# Relinquishing US Green Card



## rtho100 (Oct 21, 2009)

Hello all,

Some advice needed here.

I am a British citizen and I married my wife 4 years ago and received my 10 year Green Card a little over 2 years ago. The main reason I got it was because I believed it would make life easier and because of my job make it a guarantee of being let into the country. I have built up a reasonable credit score, have refinanced the mortgage on my house and am essentially living the dream.

However, it's only just struck me recently just how much tax I'm paying and as a mariner, under the UK tax system i legally didn't have to pay any. Of course now I'm an American resident and taxed on my worldwide income. I work for 10 weeks and then I get 10 weeks off. I have no intention of getting a job in the US in the next 5 years and I thought that maybe I could relinquish my GC until a time whereby I change my mind. I would not have to pay tax anymore, and would not be too concerned about a credit score either. All I need is a B1/B2 (which I had before) to enter the U.S. for upto 6 months at a time in order to work on a boat in U.S. waters. 

I wanted to know whether or not I could do such a thing, and how it would be looked upon in the future if and when I wanted to reapply. As far as I know it would not change the terms in my mortgage or any other loans I have outstanding as long as I pay them which of course I would, but it would save me an enormous amount of money in taxation, health insurance and other unnecessary outgoings. Financially it would make sense, and I'll never be in the country for longer than the time on my visa. I'd have to look into car insurance though for my car in Florida and if push came to shove maybe I could rent long term.

I just wondered if anyone could provide me with some good advice in whether I should proceed or not with this idea. How hard would it be to reapply in the future having voluntarily relinquishing it and will it affect any other day to day activities, financial obligations that I haven't thought about.

Any thoughts or advice would be much appreciated.

Thanks in advance,

Rob


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## BBCWatcher (Dec 28, 2012)

rtho100 said:


> All I need is a B1/B2 (which I had before) to enter the U.S. for upto 6 months at a time in order to work on a boat in U.S. waters.


A couple separate questions:

1. Would this employment be a permitted activity under a hypothetical B-1/B-2 visa? (An immigration law question.)

2. Would this income still be U.S. source and thus subject to U.S. taxation? (A tax law question.)


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## BBCWatcher (Dec 28, 2012)

I think I'm going to answer my own question now -- at least the second one. 

Take a look at IRS Tax Topic 851. Having a green card is only one way to qualify as a resident alien for tax purposes. The other way is something called the "substantial presence test." It appears from your description that you would be treated as a resident alien with or without a green card because you would have a "substantial presence" in the United States, as defined in the tax code.

Being a resident alien is even stronger than determining whether that income is U.S. source or not. Even if you're a nonresident alien the income you describe might still be treated as U.S. source. But I don't think you even get that far.

So it would appear your tax idea doesn't work, but take a look at Tax Topic 851 to see what you think. If you think you would be classified as a nonresident alien, then take a look at whether your work aboard a vessel in U.S. territorial waters would be considered U.S. source income.

The immigration law question is also an important question.


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## Crawford (Jan 23, 2011)

I agree with BBCWatcher that your presence in the US determines whether or not you pay tax rather than the Green card itself. Also where is your salary paid and by whom?

Hubby and I lived in the US for two years before our Green cards were issued but paid taxes throughout that time.

I don't understand your comment about not paying health insurance. Again, whether or not you have a green card is immaterial as to whether you have health insurance. 

Personally, I would not spend a two week vacation in the US without medical insurance; being in the US for up to 6 months as you plan to do would make medical insurance vital as far as I am concerned.

I think you should consult a tax lawyer for definitive answers.


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## rtho100 (Oct 21, 2009)

Thanks for your replies.

Prior to getting my GC, I spent alternate 10 weeks working and then not working. Sometimes I was in the US and sometimes not. Given that I was a mariner I never actually paid tax in the UK (registered under sea-farers tax) and therefore continued not to pay in the USA until I got my GC. I am always paid by a company in the Cayman Islands, on a British flagged vessel with no ties to America. There is a limit to how long the vessel can stay in US waters for exactly the same reasons. ie. Tax. 

In terms of the B1/B2 visa, our profession requires us to carry this visa. The C1/D that cruise ship crew does not apply to us. I have held a 5 year and then subsequently a 10 year B1/B2 visa prior to my GC and relinquished the latter for the GC.

In terms of health insurance, I am covered in part when I'm working and prior to my GC I used the National Health Service. I have looked into plans that include the USA in their coverage and for a person my age (less than 40), I can be covered with the same out of pocket expenses as my current US plan. Unfortunately my current US plan is a pre-Obamacare plan that will run out in June, and I have been told that regardless of whether or not I change providers, my plan will double in price!

I understand that my circumstances I very different to most who have worked in a taxable entity, and maybe I should just suck it up and pay tax like everyone else. However, I freely came in and out of America, as a married man with a home in Florida on my B1/B2 visa with no intentions to work in the USA but decided to give it up and apply for a GC mainly because I might have got a difficult immigration officer who thought I'd might want to stay. 

So essentially, it would be best to seek advice from a tax specialist (should I consult my current CPA?) and maybe then an immigration lawyer regarding the longterm effects and any future bearing it may have regarding applying for another GC down the line? 

Thanks again. All good and interesting thoughts and advice and it is well received.


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## BBCWatcher (Dec 28, 2012)

Have you checked what policies and subsidies are available at Healthcare.gov?

In the limited research I've done it's quite apparent that the IRS thinks there's a lot of bad advice given to mariners on how they can avoid U.S. tax, so much so that it's a profession with greater scrutiny now.

To recap, you can be _deemed_ a resident alien for U.S. tax purposes even without a green card if you have a "substantial presence" in the United States. What you describe meets that test, so with or without a green card you'd be deemed a resident alien and subject to tax. So if your description is correct, you might as well enjoy the benefits of holding a green card (such as possible medical insurance subsidies) along with the obligations (taxes).

But even if you clear that hurdle, you then have to determine whether your income is "U.S. source" and thus still U.S. taxable. U.S. territorial waters are considered part of the United States, so (as I read it) you wouldn't clear that hurdle either to avoid tax.

There's also the fact that a B-1/B-2 does not guarantee you admission into the United States. It's possible, even likely, that CBP could turn you back if you exhibit a "heavy" travel pattern in the United States. That doesn't work so well when you're trying to keep job commitments.

So I'm not seeing how your idea is workable yet, but dig into it and see what you can find. I've probably given you a good start with the information on the substantial presence test.

I don't understand your comment about the NHS. The U.K. NHS does not provide any medical coverage in U.S. territorial waters, for example. The NHS doesn't even begin to provide adequate coverage for the travel and work pattern you describe.


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## rtho100 (Oct 21, 2009)

With regards to the B1/B2 visa I successfully travelled in and out of the USA on it for 3 solid years. I travelled with letters of employment, backing up my employment onboard and their responsibility to pay for anything that might be considered a "burden" on the welfare system. As mentioned before the boat pays for everything when I am onboard. 

In terms of taxation, registered under the seafarers scheme in the UK, I provided an annual tax return but because I was out of the country for more than 90 days a year I essentially paid nothing. I would like to know how the IRS could tax me on foreign income whereby essentially the boat is its own entity and when I'm home in the US I'm not actually working. No one came for my money before, so don't really no why the IRS would bother again particularly if I'm technically a tax payer in the UK under the seafarers scheme and I own a home that I could afford not to rent out and use it as my residence.

In terms of health insurance, I currently earn too much to qualify for Obamacare, and because if the latter my monthly payment is due to double. I have found an international policy that covers the U.S. registered as a seafarer and it's the same that I'm currently paying now.

I will speak to my CPA or perhaps someone else who I do t use to ask about taxation, but In terms of needing a GC after say 5-10 years would there be any problems because I voluntarily gave it up before? 

Thanks for your thoughts once again.


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## twostep (Apr 3, 2008)

My personal opinion - you opened a can of worms and cannot get them back in. You moved your center of life to the US and have been posting about your unhappiness with USA taxation for a while. Your UK tax situation was very beneficial for you. Going back to B1/B2 may work or may not work.


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## rtho100 (Oct 21, 2009)

That's a fair comment and I appreciate your honesty. I got a GC because I thought it would make life easier-which it has-but at a detriment to paying taxes. If you've never paid tax ( legally) it comes as quite a shock when you do. However nothing is really free in this world, and paying tax is often a certainty at some point and in the US it's not an enormous amount anyway. In terms of opening a can of worms, yes maybe you could call it that, but I did what I thought was right for my wife and our step-children. I think I could have stayed doing what I was doing without a problem, but it only takes one immigration officer to give you a bad time and the difference between being let in or not. Perhaps this is what I should keep in the back of my mind, before jumping off the Green Card ship.

With all the advice I have been given these last few days, it may be better to wait on giving anything up. I am certain however that I will not become a US citizen.

Many thanks again all.


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## BBCWatcher (Dec 28, 2012)

rtho100 said:


> I have found an international policy that covers the U.S. registered as a seafarer and it's the same that I'm currently paying now.


It may be "cheap," but you have to check whether that "international policy" is deemed to be "Minimum Essential Coverage" for purposes of your U.S. tax return. Most likely it isn't, and thus you'd likely be subject to the non-coverage tax penalty ("Individual Shared Responsibility Payment").

The non-coverage penalty for tax year 2015 is the greater of 2% of your income (above the filing threshold for your filing status) or $325. In tax year 2016 the penalty rises to the greater of 2.5% or $695.

Are you looking at the same Healthcare.gov? For reference, a 45 year old nonsmoker living in Miami who is completely ineligible for government subsidies can buy fully U.S. tax compliant medical insurance for $253 per month (for 2015, "Ambetter Essential Care 1"). I haven't read the fine print for that policy, and you should, but that's not what I would call expensive for proper U.S. medical insurance. If your premium is doubling then it's going from about $126 per month to $253 per month (at age 45), but what on earth were you getting for $126 per month? Probably really, really crappy insurance.

Look, you work on a boat. Accidents happen, unfortunately. You're constantly in motion, on the boat or to/from the boat. And you're living and working in the U.S. and its territorial waters. You need at least decent medical insurance, full stop.


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## rtho100 (Oct 21, 2009)

I currently pay $226 per month with Blue Cross Blue Shield for 5k out of pocket and that IS going to double in my market place to $470 per month. I can get an international policy (inc USA) with the same out of pocket for $250. I am 38 years old. I do not qualify for Obamacare because I earn too much. I then have to cover my wife and that is the same amount. 

Pretend that you did not pay tax, you are young and with 5k you can fly back home and be taken care of on the NHS. You have money left over to pay your wife/husband's medical insurance. Forget the healthcare issue. It's my choice as to whether I insure myself or not free from a GC. With a GC I'm imposed with double the crappy insurance or more than that if I don't insure myself. Honestly the health insurance is a side issue, but it adds to the frustration, hence why it makes less sense for me to have a GC.

I don't work in a 'normal' job, and I don't always spend 6 months in the US during a normal tax or otherwise year. I also never paid tax in the traditional way that that every other British tax resident did. I am however very appreciative of all that has been said in this thread. 

Health insurance and taxation aside, will it affect my ability to apply for a GC again later down the line? 

With thanks.


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## twostep (Apr 3, 2008)

rtho100 said:


> That's a fair comment and I appreciate your honesty. I got a GC because I thought it would make life easier-which it has-but at a detriment to paying taxes. If you've never paid tax ( legally) it comes as quite a shock when you do. However nothing is really free in this world, and paying tax is often a certainty at some point and in the US it's not an enormous amount anyway. In terms of opening a can of worms, yes maybe you could call it that, but I did what I thought was right for my wife and our step-children. I think I could have stayed doing what I was doing without a problem, but it only takes one immigration officer to give you a bad time and the difference between being let in or not. Perhaps this is what I should keep in the back of my mind, before jumping off the Green Card ship.
> 
> With all the advice I have been given these last few days, it may be better to wait on giving anything up. I am certain however that I will not become a US citizen.
> 
> Many thanks again all.


You have to set your priorities and the risks you are willing to take. No one can tell you which route to take. Consider the fact that Florida does not have state income tax. Yes, they get it elsewhere.

Double check these international insurances you mention a few posts further. Do they cover your specific situation - GC, center of life in the US?

Yes, it only takes one red flag!

Citizenship versus Green Card - it takes some of the inconveniences such as renewals out of the equation and has no impact on the UK side.


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## BBCWatcher (Dec 28, 2012)

rtho100 said:


> I currently pay $226 per month with Blue Cross Blue Shield for 5k out of pocket and that IS going to double in my market place to $470 per month.


What is the lowest priced bronze policy _from any insurance carrier_ available from Healthcare.gov for your marketplace?



> I can get an international policy (inc USA) with the same out of pocket for $250.


You can. It's unlikely that policy will satisfy the definition of "Minimum Essential Coverage," and consequently you would most likely have to pay a tax penalty. If, for example, your income above your filing threshold is $50,000 then you'd pay an additional $1000 in income tax for tax year 2015 just because you didn't buy a PPACA-compliant insurance policy.



> I am 38 years old. I do not qualify for Obamacare because I earn too much. I then have to cover my wife and that is the same amount.


Practically everyone qualifies for a PPACA-compliant medical insurance policy. You may not qualify for federal government _subsidies_ to help you buy that insurance.



> Pretend that you did not pay tax, you are young and with 5k you can fly back home and be taken care of on the NHS.


After a U.S. hospital saves your life (we hope) in an emergency, at great expense to somebody. Plus you're not ordinarily resident in the United Kingdom, the standard to be entitled to NHS care. So you're actually not legally covered there.



> You have money left over to pay your wife/husband's medical insurance. Forget the healthcare issue. It's my choice as to whether I insure myself or not free from a GC.


As mentioned way upthread, there are legal implications to certain choices. You asked whether your plan is viable, and you're getting answers explaining how U.S. tax (including medical insurance coverage implications) and immigration laws work. Please do your own research, but I don't think anything posted so far is inaccurate.



> Health insurance and taxation aside, will it affect my ability to apply for a GC again later down the line?


It could if you violate U.S. tax and/or immigration law(s).

Have you figured out a way to accomplish your stated, primary goal, avoidance of U.S. tax? The work and travel pattern you described way upthread means, according to the IRS information I provided you, you will still be subject to U.S. tax, with or without a green card.


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## BBCWatcher (Dec 28, 2012)

Regarding green card "hopping," I should also add that there are some other risks:

1. You lose your green card sponsor. If your wife dies, divorces you, or cannot qualify as your financial sponsor (while you do not have adequate savings), then it would be difficult or impossible to get another green card.

2. USCIS or the State Department might have new suspicions that your marriage is not genuine and durable when reapplying for a green card. You and your wife would then need to submit proof, if you can, to disabuse them of that notion. But it would be an entirely reasonable suspicion in the circumstances.


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## ForeignBody (Oct 20, 2011)

I would be extremely cautious about giving up your green card. Just think you may not be able to re-enter the USA at some point. What then for your wife and children and your life in the USA?

To think you can just fly back to the UK and get healthcare - you can't, for example, if you have a heart attack/accident and are in intensive care. In any event you are not ordinarily resident in the UK and therefore not entitled to NHS care.

I would urge you to get advice from an immigration attorney. Your situation is complex with serious implications for your future in the USA.


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## rtho100 (Oct 21, 2009)

Firstly a big thank you to BBCWatcher for the Healthcare advice. I can't get what I had before but a great website that I didn't really know about. Have PPO at mo, but given that I'm covered on the yacht and only ever really go home to Florida an HMO I think will be good. It's $150 cheaper than what my plan will goto. I see that I have to register before the 15th of Feb. my current plan is good til June. Can I not register then? Really don't understand healthcare here. Very confusing.

You misunderstood me regarding the "other" Healthcare Insurance. If I relinquished my GC then I would a that plan that would cover me in Europe & US. My fellow crew members use it and they are all British seafarers.

Regarding my GC. If my wife died/I got divorced I wouldn't need a GC! I'd probably sell up and go home. 

We do have plans however in 6 years once the kids have gone to university, to rent our home out in Florida during the winter (we live in the polo capital-by luck not judgement) and goto Spain. Obviously I could well be out of the U.S. long enough for my GC not to matter or for Immigration to complain about my lack of time in the US?

I think with all the great advice you have given me I'm just going to have to suck it up and get used to this whole taxation thing. I am lucky in Florida with no State Income tax so should count my blessings. I am sure however that I will live out my years in Spain/UK rather than the US. Both me and my wife miss the European culture. I basically got the GC as stated before for ease of life. I didn't need it for my job and I don't work when I'm at home. I guess it might come in handy if that were to change.

Really, really big thanks to all who contributed. Very appreciative indeed as always.


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## BBCWatcher (Dec 28, 2012)

rtho100 said:


> I see that I have to register before the 15th of Feb. my current plan is good til June. Can I not register then?


Not unless you have a change in status, e.g. move to another state. Annual open enrollment ends February 15th.

But if you're going to save money, why is that a problem? Enroll in the new policy, then cancel your old one when the new enrollment is confirmed for you and your wife.



> You misunderstood me regarding the "other" Healthcare Insurance. If I relinquished my GC then I would a that plan that would cover me in Europe & US. My fellow crew members use it and they are all British seafarers.


I didn't misunderstand you. From the work and travel pattern you described relinquishing your green card will have zero bearing on your U.S. tax status, it appears. Immigration and tax are not inextricably connected. You can walk across the border from Mexico or Canada with no documentation whatsoever and still be subject to U.S. tax jurisdiction. You can violate one set of laws, both sets of laws, or neither set of laws.

If you are deemed tax resident, with or without a green card, you may also be subject to Minimum Essential Coverage requirements. "International" policies rarely qualify as MEC.

The fact some other group of people might be violating one or more laws is not new information, especially to the IRS. All the way upthread I alluded to the fact that the IRS has found and continues to find all kinds of illegal U.S. tax evasion among mariners, sometimes at the encouragement of their fellow, misinformed or uninformed mariners. (A centuries old tradition, by the way.) That's why I urged you not to take my word for it but to dig into the laws and regulations. I can get you pointed in the right direction perhaps (e.g. Healthcare.gov), but it's important to read what the tax and immigration agencies themselves say. They're usually pretty clear.



> Regarding my GC. If my wife died/I got divorced I wouldn't need a GC!


And pull your children away from their friends and high schools? Or have little or no visitation? You _could_.



> We do have plans however in 6 years once the kids have gone to university, to rent our home out in Florida during the winter (we live in the polo capital-by luck not judgement) and goto Spain. Obviously I could well be out of the U.S. long enough for my GC not to matter or for Immigration to complain about my lack of time in the US?


No, it'd matter. You cannot live in the U.S. on a B-1/B-2 nine months out of the year, nor (separate issue) can you escape U.S. tax jurisdiction with physical presence in the U.S. nine months out of the year. If you want to move to Spain for tax reasons -- and why does that idea seem laughable on its face? -- then move to Spain. A couple weeks in the U.S. per year (for example)? No problem, though still only at the discretion of CBP unless you have citizenship or a green card. (A visa or visa waiver is only permission to be considered for entry, not entry.)



> I am sure however that I will live out my years in Spain/UK rather than the US.


Where there is generally higher taxation, as it happens. Are you beginning to figure out there's much more to life than taxes? 



> Both me and my wife miss the European culture. I basically got the GC as stated before for ease of life. I didn't need it for my job....


Actually you probably did if you didn't want to break the law (while others around you do, perhaps).

One more thing I should mention. Some rainy day take a look at the Expatriation Tax in the IRS's publications. You may want to be aware of when the Expatriation Tax applies (and what it is) if/when you decide to terminate your green card.


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