Green Card Holders & Long Term Residency for Expatriation Purposes
What is a Long Term GC holder?
A Green card holder for 8 or more years is considered to be “long term” Green card holder. This is important, because at that juncture, if one were to give up their GC, they would be required to file form 8854. Failure to do so would render the taxpayer a US tax resident in perpetuity, even though they have given up their GC.
When is 8 years really 8 years?
Mark is a citizen of Spain and US green card holder. He has had a green card for 9 years but for the recent 5 years he lived in Spain. Mark came to the conclusion that he is not required to file 8854 because he was in the United States only for 4 years, whereas the requirement to file form 8854 applies to green card holders who have been legal permanent residents of the US for 8 or more years.
Despite having lived outside of the US for 5 years, Mark is still a LTR (long term resident) and required to file 8854.
How could Mark have avoided being classified a LTR?
Mark would be considered not a lawful permanent resident for the years that he lived abroad if he had filed form 8833 for each year by claiming “closer ties” to the country of residence. Form 8833 should have been attached to the non-resident tax return form 1040NR. Whereas Mark has been filing jointly with his spouse the US resident tax return form 1040.
When and Where To File Form 8833
Attach Form 8833 to your tax return (Form 1040NR, Form 1040NR-EZ, Form 1120-F, etc.). If you would not otherwise be required to file a tax return, you must file form 8833 at the IRS Service Center where you would normally file a return to make the treaty-based return position disclosure under section 6114 https://www.irs.gov/pub/irs-pdf/f8833.pdf
Closer ties cannot be claimed retroactively
Since Mark and his wife had filed jointly, they cannot file amended returns to file separately and file form 8833 with the past date. Mark has not filed separately all those years - he cannot claim closer ties retroactively. Form 8854 needs to be filed for the year when Mark renounced his green card.