Patrick W. Martin · Tax Expatriation

International Tax · Citizenship Renunciation · LPR Abandonment · Chamberlain Hrdlicka

Most important Questions for “Green Card” Holders (“lawful permanent residents”): Part II of VI

We ended the last post (I of VI) on this topic by referencing a crucial article I authored and published more than a decade ago in the International Tax Journal– titled Oops.. .Did I Expatriate and Never Know It – (2014)

  • Key Background on LPRs and “Oops . . . Did I Expatriate”?

Please first read Part I of this series:  Most important Questions for “Green Card” Holders (“lawful permanent residents”): Part I of VI, which outlines some of the foundational questions every green card holder should consider before addressing the additional issues questions below.

Many individuals have no idea that, under the legal principles confirmed in the federal district court case I litigated — Aroeste v United States, 22-cv-00682-AJB-KSC (20 Nov. 2023) – they may already be treated as “covered expatriates” as a matter of law.

  • Along Comes Section 2801 – and 2025 Final Regulations – The “Forever Taint” to Family and Friends (Paying the Taxman) 

Please read an earlier post from yours truly (About the Author:  Patrick W. Martin), more than a decade ago –“Covered Expatriate” Status is a “Scarlet Letter”— which discusses the severe and often misunderstood consequences of covered expatriate status.

In addition, see another earlier post I authored explaining why covered expatriate status matters even for individuals with modest or limited assets: Why “covered expat” (“covered expatriate”) status matters, even if you have no assets! The “Forever Taint”!

  • Aroeste  – Landmark Decision Confirms the Law – Tax Treaty Law Applies – Taxpayers Do Not Waive Benefits per Gov’t

These writings all addressed the same underlying legal and policy expectations that courts would eventually be required to confront — issues now directly addressed in Aroeste. The Aroeste decision is also consistent with positions I successfully advanced in three separate U.S. Tax Court cases involving green card holders, none of which resulted in published opinions because the government ultimately conceded to my arguments and my clients prevailed prior to trial.

This case law has great impact on green card holders who are living principally outside of the U.S.  There are 3.88 million individuals who are living outside the U.S. – per the 2024 report by the U.S. federal government.  Many of them live in a treaty country.  Many of these individuals might be considering their immigration law consequences (particularly after the latest announcement from the USCIS – impact these immigration consequences:  U.S. Citizenship and Immigration Services Will Grant ‘Adjustment of Status’ Only in Extraordinary Circumstances (May 2026) Few have considered the tax law implications.

See, the Homeland Security, Office of Immigration Statistics –  Estimates of the Lawful Permanent Resident Population in the United States and the Subpopulation Eligible to Naturalize: 2024, and Revised 2023;  see Table 1 in the report.

In order to understand what issues anyone with a green card has (especially when living outside the U.S.), some key questions should be asked:

  • Gifts and inheritances after I leave (what U.S. taxes)
  • Worldwide income while I still have the green card
    • Does the U.S. tax the salary I earn in my home country?
  • Am I still a U.S. taxpayer?
    • If I never told USCIS I left, does the IRS still consider me a U.S. tax resident?
    • Can I be a U.S. tax resident and a tax resident of my home country at the same time?
    • What is a “tax treaty tie-breaker” and how does it help or hurt me?
    • If I use the treaty to be a non-resident, am I giving up my green card automatically?
    • Can I be a non-resident for income tax under the treaty but still be considered a “U.S. person” for other rules like FBAR?
    • Do all forms I file with the U.S. federal government (IRS, USCIS, ICE and others) subject me to claims of signing under penalty of perjury?

Stay tuned . . . . . . . . . for III of VI

Most important Questions for “Green Card” Holders (“lawful permanent residents”): Part I of VI

Those individuals who have green cards and live in and outside of the United States, should understand the tax and legal implications to them.

There are millions of individuals in this category. i.e., those who have “emigrated” with an “e” from the United States.  There are 3.88 million of these green card holders, as of 2024 according to the U.S. federal government’s latest report.  The statistics are striking – that so many individuals reside outside the U.S.

See, the Homeland Security, Office of Immigration Statistics –  Estimates of the Lawful Permanent Resident Population in the United States and the Subpopulation Eligible to Naturalize: 2024, and Revised 2023;  see Table 1 in the report. 

These nearly 4 million individuals who do not reside principally in the U.S. are similar to the fact pattern of Mr. Aroeste residing in Mexico City.  See the case where yours truly, Patrick W. Martin, was lead counsel in that landmark case – and the analysis of the District Court in Aroeste v. United States.  The government lost.

See an early related post titled –How Many LPRs are Living in Tax Treaty Countries like Aroeste (Now including Chile)? What are the Legal-Tax Consequences? (Part I of II)

Today’s post is a series of simple and key questions for those with green cards, to help them better hone in on the legal issues and U.S. tax risks that may be applicable to them:

  • Am I still a U.S. taxpayer?
    • What does it mean to be a U.S. taxpayer, when there are technical tax terms such as “United States person” and an individual who is a “lawful permanent resident” (not defined in the immigration law)?
    • I have a green card but I’ve lived outside the U.S. for years — do I still have to file U.S. tax returns?
    • The date on my physical green card has expired – does that mean I am no longer a a “lawful permanent resident” for tax purposes?
    • Does it matter whether my green card is expired, taken back at the airport, or just sitting in a drawer overseas?
    • Is there a difference between “giving up” my green card and just letting it lapse?

 

    • What was the Aroeste case actually about?
    • Why is Aroeste important if I’m a green card holder living abroad?
    • Why did the U.S. federal government fight so hard against Mr. Aroeste and appeal/litigate the case to the 9th Circuit, (and ultimately give up)?

 

  • FBAR and foreign account reporting
    • What is an FBAR, and why do I have to tell the U.S. about a bank account in my own country?
    • What is FATCA, and why is my local bank asking if I’m “American” – or if I ever had a green card?
    • What is Form 8938, and how is it different from FBAR?
    • What about accounts I only sign on, like my parents’ or my employer’s?
  • The exit tax / expatriation rules
    • What is the “exit tax” I keep hearing about?
    • Am I a “long-term resident” — and why does that label matter so much?
    • What is a “covered expatriate,” and how do I know if I am one?

Why are all of the above questions so important to me – since I previously obtained a “green card”?

Subsequent posts will address additional key questions that can have a significant legal consequence to individuals who had or have a green card and spend substantial time outside of the United States.   For a preview, look at Oops.. .Did I Expatriate and Never Know It – International Tax Journal 2014

Stay tuned . . . . . . . . .