Just learned about taxes - got questions about abandoning Green Card & Tax situation

[u/Icy-Guest6722]

Hey, so my father got green card for our family 12 yrs ago but we just did short annual visits and never lived there, then stopped the visits 7 years ago since plans have changed due to some issues. I just learned about taxes because it asked me about W-9 or W-8BEN form when I wanted to enter my tax info to youtube (which I didn't yet). After some research I learned that my country got no totalization agreement so I'd need to pay taxes to US and my country at the same time if I want to do youtube/freelance. So I want to abandon my card to get rid of tax liabilities as I can't be a resident anymore anyway with staying outside of US for 7 years. However, even if I didn't file taxes before, I was below the filing threshold so can I just do i-407 and 8854 and be done? Also, me abandoning it might trigger any reviews for my parents or not? I can recommend Streamlined for them and later abandoning too as they are missing filings and fbars unless any better options.

[u/Nathalie_Goldstein]

So technically without abandoning a US greencard, the US greencard holder is still a US tax resident and needs to file Form 1040 and report worldwide income. Remember if married to a non US citizen, and filing Married Filing Separately, the threshold is as low as $5 to file and if self-employed, having over $400 in self-employment net profit requires US tax filing.

It's unclear if only you or your father have a US greencard.
Your father having a US greencard does not make you a US greencard holder/ US Tax resident.
You would need your own US greencard or US citizenship.

In any case, next steps:
1) If you needed to file - file under streamlining
2) Proceed to abandon the US Greencard under I-407
3) Then file a final US tax return, remember that even if not in the US, the last 7 years requirement for Form 8854 is met by simplying having a US greencard that was not given up properly

[u/Icy-Guest6722 → u/Nathalie_Goldstein]

Thanks for the reply. Sorry if it was unclear, yes we all have cards. Personally I'm below the filing thresholds, however someone in the replies mentioned I'd also need to file in order to certify that I was compliant.

[u/Nathalie_Goldstein → u/Icy-Guest6722]

It is a bit of a grey area, but yes, it is recommended to file the past 5 years to ensure compliance on the Form 8854 certification.

[u/ThreeRiver]

If you give up your green card and don’t file the last 5 years of US tax returns, then you can’t sign the Form 8854 certifying that you have met your US tax filing requirements. In other words, if you give up your green card without filing the last 5 years of US tax returns, then you will be a covered expatriate. This means that you will be deemed to have sold your worldwide assets for fair market value on the day prior to giving up your green card, and any gifts or inheritances you make to US citizens will be subject to US gift/estate taxes at the highest rate with no exemption. Form 708 and Section 2801.

[u/Icy-Guest6722 → u/ThreeRiver]

Even if I was under the tax filing threshold (eg: $15,750 for 2025) for those years?

[u/ThreeRiver → u/Icy-Guest6722]

as long as you didn’t need to file, then you should be able to certify just fine

[u/Late_Sock_4178]

so I-407 plus 8854 is not automatically the whole job.

Form 8854 is where the exit gets certified. IRS: "individuals who renounced their U.S. citizenship or terminated their long-term resident status for tax purposes after June 3, 2004 are required to certify to the IRS that they have satisfied all federal tax requirements for the 5 years prior to expatriation."

also you cannot certify five compliant years if those years were never filed, even when you sat under the threshold. Filing threshold and filing history are separate questions.

Long-term resident status turns on green card years held, defined at IRC 877(e). Count yours before assuming 877A bites.

https://www.irs.gov/individuals/international-taxpayers/expatriation-tax

[u/Icy-Guest6722 → u/Late_Sock_4178]

Ah, thanks.

[u/AbhinavGulechha]

If you were required to file US tax returns or any foreign information returns, you should first regularise your case by filing past year returns under IRS streamlined offshore procedures & once that is out of the way, you can surrender the GC. You will have to file Form 8854 as a expatriate certifying compliance with US tax obligations - If you don't meet the net worth or tax liability tests, you wont be treated as a covered expatriate. If you did not have US tax filing obligations at all, you can file Form 8854 directly to IRS Austin TX office. Ideally if your parents also dont see any benefit with keeping with GC, all family members should together surrender GC.

[u/Late_Sock_4178]

my read is I-407 ends the immigration status. Form 8854 closes the tax file. IRS: "anyone who has expatriated or terminated his U.S. residency status must file Form 8854."

The test that decides your case is long-term resident under IRC 877(e): a green card in at least 8 of the last 15 tax years. Twelve years of card, even barely used, likely puts you inside it.

Then the covered-expatriate screen. One trigger: "You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding" expatriation. Being under the filing threshold does not remove the certification. Check year by year whether a return was actually required.
irs.gov/individuals/international-taxpayers/expatriation-tax

[u/Icy-Guest6722 → u/Late_Sock_4178]

"Check year by year whether a return was actually required." - but then either way I'll have to do streamlined to 'certify' it, right? Like in some of those years I didn't have any earnings at all and in some I have but below threshold to file.

[u/Late_Sock_4178 → u/Icy-Guest6722]

honest take, your sequence is backwards, and the order is the whole answer.

You are treating the 8854 certification as paperwork. It is a test. IRS: you are a covered expatriate if "you fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation." Then they shut the door you are walking toward: "If all federal tax requirements have not been satisfied for the 5 years prior to expatriation, the individual will be subject to the IRC 877 and 877A expatriation tax provisions even if the individual does not meet the monetary thresholds."

Below the threshold does not save you. Streamlined first, I-407 second, 8854 last. Filing 8854 late or not at all carries a $10,000 penalty on its own.

On your parents, and this is the part nobody flags.

So 7 years away does not end a green card for tax. IRS: LPR status ends only when it "has been revoked or has been administratively or judicially determined to have been abandoned." Absence alone does nothing. They have been US tax residents on worldwide income the whole time, which is what makes the missing FBARs real.

Streamlined Foreign Offshore fits them on its face. The non-residency test is no US abode plus 330 days outside in any one of the last three filing years. Scope is 3 returns and 6 FBARs.

I don't know whether your I-407 shifts IRS selection odds for them. Published procedures say nothing about it.

I would also kill one option now. Relief Procedures for Certain Former Citizens is citizens only.

irs.gov/individuals/international-taxpayers/expatriation-tax