US Expatriate Tax Conference: Pt 2

Green cards and citizenship

John Richardson spoke on the tax consequences of ‘expatriating’ for green card holders and US citizens; in other words giving up their green card or citizenship. A green card is what US ‘lawful permanent residents’ use as proof of their immigration status.

Green card holders are deemed permanent residents of the US for federal tax purposes so they are subject to federal tax on worldwide income and various reporting requirements irrespective of whether they physically reside in the US.

Note that the definition of residency for immigration and tax purposes is not the same. Therefore an individual can cease residing in the US and fail to renew his green card but remain resident for tax purposes unless they follow the correct procedure for surrendering this status (described in Internal Revenue Code sec. 7701(b)(6))...