# Form 1040NR, etc.



## lux83 (May 20, 2016)

Hello all. 

I have put myself into quite the panic while reading about leaving the U.S.A., so it's time to register and ask some questions. I appreciate any help I can get.

My situation is as follows. I won a USA green card in the DV lottery in 2008 and officially entered the USA in 2009. I received my actual green card in February 2009. In November 2012, I left the USA and returned to my homeland of Australia, where I have been ever since. I have no intention of moving back to the USA.

I have filed taxes for the tax years: 2009, 2010, 2011, 2012, 2013, 2014 and 2015. However, I recently received a notice from the IRS that my 2015 could not be processed due to some missing information.

This finally prompted me to get on with the act of giving up my green card, but of course, I am very confused.

As far as I can tell, my first step is to file form I-407. I am planning to do that next week, although my local embassy doesn't accept the form, so I actually have to send it to Thailand.

The questions I have are regarding what comes after that:

1. Do I still need to finalise my 2015 tax return? (i.e. provide the missing information)

2. Do I need to file form 8854? I assume since I was out of the USA for 2013, 2014 and 2015 in FULL, that I don't meet the long-term resident criteria? 

Any answers (or other advice) would be hugely appreciated.


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## JustLurking (Mar 25, 2015)

lux83 said:


> As far as I can tell, my first step is to file form I-407. I am planning to do that next week, although my local embassy doesn't accept the form, so I actually have to send it to Thailand.


Yes. The I-407 stops the clock ticking on any future US tax liabilities or issues.

Having to send it to Thailand is weird and obstructive, but apparently true according to the US consulate pages for Australia. In practice you'd want cast-iron proof of delivery for those occasions when the USCIS "loses" things. I suspect that might be hard to accomplish across borders. Maybe see if they can offer other options?



lux83 said:


> 1. Do I still need to finalise my 2015 tax return? (i.e. provide the missing information)


I'd assume so. Nothing about filing I-407 in 2016 changes your 2015 status.



lux83 said:


> 2. Do I need to file form 8854? I assume since I was out of the USA for 2013, 2014 and 2015 in FULL, that I don't meet the long-term resident criteria?


Being out of the country doesn't count as non-residency. Counter-intuitive of course, but this is the US, and green card holders are 'permanent residents' even if not actually resident (also not always entirely 'permanent', since if you spend enough time outside the US your card can become invalid for re-entry). I believe that makes you a US permanent resident for 2009 to 2016 inclusive, so eight years. Even one day in a particular year makes the whole year count, because of the odd way the US counts years.

What you really want to avoid is 'covered expatriate' status. If you're in _any_ danger of that you want specialist help. Ideally you would have ditched the green card some years ago and well before being considered 'long term' to make for a cleaner exit, but this is probably water under the bridge now.

One thing to look at is have you claimed any tax treaty benefits (form 8833) on your US returns since returning to Aus in 2012? Maybe something of a long shot but if yes, this can be taken as de-facto termination of a green card, and that might work to your advantage here to get you under the eight year definition of 'long term'. Just a thought. Check out instructions for form 8854 for the nuances.

Otherwise you file 8854 with your 2016 return. Make sure to read the part of the 8854 instructions specifically for after June 16 2008, because a lot changed then. Don't forget that you have to send copies of the 8854 to _two separate IRS offices_ yourself. The IRS is sufficiently disorganized that it requires you to do its internal communications for it. Again, details in form 8854 instructions.


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## JustLurking (Mar 25, 2015)

One other thought -- really "Form 1040*NR*, etc."?

Until you drop the green card you're still officially resident, so you should be filing plain old 1040's with all the trimmings -- 2555 and so on -- up until filing I-407 (or some other defining termination event). For 2016 you then file a dual-status return, possibly comprising both a 1040 and a 1040NR, the latter for for the non-resident portion of 2016.


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## lux83 (May 20, 2016)

JustLurking said:


> Being out of the country doesn't count as non-residency. Counter-intuitive of course, but this is the US, and green card holders are 'permanent residents' even if not actually resident (also not always entirely 'permanent', since if you spend enough time outside the US your card can become invalid for re-entry). I believe that makes you a US permanent resident for 2009 to 2016 inclusive, so eight years. Even one day in a particular year makes the whole year count, because of the odd way the US counts years.
> 
> What you really want to avoid is 'covered expatriate' status. If you're in _any_ danger of that you want specialist help. Ideally you would have ditched the green card some years ago and well before being considered 'long term' to make for a cleaner exit, but this is probably water under the bridge now.
> 
> ...



Thank you so much for your help.

A few quick thoughts. As mentioned, my 2015 return has not been accepted, due to missing information. I have since realised I completed it wrong and will end up owing some money after all. Given that I am going to have to amend my return, is there now an option for me to avoid the whole long-term resident thing? 

For instance, could I file form 8833 with the amended return? Or could I file 1040NR instead of a 1040?

I read somewhere that "failing" to file an 8833 can result in a fine. Should I have been filing this all along? Am I now liable for that fine?

I still plan to send off the I-407 with my green card ASAP.

In terms of becoming a covered expatriate, if my understanding of everything I have read is correct, I am far away.. I have basically no money, no assets, no income. I'm hoping that should keep me very, very exempt.

Again, I appreciate any and all help.


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## JustLurking (Mar 25, 2015)

lux83 said:


> As mentioned, my 2015 return has not been accepted, due to missing information. I have since realised I completed it wrong and will end up owing some money after all. Given that I am going to have to amend my return, is there now an option for me to avoid the whole long-term resident thing? For instance, could I file form 8833 with the amended return? Or could I file 1040NR instead of a 1040?


In other words, can you 'retroactively' get rid of the green card by claiming treaty benefits on an amended return?

An excellent question, and I don't know. I _suspect_ not because there is often an 'if timely filed' rider in these things. From what you've said below, though, it seems all you would save is a bit of form-filling but no _actual tax liability_, so unless you have other motivations then (if it were me, I would) just take the straightforward route. Filing an 8854 is a clear and unambiguous statement of termination.



lux83 said:


> I read somewhere that "failing" to file an 8833 can result in a fine. Should I have been filing this all along? Am I now liable for that fine?


Shouldn't be. The 8833 really only goes with a 1040NR, and you should have been filing vanilla 1040s up to now. The US goes to some length to ensure that its citizens and LPRs living abroad can't actually use most of the tax treaties it has signed anyway, so it's hard to use anyway. (The culprit here is the 'saving clause' -- congress is much keener to _sign_ treaties than it is to _abide_ by anything in them.)



lux83 said:


> I still plan to send off the I-407 with my green card ASAP.


Good plan. Keep careful records of dispatch and delivery. You should get a stamped/signed receipted copy back from the consulate reasonably quickly -- something nice to frame and put on the lavatory wall there, then. A few folk have reported never receiving anything back, though, which is why you want to be double-careful to keep records. Ideally you'd take it in personally, but that's not going to be convenient here, clearly.



lux83 said:


> In terms of becoming a covered expatriate, if my understanding of everything I have read is correct, I am far away.. I have basically no money, no assets, no income. I'm hoping that should keep me very, very exempt.


It should. Dealing with the US exit tax is one of those areas in life in which being relatively asset-poor is a massive advantage.

Anyway, get on and ditch the green card now, and before things like the exit tax and proposed nonsense such as the 'expatriot act' become even worse, would be my advice.


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## lux83 (May 20, 2016)

JustLurking said:


> It should. Dealing with the US exit tax is one of those areas in life in which being relatively asset-poor is a massive advantage.
> 
> Anyway, get on and ditch the green card now, and before things like the exit tax and proposed nonsense such as the 'expatriot act' become even worse, would be my advice.


Again, I truly appreciate your help. What a mess!

Just to be clear, can I confirm these are my next steps:

1. Ditch green card ASAP, making best efforts to confirm receipt, etc.
2. In meantime, amend 2015 tax return and re-file.
3. In early 2017, prepare 1040 (for pre-green card ditching) and 1040NR (for post-green card ditching) and file 8854 along with them.


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## BBCWatcher (Dec 28, 2012)

The "long-term" threshold requires at least 8 years. It appears Lux83 just crossed over that particular line on January 1, 2016, if I'm reading the instructions to IRS Form 8854 correctly. So yes, that is "water under the bridge."


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