- 1. Introduction
- 2. Exit Tax Issues
- 3. Procedures for Voluntary Abandonment
- 4. Conclusion
Form I-407, Record of Abandonment of Lawful Permanent Resident Status, is designed to serve as a person’s abandonment of status as a lawful permanent resident (LPR) of the United States.
Many persons are under the mistaken belief that simply because they have moved abroad or their green cards have “expired” they are no longer LPRs for tax purposes. This is incorrect. Just moving abroad or allowing a green card to expire does not constitute abandonment of LPR status for tax purposes. But that can be accomplished by filing a Form I-407.
Of course, if you abandon LPR status, you will no longer have the benefits of being an LPR. For example, any petition you filed for your family members before you give up green card will be deemed abandoned; you may no longer be eligible for certain financial aid for higher education; and it may be more difficult to qualify for a home mortgage in the U.S. So, think carefully before giving up your green card.
1.1 Reasons for Abandonment
There are several reasons that a person may want to abandon lawful permanent resident (LPR) status:
Tax avoidance: An LPR is taxed on their worldwide income. In addition, there are financial reporting requirements, such as the requirement to file U.S. Department of the Treasury FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBARs) if the LPR has an interest in or signing authority for foreign financial accounts with an aggregate value of $10,000 at any time during the calendar year.
Avoiding Immigration Court:
- An LPR who resides outside the United States on a non-temporary basis may be refused admission by U.S. Customs and Border Protection and referred to an Immigration Court for a removal (deportation) hearing on the basis that he or she has “abandoned” LPR status.
- A Form I-551, Permanent Resident Card (“green card”) is only a valid entry document for an LPR who has been abroad for under 1 year. Thus, an LPR abroad for longer may be refused admission on the basis that he or she lacks a valid entry document, even if he or she has not abandoned LPR status. Similarly, an LPR who has applied for and received a reentry permit but who remains abroad past its expiration date, which is a maximum of two years, lacks a valid entry document. In such situations, the LPR may be referred for a removal hearing.
Avoiding the cost and hassle of maintaining LPR status: For an LPR spending significant periods abroad, it may be expensive and inconvenient to keep the ties to the U.S. which would be necessary to avoid abandonment of LPR status, such as periodic trips to the U.S., filing applications for reentry permits, and maintaining links such as real estate, insurance, and investments in the U.S.
Family Reunification: One difficulty of being an LPR is that there are long wait periods under the State Department Visa Bulletin for you to sponsor for a green card a spouse you married or a child born abroad after you immigrated. If you have a way to quickly re-immigrate to the U.S., such as through the EB11 extraordinary ability, EB12 outstanding researcher or professor, or EB13 multinational manager or executive category, you may be able to abandon LPR status then re-immigrate simultaneously with those relatives. Similarly, if you may be eligible for an H-1B specialty occupation or L-1 intracompany transfer visa, you may be able to abandon LPR status and then apply for such visa, at which time your relatives may qualify for dependent visas.
Curing a Defect in Prior Immigration: If an individual previously was granted LPR status by the government erroneously when he or she did not qualify, such individual may be at risk of rescission of the LPR status and may not be eligible for naturalization. Abandoning LPR status and re-immigrating may solve the problem.
Note that in some cases, naturalization in the U.S. may be an option to solve the problems of avoiding Immigration Court, avoiding the cost and hassle of maintaining LPR status, or family reunification.
1.2 Will You Be Eligible for a Nonimmigrant Visa?
Persons who abandon LPR status do not automatically qualify for B1/B2 (visitor for business or pleasure) visas or for entry to the U.S. under the visa waiver program. One requirement for such visas or entry is that you prove “nonimmigrant intent,” meaning strong ties to your country of residence such that you are likely to return home in compliance with the terms of the visa or the visa waiver program. Filing an I-407 may assist in proving nonimmigrant intent for a B1/B2 visa but is not sufficient evidence. The applicant must have other evidence of ties to his or her home country such as a home, job, investments, and/or social ties. For more about proving nonimmigrant intent, see Proving Nonimmigrant Intent for a U.S. Visa. Also see our firm’s Guide to B1/B2 (Visitor for Business or Pleasure) Visas and read about the Grounds of Inadmissibility.
1.3 Will You Be Eligible to Re-Immigrate In the Future?
Abandoning LPR status does not impact a person’s eligibility to re-immigrate in the future. However, a person must be eligible and must go through the same process as when they initially immigrated.
2. Exit Tax Issues
As an immigration lawyer, I am not an expert on tax rules. I strongly suggest that you seek advice from an accountant or tax lawyer knowledgeable about exit tax issues before making a final decision about whether and when to file a Form I-407. We can provide a referral.
An “exit tax” is payable by certain long-term residents (LTR). An LTR is an individual who has been an LPR in at least 8 of the 15 tax years ending with the tax year in which LPR status is abandoned. An LTR is subject to an exit tax if she (i) has a net worth over $2 million, (ii) paid U.S. income taxes averaging over $147,000 for the prior five years, or (iii) does not certify on IRS Form 8854 that she complied with all U.S. tax obligations for the five prior years.
Under the Exit Tax provisions, the individual is subject to tax on the net unrealized gain on all of their worldwide assets as if such assets were sold for their fair market value on the day before the expatriation date. Special rules apply for pension plans and trusts.
Other gift and estate tax implications also arise upon expatriation.
Please provide our firm with a summary of the advice you receive from the accountant or tax lawyer.
3. Procedures for Voluntary Abandonment
3.1 Where to Apply
A Form I-407 may be filed in person or by mail with any of the following agencies:
- USCIS Eastern Forms Center: USCIS will accept I-407s by mail. USCIS’ goal is that processing times will be within 60 days.
- U.S. Customs and Border Protection: An I-407 may be filed with CBP at a port of entry. If the CBP officer believes that an individual has abandoned LPR status, the officer may offer to allow him or her to enter as a nonimmigrant for a temporary period if the individual is willing to file a Form I-407.
- A USCIS international field office or U.S. embassy or U.S. Consulate abroad: In “very rare circumstances,” one of these offices may accept a Form I-407, such as if you are a diplomat with a need to expeditiously obtain an A or G visa.
3.2 Completing the Form
The Form, at Part 1, Item 10 asks the individual to “state the reasons for abandoning lawful permanent resident status.” A typical answer is simply, “I do not live in the United States.”
By signing the form, a person certifies that:
I knowingly, willingly, and affirmatively declare that I have no intention of residing permanently in the United States, and that by signing and submitting this form, I intend to record the fact that I have knowingly and willingly abandoned my lawful permanent resident status in the United States. I have been informed of, and I understand my rights to a hearing before an immigration judge about whether I have abandoned my lawful permanent resident status in the United States. By signing and submitting this form, I knowingly, willingly, and affirmatively waive my rights to such a hearing.
3.3 Documents Needed
The Form I-551, Permanent Resident Card (“green card”) needs to be surrendered, unless lost or stolen, with the Form I-407. Any unexpired reentry permit must also be surrendered.
If the LPR is under 18 years old, the minor’s parents, custodial parents or legal guardians must sign and consent to submitting Form I-407. If there is only one legal parent, that parent can sign Form I-407. However, that parent must submit proof of having sole legal custody or proof showing that any other parent has either died or had his or her parental rights legally terminated. A guardian must submit documentation showing they have legal custody or other authority to sign for the minor.
There is no government fee to file the I-407.
The officer will accept the Form I-407 upon determining that the individual is truly, willfully, and voluntarily abandoning lawful permanent resident status.
Whether the Form I-407 is mailed in or submitted in person, it is important to
receive a copy of the completed I-407 with an officer’s stamp as evidence that the form has been filed.
Filing an I-407 and surrendering the green card constitutes abandonment as of the date the I-407 is “filed” for both tax and immigration purposes.
The DHS or consular officer accepts the card and returns it, with the Form I-407, to the relevant district office for review and inclusion in the individual’s immigration file.
DHS is required to provide the Internal Revenue Service (IRS) with the names of individuals who choose to abandon their LPR status.
The I-407 is generally irrevocable. Once you have abandoned LPR status, you cannot get it back without applying for LPR status anew. Therefore, individuals should give careful thought to abandoning LPR status.
3.5 Keep a Copy of the I-407
A copy of the Form I-407 with a stamp from the consular or DHS official should always be carried by the former LPR when applying for a nonimmigrant visa or travelling to the United States. The I-407 also serves as proof that the individual has abandoned LPR status for the airline carrier; otherwise, the individual may not be allowed to board in the absence of a green card.
A copy should also be included in the former LPR’s U.S. tax return for the year of abandonment.
Our law firm is available to assist clients in evaluating whether to file an Form I-407 and in preparing the application.
- To be considered to have abandoned LPR status for tax purpose, in the absence of filing an I-407, the status must have been either rescinded by USCIS or taken away by an immigration judge or federal judge. Treasury Regulations §301.7701(b)-1(b)(1). ↑
- See generally Elaine M. Kumpala, Clayton E. Cartwright, Jr., and Cyrus D. Mehta, Why Would I Want to Abandon Lawful Permanent Resident Status or Relinquish U.S. Citizenship, AILA Midwinter Conference Handbook (AILA 2016); Laura Donohue-Liban, Consequences of Voluntary Relinquishment of U.S. Citizenship and Abandonment of Lawful Permanent Resident Status, 21-9 Bender’s Immigr. Bull. 2 (2016) ↑
- 31 C.F.R. §§1010.306(c) and 1010.350(a).. ↑
- See generally Gary Chodorow, Green Card Holders Staying Abroad Over 6 Months Risk Abandonment (Jan. 31, 2017), https://lawandborder.com/risk-abandoning-green-card-abroad-6-months/. ↑
- In certain situations, CBP may grant an LPR a waiver of the valid entry document requirement. ↑
- Applications for reentry permits must be filed while in the United States, and biometrics appointments in connection with such applications must normally be done in the United States. ↑
- But see 8 C.F.R. § 211.1(b) waiving the immigrant visa requirement for a child born during the temporary visa abroad of an LPR mother if the child seeks admission to the U.S. within 2 years of birth and is accompanied by an LPR parent who is applying for their first return to the United States after the birth of the child. ↑
- IRC § 877A. ↑
- USCIS, I-407, Record of Abandonment of Lawful Permanent Resident Status (Aug. 21, 2019); USCIS, USCIS Will No Longer Accept I-407 at International Offices (June 17, 2019). ↑
- USCIS, I-407, Record of Abandonment of Lawful Permanent Resident Status (Aug. 21, 2019); 9 FAM 202.2-8(c)(10). ↑
- Form I-407 (Mar. 31, 2017). ↑
- 26 CFR § 301.7701(b)-1(b). ↑
- AILA-DOS Liaison on I-407 Procedures (Oct. 9, 2014), AILA Doc. No. 14101042.. ↑
- But see Matter of Wood, Case No. A24 653 925 (BIA Jan. 13, 1992), reported in 69 No. 16 Interpreter Releases 512-14 (Apr. 27, 1992) (notwithstanding surrender of card and statement, respondent did not intend to abandon LPR status). ↑