Contents
Green Card Expired & US Tax
Green Card Expired
Green Card Expired & U.S. Tax: A very common misconception for legal permanent residents is that if they let their green card expire, then that means they are no longer considered a a U.S. Person for tax purposes & IRS reporting – this is incorrect.
Rather, in order to properly give up us person status for tax purposes a person must voluntarily abandon their legal permanent resident status (or have it administrative or judicially revoked).
Just letting the Green Card expire it is insufficient for relinquishing U.S. tax status.
We will summarize the difference between a Green Card expiring and voluntary abandonment of Legal Permanent Resident status — as well as whether an expired Green Card means the person is still subject to US Tax as a permanent resident.
Common Example
Here’s a common example of a situation we deal with often:
Michelle is a citizen of Taiwan and a Legal Permanent Resident in the United States. Around the six-year (6) mark, Michelle is done with her work assignment in the United States and decides to move back Taiwan.
At around the same time, her 10-year green card is about to expire — so why not just let it expire and then leave United States?
From a conceptual standpoint, the Green card is just a representation of the legal permanent resident status, not the permanent status itself.
By simply letting a green card expire, all the person is really doing is literally doing away with their the green card. They are not technically abandoning their legal permanent resident status.
For most people, easiest and most efficient method is either submitting a form I-407.
Permanent Resident Status Danger-Zone
Once a person has been a legal permanent resident for at least eight (8) of the last 15 years they may become subject to covered expatriate status.
That is because someone who has been a legal permanent resident for eight of the last 15 years is considered a Long-Term Resident (LTR) and an LTR is one of the two categories (along with being a US citizen) of people who will have to perform the three different test to determine whether they have covered expatriate status.
Since Michelle has a net worth upwards of $10 million – it can become a serious tax consequence.
Moreover, if Michelle does not take action before the eight year mark, she will lose the opportunity to conduct proper exit tax planning.
How are the Eight-Years Calculated?
The way that the language of law is written, the person does not seemingly need to have been a permanent resident for eight (8) full-years.
Therefore, even if a person was a legal permanent resident for a short period during the first-year and a short period during the eighth year, they may qualify as Long-Term resident even though technically they have not been a permanent resident for eight full years.
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.
