Coming to America? A space for those planning for a Green Card, living with a Green Card or wanting to abandon your Green Card … https://t.co/QSSwLukN1E
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 21, 2020
From a US immigration perspective your permanent resident visa AKA Green Card is valid only as long as you maintain the intent to live permanently in the United States. This is not tied to the renewal of the Green Card itself. The failure to renew that actual Green Card is not determinative of your immigration status and is completely irrelevant to your status as a US tax resident.
To put it simply:
It is possible to have lost the right to live in the United States from an immigration perspective but still be treated as a US tax resident and be subject to US worldwide taxation. Hard to believe, but true.
Internal Revenue Code 7701(b)(6) prescribes how a Green Card holder severs tax residency with the United State as follows:
(6)Lawful permanent resident
For purposes of this subsection, an individual is a lawful permanent resident of the United States at any time if—
(A)such individual has the status of having been lawfully accorded the privilege of residing permanently in the United States as an immigrant in accordance with the immigration laws, and
(B)such status has not been revoked (and has not been administratively or judicially determined to have been abandoned).
An individual shall cease to be treated as a lawful permanent resident of the United States if such individual commences to be treated as a resident of a foreign country under the provisions of a tax treaty between the United States and the foreign country, does not waive the benefits of such treaty applicable to residents of the foreign country, and notifies the Secretary of the commencement of such treatment.
“Long Term Residents” who abandon the Green Card may be subject to the US 877A Expatriation tax!
The following video features a discussion of Green Card abandonment and how it interacts with the US Exit Tax.
Gary @Clueit in conversation with @IRSMedic and @Expatriationlaw makes it clear that the Sec. 2801 tax on bequests from "covered expatriates" WILL affect his estate planning: Tax traps of holding and attempting to surrender a US #GreenCard" https://t.co/JcWCUx9BqI via @YouTube
— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) November 23, 2018