# Abandoning the green card



## JoeTheYellow

First of all, let me say big thank you for all bighearted people on this forum for helping strangers in what sometimes can be a very distressing situation.

After reading a lot of different stories here I wanted to ask you for advice on how to proceed with my particular case.
So I think I might consider myself sort of accidental American since I'm a green card holder since approximately 1991 (issued when I was 3 years old, I was born in EU country and have EU county citizenship). For all those years I’ve been living, studying and working in EU and visiting the US briefly every 10 years to renew my green card, say hello to my family there (grandparents) and have a nice US vacation. For all this time I was completely oblivious to the fact that I might have any tax obligations in US and I considered having a green card as something that could be useful if I ever decided to work or live in the US. Now I find such scenario very remote and therefore I have no interest in maintaining my green card but at the same time I would strongly prefer to have a clean sheet (don’t become a covered expat.) after giving it up. I earn nowhere near the threshold for FEIE and I have virtually no interest income or capital gains, etc. so I’m sure I don’t owe any money but on the other hand, I’m certainly not compliant. So I think these are my options:
a. Do nothing –The easiest thing would be to stay under the radar but I’m afraid that during some future visit to US I might have problems on the border due to my green card holder status. Customs usually ask a lot of questions about it, and if they feel like it, they can deny entrance or cancel my GC all together (and I would then have only one year to fix my compliance issue if I wouldn’t want to get covered expat status). Being in this situation indefinitely is also something I wouldn't feel easy about.
b. File I407 along with my green card + next year file Form 8854 (while never filing any US tax return)
c. Take part in streamline procedure, file tax return for the next two years and later point b.
At this point, I did the homework regarding streamline, and I would feel confident enough to do it by myself, however, there is always a risk that I would do something wrong.
After searching through the internet a lot I’m still not able to decide which of those 3 options is the best.


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## JustLurking

JoeTheYellow said:


> After searching through the internet a lot I’m still not able to decide which of those 3 options is the best.


Compared to many, at least you appear to have a decent choice of options. As far as I can tell, while they vary dramatically in the amount of hassle you have to endure, none of them seem to end up with you owing any actual tax to the US (which makes things all the more ridiculous, but that's US tax law for you).

There are some tax traps that the US sets that could catch you out, even though you say you have no interest or capital gains -- things like tax on phantom currency gains, retiring a foreign mortgage, foreign insurance excise tax, and so on -- so you'll want to be sure that your analysis is full and accurate before doing anything that puts your head in the lion's mouth, but it could indeed well be that you have no actual US tax liability over the past.

At a minimum I would probably file the I-408 and ditch the green card. That way, while you don't erase any past issues you certainly prevent anything more accruing in the future. I assume you will be able to easily obtain an ESTA for your visits, and that visa-less visit lengths will suffice.

Beyond that, provided it generates no actual tax for the IRS, I'd just do whatever tax paperwork cleanup lets you sleep at night. Anything from full streamlined to nothing at all. There may be a remote possibility of it becoming hard or impossible to even visit the US with no tax cleanup, perhaps particularly the 8854 making you a potential 'covered expat', but if you can live with that remote possibility, and especially if (as sounds the case) you don't hold any assets in the US, the IRS can threaten all it likes but it is powerless to do anything more than this. 'Covered expat' is a paper tiger if you have no money, assets or income in the US and if you do not plan to give or bequeath significant money to a US citizen or resident.

As for worrying about doing streamlined or anything else wrong ... meh. Unless you are a closet millionaire (and even then, only if those millions are visible to the US), then as long as the numbers on the forms add up correctly, I doubt the IRS spends any time at all on these things. They are as aware as you and I of just how valueless these 'nil' returns really are.

So no financial impact, just a risk-based assessment based on your tolerance for entirely pointless US bureaucratic busywork. Strictly speaking, because you no longer live in the US your green card is already very likely to be judged 'invalid' for immigration purposes anyway.


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## Bevdeforges

Technically speaking, your green card lapses if you leave the US (i.e. do not actually reside there) for a significant period - usually defined as 6 months to a year. I'm actually a little surprised that you have been able to just drop in to the US to renew your Green Card. It's not supposed to work that way - and I know folks who did something similar and then found on their return one time that they were no longer considered a Green Card holder. Had to start all over again in the process in order to move back to the US (with an American spouse) all the same.

So basically, give up the Green Card and let go of plenty of hassles. The IRS doesn't necessarily let you off the hook just for surrendering the card, but given that you really haven't been resident in the US all this time, I kind of doubt they're going to come after you at this point.


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## JoeTheYellow

Thank you for your advice. 



> Technically speaking, your green card lapses if you leave the US (i.e. do not actually reside there) for a significant period


That is correct, in practice, however, my experience shows that whether you resided there or not (making your GC invalid) is usually determined solely based on an assessment done by the customs officials during border crossing. Nevertheless, I discourage anyone from this kind of careless approach unless you really have nothing to lose. I think that is how it was in my case. Ramifications of they not letting me in didn’t seem that bad at the time and so I didn’t really care that much. Usually, when you don’t worry too much, things tend to go as planned.

Currently, I’m worrying a little bit more so actually I don’t really mind doing all this tax paperwork. Actually, I’ve already spent quite some time on it. The thing is: I’m not sure whether accidentally I wouldn’t make my situation worse by taking part in streamline or filing 8854. Reading this forum I have the impression that the general advice is: 
If you have never been part of US tax system, renouncing is not a good reason to enter and begin filing.
I’m now leaning towards option B. I only wonder whether certifying that I’m compliant while I haven’t filed a single tax form to IRS wouldn’t automatically make me covered expat. After all, it is quite easy for them to check whether there are my tax returns or not. On the other hand, they have no means to verify that I earned more than filing obligation threshold.


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## Bevdeforges

> If you have never been part of US tax system, renouncing is not a good reason to enter and begin filing.
> I’m now leaning towards option B. I only wonder whether certifying that I’m compliant while I haven’t filed a single tax form to IRS wouldn’t automatically make me covered expat.


I have a feeling that you are confounding holding a Green Card with being a US Citizen. As a Green Card holder, you don't "renounce" anything. You just turn in the Green Card because you are no longer resident in the US. You wouldn't have to file a form 8854. 

I know someone who just kept renewing her green card while living outside the US with her US citizen spouse. Yes, they generally waved her through the line on entry, but eventually they "caught" her. Still let her into the country that one time, but indicated that her Green Card was no longer valid and next time she would have to sign up for an ESTA registration, etc. As it turns out, she and her husband were moving back to the US, so they went the full route of re-applying for a Green Card for her and it all went pretty smoothly.

But on the tax front, even if you were a citizen and went to renounce, they simply ask you if you're up to date on your taxes. Friend of mine who recently renounced just ticked "yes" although she hadn't filed US taxes for years. (In her case, it's a moot point whether she should have been filing or not - but in any case, she certainly didn't owe any taxes.) Nothing ever came of it.


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## Nononymous

So I am a bit surprised you've managed to keep the green card alive all these years, but that's the US for you, not so organized. Once you've been out for a year, technically you're supposed to have lost the thing.

Anyway, you can do one of two things about the green card. Option 1: do nothing, just let it lapse, next time you enter the US just do the ESTA waiver and use your EU passport. Option 2: file an I-407 to relinquish it formally.

I would not worry about the taxes. Don't bother with streamlined, just ignore the whole situation. Green card relinquishment is an issue for those who've worked in the US and then departed, but who have assets or retirements savings left behind. For you, never in the system, no reason to enter the system. The IRS does not know that you exist. They aren't going to follow up on a long-dead green card. 

Presumably you've been wise enough to not identify yourself as a US person (a green card holder) to any European bank or financial institution, so you are not being reported under FATCA?

Covered expatriate status is largely meaningless, by the way. Only a problem if you planned to give or bequeath money to a US taxpayer.

PS on edit: I'm not sure why you think it's a good idea to file an 8854 that certifies you as compliant while you've not been filing returns. That's basically perjury, though I take your point that they have no information about you other than what you supply, so they have no reason not to believe that you earn no income and are not obliged to file. Nevertheless, my instinct would be either do it properly (streamlined and all that, with FBARs) or do nothing at all. Nothing is likely to happen either way, but why expose yourself by submitting something deliberately untrue?


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## JustLurking

Bevdeforges said:


> I have a feeling that you are confounding holding a Green Card with being a US Citizen. As a Green Card holder, you don't "renounce" anything. You just turn in the Green Card because you are no longer resident in the US. You wouldn't have to file a form 8854.


Unfortunately, that's not the case. When it comes to its execrable 'expatriation tax', the US conflates eight years(*) of holding a green card with US citizenship, and calls both 'expatriation'. More here (emphasis is mine):


> Expatriation tax provisions apply to U.S. citizens who have relinquished their citizenship _and long-term residents who have ended their residency_ (expatriated). This form is used by individuals who have expatriated on or after June 4, 2004.



(*) Potentially as little as six years and two days, because of the perverse way the IRS counts 'years' for this eight-year test.


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## Nononymous

None of this should be an issue for a green card holder who was never in the US tax system. They can safely ignore.

It's a huge cautionary tale for someone moving to the US however. If you ever intend to leave, avoid the green card and use the appropriate visa instead.


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## JustLurking

Nononymous said:


> None of this should be an issue for a green card holder who was never in the US tax system. They can safely ignore.


Oh, absolutely. I was just clarifying that the OP got the details correct when considering that under full compliance, form 8854 would indeed apply to them.

When the IRS uses a word like 'expatriation', it mean just what they choose it to mean, neither more nor less.


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## JoeTheYellow

Regarding the fact that I was able to maintain the green card. I know it shouldn’t work like that and I think I was just lucky. To be honest, I regret it. It has helped me too much and now it is a source of certain anxiety. 
Regarding my obligation towards US tax system. My understanding is that if you have a status of long term permanent resident (as defined below) then (from the tax perspective only) you fall under the same IRS rules as fully-fledged US citizen. I’ve tried to understand many times whether I really am a “long term” but I’ve never been able to say for 100% so I assume I am. The definition is very confusing to me. From an immigration perspective “long term” status doesn’t change anything. It’s way easier to get rid of GC then citizenship (basically only I407).
A long-term resident is someone who: 


> “is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the [expatriating] occurs.”


is a lawful permanent resident of the United States in at least 8 taxable years during the period of 15 taxable years ending with the taxable year during which the occurs.

Regarding becoming covered expat, I’m not concerned about the financial aspect but rather some adverse immigration-related consequences that I might face in the future. The main concern is that in two or three years I will be denied entrance during some short, tourist or business visit.
Regarding filing I407 to formally relinquish for immigration purposes. I think it is a good idea in my case because (as pointed out by JustLurking) it prevents anything more accruing in the future. My financial situation is simple now but it’s very likely to change in foreseeable future so I want to make a cut now.
But the question for me was: how to make a cut with IRS (I don’t mind doing the paperwork that much as I’ve already spent a lot of time on it). 
• Do nothing – risk of becoming a covered expat, but it seems that is what most of you recommend. So it might be that I have never been part of US tax system, therefore, I don’t have to make a cut at all. But for this one, please check post scriptum as a was actually been working in US.
• Only 8854 – seemed to be the best option but I don’t feel comfortable with that one due to what Nonymous described two posts earlier.
• Do it properly via streamline – I’m basically breaking the unwritten rule/advice of not entering US tax system for the relinquishing/renouncing purpose only.

P.S.
Just to clarify my situation better. I currently have nothing at all in US. I have never reported anything under FATCA and any bank or financial institution hasn’t had any reason to think that I might have something to do with US. I was in US three of four times (maybe more but I was too young to remember). Roughly ten years ago (when I was still a teenager) I’ve been legally working over a period of two months during a three-month visit to US. Certainly, I haven't earned enough to be obliged to file a return. That was also my longest stay in US during which I’ve got a driver’s license and opened US bank account (closed remotely roughly year ago).

Once again thank you all for your opinion. It helps a lot.


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## Nononymous

I would either file an I-407 or just let the green card lapse, but I would do nothing on the tax front. 

I think you assume too much cleverness on the part of the US. Immigration does not check tax status on point of entry. Working a few months as a teenager doesn't mean you'll be flagged decades into the future. For example, I'm a dual US-Canada citizen with a US birthplace. I lived in the US for five years, working and studying and filing tax returns. When I returned to Canada two decades ago, I stopped filing. Since then I've entered the US almost exclusively with a Canadian passport, showing US birthplace, and only once have I been told to use a US passport (advice which I have repeatedly ignored, without any trouble). The point being, they don't exactly have their **** together. Covered expatriate status is meaningless. 

That being said, you can never predict with certainty that you won't one day be denied entrance to the US. The only way to guarantee entry is to become a citizen. If anything it's probably best to be rid of an "invalid" green card because there will be fewer questions.

However, if it makes you sleep nights you can do the I-407 and file some very simple returns and FBARs if you meet the threshold, and an 8854. (Note that it's 5 years returns needed so more than just the 3 for streamlined.) You'll owe nothing and can probably handle the paperwork yourself. Key point is, with a non-US passport and birthplace you really don't need to worry.


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## JoeTheYellow

I will file only I-407 then. I think the problem is in my head. Instead of listening to common sense I’m worrying about some unlikely scenarios. Thank you a lot for support.


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## Nononymous

Another potential victim snatched from the jaws of the compliance industry.


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## Lived in USA

JoeTheYellow said:


> I will file only I-407 then. I think the problem is in my head. Instead of listening to common sense I’m worrying about some unlikely scenarios. Thank you a lot for support.


Hello @JoeTheYellow. Digging up a post from a couple of years ago:
I'm interested to hear how your filing of i-407 and relinquishing your green card went. I filed an i-407 and sent off my expired green card (I lived in the US from 2010 - 2012) about 6 weeks ago, and am wondering if I'll hear anything from the US or what happens next.

I'm hoping to travel (on holiday) to the US later this year, and would like to be able to do so just like an ordinary English tourist using an ESTA. A couple of months ago I applied online for an ESTA and was denied. The last time I travelled to the US was about 3 years ago; I was also denied an ESTA on that occasion, presumably due to me having a sort-of-valid green card, but just got on the plane and showed by green card, which they seemed to be reasonably happy with.


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## Lancashire_Lass

Lived in USA said:


> Hello @JoeTheYellow. Digging up a post from a couple of years ago:
> I'm interested to hear how your filing of i-407 and relinquishing your green card went. I filed an i-407 and sent off my expired green card (I lived in the US from 2010 - 2012) about 6 weeks ago, and am wondering if I'll hear anything from the US or what happens next.
> 
> I'm hoping to travel (on holiday) to the US later this year, and would like to be able to do so just like an ordinary English tourist using an ESTA. A couple of months ago I applied online for an ESTA and was denied. The last time I travelled to the US was about 3 years ago; I was also denied an ESTA on that occasion, presumably due to me having a sort-of-valid green card, but just got on the plane and showed by green card, which they seemed to be reasonably happy with.


Hi. Did you manage to get the ESTA this time? Hearing from both sides - some do and some don’t. I am giving up my GC in a couple of months and might want to travel back here to see friends etc so wanted to know if it seemed reasonable.


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## Lived in USA

Hello @Lancashire_Lass . I've (probably) completed the "I'm no longer American" process, but have not yet tried to get an ESTA. Here's the entirety of my 'journey', discussed in another thread in this forum:








FATCA / 8854 / I-407 - relinquishing Lawful Permanent...


OoooOOOoooh - an update! On Friday I received an email, saying: "You are receiving this email message as a courtesy to confirm USCIS received your Form I-407, Record of Abandonment of Lawful Permanent Resident Status, and recorded your voluntary abandonment of your U.S. Lawful Permanent...




www.expatforum.com


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## Lancashire_Lass

Lived in USA said:


> Hello @Lancashire_Lass . I've (probably) completed the "I'm no longer American" process, but have not yet tried to get an ESTA. Here's the entirety of my 'journey', discussed in another thread in this forum:
> 
> 
> 
> 
> 
> 
> 
> 
> FATCA / 8854 / I-407 - relinquishing Lawful Permanent...
> 
> 
> OoooOOOoooh - an update! On Friday I received an email, saying: "You are receiving this email message as a courtesy to confirm USCIS received your Form I-407, Record of Abandonment of Lawful Permanent Resident Status, and recorded your voluntary abandonment of your U.S. Lawful Permanent...
> 
> 
> 
> 
> www.expatforum.com


Thank you! I am sorry, I hadn’t put the two together so thanks for the pointer. 
Hope it goes well when you apply for the ESTA - it is a minefield I know how the juggernaut of US bureaucracy is difficult to deal with .


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