London Embassy Turnaround Time for Green Cards

A report from the field (thanks K) from someone who just canceled a green card.

Form I-407 (warning:  PDF) was mailed to the U.S. Embassy in London and returned — festooned with all the appropriate official rubber stamps ‘n stuff — in one week.

That’s really good.

Why having a green card for 8 years is bad

For what it’s worth, this was a successful relinquishment of the green card which prevented my correspondent from being subjected to the exit tax rules.  Here is how it works and what it means to you.  It might be useful for you to relinquish your green card in 2012, too.

People who are “lawful permanent residents” can be subjected to the U.S. exit tax.

A “lawful permanent resident” visa is commonly called a “green card.”

A green card holder only falls victim :-) to the exit tax if he or she holds that status too long.

“Too long” means that the person was a lawful permanent resident in 8 or more years out of the last 15 years — including the current year.

Once you hold the green card in 8 of the last 15 years (including the current year), you are defined as a “long-term resident.”

Long-term residents are subjected to the exit tax when they cancel their green cards.

Therefore, the first line of defense against the exit tax is to NOT be a long-term resident.  Get rid of the green card before you hit the magic 8 years.

If you received your green card in 2006

The current year is 2012.  If you received your green card in 2006, then you have been a lawful permanent resident “in” 7 years already:  2006, 2007, 2008, 2009, 2010, 2011, 2012.  There is at least one calendar day in each of those years on which you held the green card — the lawful permanent resident visa.

If you hold the green card on January 1, 2013, that will be your eighth year of holding a green card.  That means you become a long-term resident, and that in turn means you are subjected to the exit tax rules when and if you give up your green card.

Your objective is to NOT have the green card on January 1, 2013.

If this is you, I suggest you strongly consider canceling your green card before December 31, 2012.

Exceptions, weird rules, disclaimers, etc.

I am not your lawyer.  This is not competent legal advice.  There is a metric tonne of weird little rules that might work well for you and stop the exit tax — short of actually giving up the green card.  Talk to someone smart and get good advice.  This is a big step with tax consequences as well as real life consequences.

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  1. Thanks so much for this info, Mr Hodgen, and for taking the trouble to answer my query so comprehensively!

    In following up info on the dual status return, I discovered in Pub 519, that I must include a statement to establish residency termination date, requiring copies of what would amount to I-407, and also providing various facts to support closer connection to the foreign country, etc. So, to answer one of my own questions from my previous post, this statement would be how the IRS is informed about my relinquishing status, when I am not required to lodge an 8854 (I would also probably include a sentence to show how long I held the green card, just to avoid confusion!). For the sake of greater confidence on my part, I wonder if you can confirm for me that this interpretation of what to do lines up with your own? Thanks very much once again!

  2. Sorry, just one last follow up question… the fact that the dual status return will be lodged (eg. by April) in the year following the expatriation, does not matter as long as the green card is surrendered by no later than the 7th year, correct? I.E. obtain green card 2006, surrender 2012, lodge 2012 dual status return in April 2013 (the notional 8th year), Since the green card is not operational in 2013, and since as far as the trigger provisions are concerned, only the length of holding the green card matters, and not when the IRS is notified (which I vaguely recall might have been relevant under the previously operating rules?) the fact that the notification to the IRS happens in the notional 8th year does not matter, and no 8854 is necessary and no exit tax provisions are triggered? Alternatively, would there be a need for some sort of pre-notification to the IRS in year 7? Hope the question makes sense! Thanks!

  3. In theory, if you are a green card holder and move to/reside/have a “closer” connection to a country that the US has a tax treaty with you can “elect” treaty status to speak and expatriate on the date before you become a resident of the other treaty country. So in theory if you are Green Card Holder who moved to Canada on July 1st you can simply file Form 8854 at the normal filing time next year and make the treaty election. Note: Until you have a I-407 you are not logged out of the US Tax and legal system vis a vis FBAR etc. However, the date for taking the mark to market calculation in the case of treaty country can be set to that of when you first obtained a closer connection with that treaty country.

  4. As a counter example, one correspondent on reports waiting more than four months for an I-407 response from Toronto. Nothing despite repeated reminders. And that was two months ago — as far as I can tell they are still waiting.

    What recourse does a person have if a US Embassy never responds to a correctly filed and provably delivered I-407?

  5. The turnaround time for the US Consulate in Amsterdam is very good. The appointment was within a week after requesting it online and the exit interview is quick and polite. The papers are stamped and returned at the end of the interview, it took less than 20 minutes.
    The only negative point is (one of) the guards, very rude and agressive behaviour towards visitors, treating you like you are a terrorist.