Surrendering your green card involves complex tax consequences that can lead to a significant exit tax. Timing is critical as the specific date you give up your Lawful Permanent Resident status directly impacts your tax situation and potential liabilities.
• Form I-407 is the official document to abandon LPR status with no government fee
• Timing of filing is crucial—mail from outside the US to control your expatriation date
• Long-Term Resident (LTR) status applies after holding a green card for 8 of the last 15 years
• Just one day with a green card in a tax year counts as the entire year toward the 8-year test
• "Covered expatriate" status triggers if you meet any of three tests: net worth over $2M, average annual tax over $206K (2025), or inability to certify 5 years of tax compliance
• Exit tax treats worldwide assets as if sold the day before expatriation with $890K exclusion (2025)
• Retirement accounts face special treatment—30% withholding on US qualified plans, possible immediate taxation on foreign pensions
• Best strategy: surrender green card before becoming an LTR (before 8 years)
• Form 8854 is required with final tax return—$10,000 penalty if not filed
• An additional "shadow tax" of 40% applies when covered expatriates give gifts to US persons later
• Names of expatriates are published in the Federal Register
More detailed info at Immigration and Tax Consequences of Abandoning U.S. Residency ("Green Card"). If you have questions, contact us.
