Here is the scenario that this post is addressing:
An individual becomes a permanent resident of the United States (meaning that he has a Green Card). He lives in the United States for any number of years. He then moves away from the United States and returns to live in his home country. He is NOT aware that he must complete any specific steps (from either an immigration or tax perspective) to sever his ties with the United States.
He simply moves from the United States with the intention of no longer living permanently in the United States and:
1. Stops filing U.S. tax returns;
2. Fails to notify the State Department that he is abandoning his U.S. permanent residence.
While a resident of the United States he acquired significant pensions and IRAs.
Years later he reads an article in a newspaper that suggests that the United States still considers him to be subject to the full force of U.S. tax laws. Accessing the pensions will force him to file U.S. tax returns. He (as might be expected) is panic stricken and wonders what to do.
This is a very common scenario – what should he do?
The short answer is: it is completely dependent on the facts. This is one of the most difficult areas to advise in. The problem is that the person is likely to continue to be a tax resident of the United States and subject to all of the requirements of the Internal Revenue Code. The most appropriate response to this will depend on the interaction of a number of factors specific to the individual.
If you are in this situation, I suggest that you seek competent assistance sooner rather than later.
John Richardson – Follow me on Twitter @ExpatriationLaw