S. Person status for U.S. Tax.

Thus, if the legal permanent resident does not properly give up their green card, they will still become subject to tax even if after their card lapsed.

Moreover, if it turns out that they did not formally abandon their green card and have been a legal permanent resident for eight of the last 15 years they may end up being considered a covered expatriate.

8 Full-Years is not Required for Long-Term Residence

When a person is a covered expatriate, it means they may be subject to exit tax — depending on what their mark-to-market and deemed distribution computation results in.

But, not all permanent residents can even be considered a covered expatriate.

Rather, only U.S. citizens or Legal Permanent Residents who are Long-Term Residents (LTR) can be considered a covered expatriate.

An LTR is someone who has been a Legal Permanent Resident for eight of the last 15 years. If a person did not properly expatriate, the clock continues ticking…

More importantly, it does not require eight full years.

We have prepared a detailed summary explaining the analysis.

Be Careful of Form 8833 Treaty Positions

Depending on what type of Treaty position a Legal Permanent Resident takes, they may inadvertently make an expatriation representation to the US government.

If this is done after the legal permanent resident is already considered a long-term resident, it could have a catastrophic financial impact since it will eliminate the ability to engage in any pre-exit tax planning.

Interested in Expatriation from the U.S.?

Our firm specializes exclusively in international tax.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.

Each case is led by a Board-Certified Tax Law Specialist with 20-years experience, and the entire matter (tax and legal) is handled by our team, in-house.

*Please beware of copycat tax and law firms misleading the public about their credentials and experience.

Less than 1% of Tax Attorneys Nationwide Are Certified Specialists

Our lead attorney is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.

Recent Case Highlights

  • We represented a client in an 8-figure disclosure that spanned 7 countries.
  • We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
  • We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
  • We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
  • We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.

How to Hire Experienced Offshore Counsel?

Generally, experienced attorneys in this field will have the following credentials/experience:

  • 20-years experience as a practicing attorney
  • Extensive litigation, high-stakes audit and trial experience
  • Board Certified Tax Law Specialist credential
  • Master’s of Tax Law (LL.M.)
  • Dually Licensed as an EA (Enrolled Agent) or CPA

Interested in Learning More about our Firm?

No matter where in the world you reside, our international tax team can get you IRS offshore compliant.

We specialize in FBAR and FATCA. Contact our firm today for assistance with getting compliant.

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