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Expat Tax Issues for American Green Card Holders

Transcript of the above video:

In this video today, we are going to be discussing expat tax issues for Green Card holders, from the United States. What are we talking about when we mean Green Card Holders? We mean lawful permanent residents. Those who hold lawful permanent residence in the United States are allowed to leave the United States and often do have business and interests outside the United States.  In fact they are usually immigrants to the United States and for that reason, they can often journey abroad and often maintain ties to, not only jurisdictions abroad but they may have business interests abroad. In a tax context, this is important because I think a real misnomer amongst lay people out there with regards to tax liability is that Green Card holders, lawful permanent residents aren’t subject to the same tax regime as say United States citizen. That’s not strictly speaking, true. US lawful permanent resident is subject to essentially the same sort of tax oversight or compliance as an American citizen is and specific to this video, what I want to really drill deep into one, is a green card holder who’s burning money, let’s say they have foreign earned income, they have to deal with taxes in the same way that an American citizen does. So while the foreign earned income exclusion still applies, the FEIE,  there’s another video specific to the foreign earned income exclusion on this channel that also discusses things like FATCA, foreign account and taxation compliance act as well as the FBAR which is the foreign banking account reports. These all tend to apply to Green Card holders as well, notwithstanding the fact that they are not US citizens; if they are lawful permanent residents, they have the same sort of tax, the legal tax burdens, the legal tax requirements are attached to them as well as US citizens.

So for this reason, those who wish to leave the Unites States and essentially break their chains, chains is the wrong word, break their bonds with the US, because they genuinely don’t wish to remain residents in the United States, just letting the issue of ones residence just hang in the wind, without doing anything about severing it, can be problematic especially from a tax standpoint because that individual may be liable for certain taxes on income, unearned income, interests etc. of assets and income earned overseas. So what I am trying to get at with this video is just understand a Green Card holder has certain obligations very similar to an American citizen and simply leaving the United States, if one doesn’t go ahead and deal with the matter of their residence, simply leaving the United States  does not extinguish those obligations. Lawful permanent resident wishing to officially give up their permanent residence can file what is called an I-407 surrender and as soon as the I-407 surrender filing is perfected, that individual’s permanent residence is thereafter extinguished and severed and from that point forward, you are dealing with tax liability in a much different light. But up to that point, up to the point which ones residence is clearly ended, there is tax liability that will likely attach to an individual who has lawful permanent residence in the United States.