How An Expired Green Card Can Have US Tax Consequences

How An Expired Green Card Can Have US Tax Consequences

Expired Green Cards Still Have US Tax Implications

Sometimes, US taxpayers may realize that their Green Card is already expired — but they still need to travel to the United States. Even though they do not have a valid green card, they may still be able to travel if they have already applied for a green card on Form I/797 – – and received confirmation of processing and approval on a form I-90. It is important for Green Card Holders (Current or Expired) to understand the potential implications of traveling to the United States on an expired green card, even if a person has already received an I-90 – especially in situations where a taxpayer may have been out of tax compliance for several years, has not filed tax returns, FBAR – or a sailing permit.

Past Tax Compliance Issues?

Before applying to renew a green card that has already expired, taxpayers should realize that by doing so they may unwittingly be putting themselves in a tough spot with the Internal Revenue Service — if they have not properly filed taxes in one or more years. The concern becomes that a taxpayer is still required to file taxes as a green card holder, even if the green card is expired –– until the taxpayer formally expatriates by filing a form I-407.  Before filing a Form I-407, taxpayers have to be careful that they have complied with the necessary tax filing requirements because filing the I-407 equates to the expatriating act — and if they are considered a long-term lawful permanent resident then they may inadvertently become a covered expatriate simply by filing the I-407 if they meet one of the three tests.

Was an I-407 Filed?

If the I-407 was already filed, then the green card would presumably be relinquished and therefore the taxpayer usually has to go through the entire process again to obtain a new green card; in other words, it is not as simple as filing for renewal. That is because once the card is formally relinquished, the person loses their US person status as a green card holder – – but it also means they may qualify for the passport waiver program and/or a B1/B2 visa.

Apply for I-797 First

Tax consequences notwithstanding, if taxpayers have sufficient time, they should consider applying for green card renewal. That is because if a person’s green card has expired but no I-407 has been filed, then the concern becomes that the person is still considered a US person for tax purposes, which may impact their ability to obtain other travel visas such as B1/B2.

As provided by USCIS:

      • We are sending this reminder based on inquiries from the public. An employee that is a Permanent Resident may provide a Form I-797, Notice of Action with their expired Permanent Resident Card (PRC) for Form I-9.

      • There are two different types of Form I-797, Notice of Action, that an employer may accept for Form I-9:

          • A Form I-797, Notice of Action, receipt notice of Form I-90, Application to Replace Permanent Resident Card, with an expired PRC. This notice extends the validity of the PRC for 12 months from the “Card Expires” date on the front of the PRC. This combination of documents is an acceptable List A document that establishes identity and employment authorization and does not require reverification.

          • A Form I-797, Notice of Action, receipt notice for Form I-751 Petition, to Remove Conditions, with an expired PRC. This notice indicates that USCIS has extended the PRC validity.  This combination of documents is an acceptable List C document that establishes employment authorization and must be presented with a List B document that establishes identity for new hire. Employers must reverify the employee’s employment authorization before the extension ends.

      • For more information about acceptable documents, please refer to the I-9 Central Acceptable Documents or the Handbook for Employers, Instructions for Completing the Form I-9 (M-274).

Potential Travel/Tax Considerations

Even though a person may have already applied for a green card renewal and/or has a form I-90 — it may still result in potential issues at the port-of-entry, depending on whether or not the person is already in the system. But, just because a person is stopped and questioned at the port of entry does not mean anything will happen — it just means that the person should be prepared to give responses sufficient to allow them to go on their way and enjoy their travels.

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