# FATCA / 8854 / I-407 - relinquishing Lawful Permanent Resident status



## Lived in USA

Hello,
I'm a UK citizen (by birth), and around 2010-2012, lived and worked in the US for just over 2 years, and had Lawful Permanent Resident status from being married (now divorced) to a dual UK/US national. I moved back to the UK in 2012 and have filed a 1040 every year since then. The 10 years on my green card has now expired. Assuming it hasn't already all "gone away", I'd like to relinquish all ties to the US for three reasons:

I Don't want to do a US tax return each year.
I Don't want to be 'caught' by the scary FATCA rules. I have over $10,000 in the bank (in the UK) and have not declared these savings to the IRS.
I want to be able to travel (for holidays) to the US without worrying about whether or not I'll be allowed in (a couple of years ago I visited New York for a holiday, and could not get an ESTA - presumably due to my status as being a 'kind of' US resident. I was travelling with my then-UK/US-wife, and after failing the palm-reader machine, spoke to one of the people at the desks and he allowed me in. A very stressful experience!)
I don't have over $2 million worth of assets, and I've never earned anything like the income tax amounts ($172,000 for 2021) listed on the instructions for form 8854. I don't have any savings/assets/business dealings with the US, and haven't done so since I moved back to the UK in 2012.

Am I right in thinking I should be able to fill in forms I-407 and 8854 (plus a 1040 for 2021 when this year ends) and it'd be very unlikely that the IRS would come after me for not declaring my >$10,000 savings? Should I first file form I-407 and then wait and see if the IRS subsequently asks for 8854 or do them both at the same time?

Thanks in advance for any help and suggestions!


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## Nononymous

You don't have much to fear from the IRS. I assume you have no US assets?

I hate to say this, but you could have stopped filing tax returns the moment you left the US, forgotten about your green card, and that would be the end of it. Don't mention US person status to your bank (which would otherwise have no ability to identify your American connection) and there's no FATCA to worry about.

Your green card became useless a year after leaving the US. You could file an I-407 and all the tax forms now (doesn't sound like it would be much work) or just an I-407 or do nothing. The outcome will be the same - the US government does not care about you.


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## JustLurking

Nononymous said:


> Your green card became useless a year after leaving the US. You could file an I-407 and all the tax forms now (doesn't sound like it would be much work) or just an I-407 or do nothing. The outcome will be the same - the US government does not care about you.


Yes. However, the US government may not care _now_, but it is always possible that if there's even the slightest whiff of money in it for them, no matter how puffed up or illusory in reality, they might start to pay attention _in future_. Exhibits A, B, and C would be FATCA, the soviet-style exit tax, and GILTI, all ginned up within just the past few years.

Given that the OP is up to date on US tax filings, and in particular taking account of the potential difficulties of visiting the US for a holiday with a 'lingering' green card, I'd say file the stupid paperwork to exorcise the IRS entirely. Lack of any US situated accounts or assets is excellent protection, but tying off loose ends permanently is better belt-and-braces.


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## Nononymous

I agree. In this case the OP has already done 90+ percent of the work by filing for the past decade, so why not finish the job?

I merely point out the tear-it-up-and-forget-about-it approach for the benefit of anyone else reading this who hasn't been filing. People in this position will sometimes panic and spend a small fortune on compliance to clean up an unrelinquished green card, which is completely unnecessary.


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## Lived in USA

Thank you @Nononymous and @JustLurking for your suggestions and confirming what I was hoping was the case! Once I've got the figures worked out in the new year, I'll do my 1040 plus the I-407 and 8854. I'll report back here with any updates in case it's of use to anyone else! I'm hoping the process will be straightforward, taking into account my diligently filed tax returns, zero US assets and length of time I've been out of the USA.

I'm hoping to visit California maybe sometime in the middle of 2022, so hope it's all sorted by then.


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## Nononymous

Tax issues should not prevent you from entering the US. I suspect that what happened a few years ago may have had something to do with your applying for an ESTA waiver while still in the possession of an expired green card - purely an immigration matter, nothing to do with the IRS. The folks at the border do not have any access to tax records.


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## Moulard

Indeed. In fact it sounds a bit like what happened is what my local consulate advised when my partner was investigating options related to a return to the US while still holding an expired greencard that had never formally been surrendered. Consular officials basically suggested, given the time-frames of the trip to apply for an ESTA and hand a completed I-407 to border officials on arrival. Except that on arrival the second half of it didn't happen or wasn't requested on arrival.


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## Lancashire_Lass

Hi - this was very interesting and useful. Thanks!
A couple of questions if I may? I am looking at relinquishing my GC later this year and retiring back to UK in preparation for a permanent retirement to France (in case anyone has any advice on the US>UK>France scenario for taxes). I will file a return in 2023 for 2022 including FBAR etc., but wanted to ask about subsequent years?
1. I have 2 401(k) accounts which I was going to leave in the US and draw a pension from. Do I still need to file 1040NR in that case? I am clueless as to how I should deal with them. Cash out and transfer to UK? But then would have a big sum to get taxed as income I thought so would leave here. 
2. I am also eligible for SS ( not a huge sum due to WEP) but worth having. How do people deal with tax reporting for that? I have three UK pensions plus UK SS that I believe I need to report to the SSAdmin. 
3. Any advice on best option for a brokerage account in US with HSBC? I was looking to leave here to increase as it is my house fund for 2024 FR house purchase but now worry I will end up stuck for CG in UK if I don’t file a 1040NR and get the tax credits?
Any advice? I had naively assumed that I would just relinquish, and then only pay UK tax on the 410(k) pensions and brokerage dividends without having to file in US? 
This may be really simple and I am over complicating but the IRS is scary and I would really like to make sure I do it right and if possible without giving Boris any of my hard-earned money!


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## Bevdeforges

If what you're giving up is a GC, then you have no further IRS reporting obligation once those final returns have been filed. As a "non-resident alien" (NRA) you will be subject to a 30% flat tax on all income remitted to you from the US - so technically it won't matter if you take the 401K in one big lump sum or a bit at a time each year. The US SS gives you a 15% allowance, so that 30% is applied to 85% of your benefit. If you arrange to have your US SS direct deposited to your bank account in the UK, the Consulate FBU will handle the tax withholding on it. (But I think US SS is taxed by the UK if it's being paid to a UK resident - check that in the tax treaty, or in the IRS publication on US SS benefits.)

Maintaining a brokerage account in the US with no US address may wind up being an issue. We have lots of reports here of brokerages closing out NRA accounts. If the brokerage firm does maintain your account, they may wind up having to withhold 30% on all remittances to you - though I don't know exactly how that works. Theory is that since you don't have any filing obligation, the IRS has to get its money at the source.


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## JustLurking

Bevdeforges said:


> If what you're giving up is a GC, then you have no further IRS reporting obligation once those final returns have been filed. As a "non-resident alien" (NRA) you will be subject to a 30% flat tax on all income remitted to you from the US - so technically it won't matter if you take the 401K in one big lump sum or a bit at a time each year.


You need to take tax treaties into account.

For the UK:
Article 17(1) of the US/UK tax treaty reserves taxing rights on regular pension withdrawals to the country of residence only. So a UK resident who is a US 'nonresident alien' and who receives payments from a US 401k or IRA has no US tax liability, only a UK tax liability. In that case, there is no requirement to file any US tax return at all. UK tax is at usual income tax rates.​​The treaty makes a special case of 'lump sum' distributions, though. Here, the US would have sole taxing rights, with the requirement to file a US 1040-NR return to recover any US tax over-withholding.​
For France:
Article 18(1) of the US/France tax treaty, as amended by the 2004 and 2009 treaty protocols reserve taxing rights to the country where the pension is paid from. So a French resident who is a 'nonresident alien' and who receives payments from a US 401k or IRA has only a US tax liability, not a French one. That is, the mirror image of the normal US/UK case.​​The US tax here will generally be lower than 30% though, since at least some, and perhaps all, of the payment will be US 'effectively connected income' and so taxed at US graduated rates. It is likely that for this case there will be a need to file a US 1040-NR return, since payer withholding is more or less guaranteed to be more than the actual US tax due.​
In every case there is likely to be a significant difference in tax between taking the entire pension as one huge lump sum or piecemeal. Typically, a lower tax burden overall if taken gradually over time.


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## Lancashire_Lass

Bevdeforges said:


> If what you're giving up is a GC, then you have no further IRS reporting obligation once those final returns have been filed. As a "non-resident alien" (NRA) you will be subject to a 30% flat tax on all income remitted to you from the US - so technically it won't matter if you take the 401K in one big lump sum or a bit at a time each year. The US SS gives you a 15% allowance, so that 30% is applied to 85% of your benefit. If you arrange to have your US SS direct deposited to your bank account in the UK, the Consulate FBU will handle the tax withholding on it. (But I think US SS is taxed by the UK if it's being paid to a UK resident - check that in the tax treaty, or in the IRS publication on US SS benefits.)
> 
> Maintaining a brokerage account in the US with no US address may wind up being an issue. We have lots of reports here of brokerages closing out NRA accounts. If the brokerage firm does maintain your account, they may wind up having to withhold 30% on all remittances to you - though I don't know exactly how that works. Theory is that since you don't have any filing obligation, the IRS has to get its money at the source.


Thanks Bevdeforges. I was thinking would need to file to be able to get my dividends etc taxed at correct rate. Although frankly if I could get it moved out of US jurisdiction in a cost effective way and then never have to file again that would be heaven 😀
I am with HSBC which is global so will pop along and check with my adviser there on their position re: expat holdings as I was also concerned about this. Will let you know once I get his answer as it may help someone else. I am also going to enquire about them opening me a French account - they did it for me for UK so hopefully would be the same for France. I know that I am not a citizen and will not be a GC holder later on but the principle may hold for Americans seeking to move to France and needing an account - they can change once established I would think once over that initial hurdle?


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## Lancashire_Lass

JustLurking said:


> You need to take tax treaties into account.
> 
> For the UK:
> Article 17(1) of the US/UK tax treaty reserves taxing rights on regular pension withdrawals to the country of residence only. So a UK resident who is a US 'nonresident alien' and who receives payments from a US 401k or IRA has no US tax liability, only a UK tax liability. In that case, there is no requirement to file any US tax return at all. UK tax is at usual income tax rates.​​The treaty makes a special case of 'lump sum' distributions, though. Here, the US would have sole taxing rights, with the requirement to file a US 1040-NR return to recover any US tax over-withholding.​
> For France:
> Article 18(1) of the US/France tax treaty, as amended by the 2004 and 2009 treaty protocols reserve taxing rights to the country where the pension is paid from. So a French resident who is a 'nonresident alien' and who receives payments from a US 401k or IRA has only a US tax liability, not a French one. That is, the mirror image of the normal US/UK case.​​The US tax here will generally be lower than 30% though, since at least some, and perhaps all, of the payment will be US 'effectively connected income' and so taxed at US graduated rates. It is likely that for this case there will be a need to file a US 1040-NR return, since payer withholding is more or less guaranteed to be more than the actual US tax due.​
> In every case there is likely to be a significant difference in tax between taking the entire pension as one huge lump sum or piecemeal. Typically, a lower tax burden overall if taken gradually over time.


Thanks for the info. This matches with what I surmised, but gives a lot more actual detail to support. My worry was if I take the whole lot it will get taxed at the upper tax bracket I am already on and that is now confirmed. Would have been great to take and move out of the US but I think it will be better to leave. Only possible caveat I read is that they may not be happy to work with an expat so will update if I hear they need to transfer to another company. I am with T Rowe Price and Hewitt. 
on another thought, what do people usually do with their HSA investments? I have saved into that thinking could use for medical anywhere but now not so sure. Maybe could buy my interim health cover in France before CV? Using it up as I am able but there will be some thousands left when I leave so don’t want to leave on the table…


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## JustLurking

Lancashire_Lass said:


> Only possible caveat I read is that they may not be happy to work with an expat so will update if I hear they need to transfer to another company. I am with T Rowe Price and Hewitt.


As one data point for you ... I still hold my Vanguard US account from when I lived and worked in the US (ex-greencard holder). It's not all peaches and cream. They won't let me use ETFs, only funds. No voice recognition. No checkwriting. Snail mail for several things that others can do online. And so on. But so far at least, I still have my 401k and IRA intact. I even have a Roth -- the US/UK treaty is good on Roths, but I suspect that the US/France one may not be, so Roths might not be for you.

As it happens, I end up having to complete a US tax return most years, but I can tell you from direct experience that a 1040-NR completed on a single source of US income is vastly easier than the overbearing collection of formery I used to deal with as a US resident. A bit of a pain, but nothing even close to the pain experienced as a US 'taxable person'. Ideally something to avoid, but not something to particularly fear. At least, not to the extent of hugely overpaying tax anywhere.



Lancashire_Lass said:


> 3. Any advice on best option for a brokerage account in US with HSBC? I was looking to leave here to increase as it is my house fund for 2024 FR house purchase but now worry I will end up stuck for CG in UK if I don’t file a 1040NR and get the tax credits?


You also asked this earlier. As a nonresident alien you would not be liable for US capital gains tax on US source gains, so you may be able to leave the US with unrealised and never taxed by the US gains here. The flip side though is that once a UK resident, the UK will cheerfully charge you capital gains tax on the entire period from purchase to sale, even though you were not a UK resident for most or even all of the holding period. I'm not sure about the French angle on this, but something to look into. Overall you'd get no treaty coverage on this I think, so it's down to normal domestic UK and French tax laws. Worth checking to see if you can find an angle on this; at minimum perhaps, would your capital gains tax be lower if realised before moving from the US to the UK, or afterwards?

One final note. Before ditching the green card, make sure that you are clear of the US's soviet-style 'expatriation tax'. It's an abomination that nobody should pay.


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## Lancashire_Lass

JustLurking said:


> As one data point for you ... I still hold my Vanguard US account from when I lived and worked in the US (ex-greencard holder). It's not all peaches and cream. They won't let me use ETFs, only funds. No voice recognition. No checkwriting. Snail mail for several things that others can do online. And so on. But so far at least, I still have my 401k and IRA intact. I even have a Roth -- the US/UK treaty is good on Roths, but I suspect that the US/France one may not be, so Roths might not be for you.
> 
> As it happens, I end up having to complete a US tax return most years, but I can tell you from direct experience that a 1040-NR completed on a single source of US income is vastly easier than the overbearing collection of formery I used to deal with as a US resident. A bit of a pain, but nothing even close to the pain experienced as a US 'taxable person'. Ideally something to avoid, but not something to particularly fear. At least, not to the extent of hugely overpaying tax anywhere.
> 
> 
> You also asked this earlier. As a nonresident alien you would not be liable for US capital gains tax on US source gains, so you may be able to leave the US with unrealised and never taxed by the US gains here. The flip side though is that once a UK resident, the UK will cheerfully charge you capital gains tax on the entire period from purchase to sale, even though you were not a UK resident for most or even all of the holding period. I'm not sure about the French angle on this, but something to look into. Overall you'd get no treaty coverage on this I think, so it's down to normal domestic UK and French tax laws. Worth checking to see if you can find an angle on this; at minimum perhaps, would your capital gains tax be lower if realised before moving from the US to the UK, or afterwards?
> 
> One final note. Before ditching the green card, make sure that you are clear of the US's soviet-style 'expatriation tax'. It's an abomination that nobody should pay.


Thank you! Sorry for the duplication, I wasn’t aware of having done so. At least I know now and will seek to find out the best option. As I don’t need to use it in UK then will look at ways of getting from US to France intact (or as close to). Whether that is cash it in now and push into an ex-UK account/ offshore/?? Or leave it. 
thanks again for the help and expertise. It is hugely reassuring to hear from people who have trodden the path before me and survived 😉


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## Bevdeforges

You may want to take a look over on the France forum. In the "sticky" post section (at the top of the list of posts) I recently posted links to the French Fisc's English language page where they have quite recently posted an information sheet about the taxation of investment income in France. You may be able to find some information there about your brokerage accounts and how they will be taxed in France. 








For the coming tax season...


Was checking the impots.gouv site to check on the latest version of the English language guide to French taxes (still 2016) when I stumbled over what looks to be a new English language guide that may be of interest to some of you here on the forum...




www.expatforum.com


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## Lived in USA

Moulard said:


> Indeed. In fact it sounds a bit like what happened is what my local consulate advised when my partner was investigating options related to a return to the US while still holding an expired greencard that had never formally been surrendered. Consular officials basically suggested, given the time-frames of the trip to apply for an ESTA and hand a completed I-407 to border officials on arrival. Except that on arrival the second half of it didn't happen or wasn't requested on arrival.


This is my exact same situation - in 2017, I booked a short holiday to New York. A couple of days before I was due to fly out, I thought "hmmmm....do I need an ESTA?" so went ahead and did the online application, only to be refused an ESTA (I assumed it was a line of code that says "IF PERSON = RESIDENT OF USA THEN ESTA = NOT RELEVANT. COMPUTER SAYS NO").

Cue lots of panicked phone calls to useless US embassies and immigration offices, who all basically said "nope, no ESTA, no admission, sod off". As you can imagine, with the flights and hotels all paid for, I was somewhat miffed. So, with nothing to lose, headed off to Gatwick and managed to get past the first hurdle - the guy with the laptop at the start of the check-in queue unique to American flights. Fast-forward several hours, the next issue was immigration. I plonked my passport and palm on the machine, and was given a printout of a big red "X" saying I needed to talk to one of the lovely immigration people. Saying as little as possible, I showed him my passport and green card, and he let me in. It may have helped that I was travelling with my then-wife (dual UK/US citizen). We have since divorced, so I'm concerned that my next trip (maybe sometime this summer 2022) won't be as straightforward - plus my green card has now expired.

Yesterday I thought I'd give the ESTA thing another go (I had to put "UNKNOWN" in the "where will you be staying?" boxes, so that might not have helped - maybe I should have picked a hotel at random) but, as before, I was refused, with no explanation of course.

I've now filled in an I-407, and am wondering whether to post it off with my expired green card, and wait for the supposed 2 months it takes to process, then I hope I could retry the ESTA process and the highly efficient and not-at-all bureaucratic US immigration system would have updated everything in a timely manner 🤣and I'd be approved to visit like a normal English person.

The other option would be to hang on to my I-407 and green card, not bother with trying the ESTA process again, fly over there, and then thrust the I-407 and green card into the hands of an immigration person and hope that does the job. Or will I be starting the first segment of my holiday sitting in some immigration pen for hours on end, waiting to be interrogated about why on earth any sane person would want to give up residency of The Most Bigly Great Country in the World?!

Any thoughts/experiences/advice would be most welcome!


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## Harry Moles

The person to whom I am married - Canadian, and back in the pre-ESTA days - was delayed once or twice by having had the green-card type stickers in her passport when she entered the US, renounced it on the spot at the immigration desk. I can't remember if she had the actual card with her, or the passport sticker was enough. Presumably she filled out an I-407. I would think that the following approach is reasonable: doing whatever you need to do to get on the plane, bringing an I-407 and the old green card with you, and budgeting some extra time for immigration grief upon arrival.


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## Jidc

Hello!
Were you able to visit the US this year? Did you get a response when you filed the I-407?
They received mine over 60 days ago and I still get my ESTA request rejected.

Thanks in advance.



Lived in USA said:


> Thank you @Nononymous and @JustLurking for your suggestions and confirming what I was hoping was the case! Once I've got the figures worked out in the new year, I'll do my 1040 plus the I-407 and 8854. I'll report back here with any updates in case it's of use to anyone else! I'm hoping the process will be straightforward, taking into account my diligently filed tax returns, zero US assets and length of time I've been out of the USA.
> 
> I'm hoping to visit California maybe sometime in the middle of 2022, so hope it's all sorted by then.


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## Lived in USA

Jidc said:


> Hello!
> Were you able to visit the US this year? Did you get a response when you filed the I-407?
> They received mine over 60 days ago and I still get my ESTA request rejected.
> 
> Thanks in advance.


I posted my i-407 (and green card) about a month ago and haven't heard anything - not even any kind of acknowledgement of receipt. They reckon it takes 2.5 months or something. Did you ever hear anything, @Jidc ?

I'm assuming there will be a whole load of aggro to go through before I can convince the retarded US authorities that I no longer want anything to do with the country (but might want to visit in future). I attempted to file my US tax return a few days ago, but the Free File Fillable Forms website that I usually use seems to be broken - there is no way to confirm my email address on their site because whenever I click "send confirmation code", nothing happens, despite me trying both my email accounts and thoroughly checking my spam folder. The instructions for that 1990s-style website advise me to "email the IRS" 🤣 if I have problems. Of course, there is no email address for the IRS. I tried phoning but gave up after being on hold forever.

I did, however, manage to use TurboTax to file an extension, which apparently gives me until October to file. Probably. (I also tried to use TurboTax to - successfully - fill in all the required forms, including using my UK address, then was scuppered at the final hurdle - ridiculously, it refuses to accept a credit/debit card that's not registered to a US address. WTF?! So I couldn't actually send the stuff to the IRS).

I have completely filled in and downloaded all the forms on the Free File Fillable Forms website, so in theory I could just print them out and mail them off to the IRS. But my ex-wife did exactly that last year, and they replied with a barrage of questions about the most minute details of her income; I'd rather avoid all that - even though my income is all entirely legit.

I guess I'll just wait for another month or so, then try - presumably in vain - to contact the antiquated, bloated behemoth that is the US government, and plead my case to be treated as a bog-standard tourist.


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## Lived in USA

Ha! A few days later, I tried getting a password reset code from the Flintstones-era website (why does America just not "get" the internet?!) and lo and behold - someone had presumably fixed the issue, and I received the code! So I went ahead, fixed the problems outlined in the amusingly ridiculous error codes that the IRS sends out when it's not happy with the numbers, resubmitted it, and miraculously it was accepted! 🎉🎊 So now I just play the waiting game on the unlikely off-chance that the immigration people contact me and say "hey! You're not connected to America any more!"


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## Lived in USA

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 Resident status on the "Received Date" listed above."_

...which kinda probably looks like I might possibly have reached the hallowed status of Officially Not An American Any Longer! Or maybe they've just recorded that I _want_ to abandon my Americanness, and they will just think about it for a while. I shall test it out soon by applying (again) for an ESTA and seeing what happens.


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## Mcflymet

Lived in USA said:


> 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 Resident status on the "Received Date" listed above."_
> 
> ...which kinda probably looks like I might possibly have reached the hallowed status of Officially Not An American Any Longer! Or maybe they've just recorded that I _want_ to abandon my Americanness, and they will just think about it for a while. I shall test it out soon by applying (again) for an ESTA and seeing what happens.



Hi, 
Did you get any further emails from them ? And from which email ID did you receive it as I would like to ask them for the status of my I-407, it has been a little more than 3 months and there is still no email or mail
Thanks


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## Lived in USA

Mcflymet said:


> Hi,
> Did you get any further emails from them ? And from which email ID did you receive it as I would like to ask them for the status of my I-407, it has been a little more than 3 months and there is still no email or mail
> Thanks


I have not received anything further from them. The email address was (unhelpfully, and slightly bizarrely):
[email protected]
...which is why I was initially very suspicious. WTF kind of email address is that‽


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## Lived in USA

Just to add: I have not yet tried to apply for an ESTA again, so have no idea if that would actually work now or if I'd be refused like before.


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