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Level 2

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

I am a US-citizen, and my spouse received Permanent Residency (Green Card) in late 2007 and also an SSN around that time. We've filed all tax-returns as Married Filing Jointly. She worked only for a couple of years, earning minimum wage. In late 2015, we moved abroad, as per an open-ended reassignment by my employer. Due to uncertainty and potential difficulties in occasionally visiting US, she, in late 2018, via I-407, abandoned her Permanent Residency (from a US-consulate abroad). While married, we've filed every year's tax-return jointly (Married Filing Jointly).

Questions:

 

1. First and foremost, did that abandonment *automatically* invalidate/cancel her SSN? I suspect not (though my search revealed no clear answer). I also hope not, as she's continued to use that SSN in filing our joint tax-returns ever since. Regardless of whether it was cancelled automatically, is it now considered dead, only awaiting a manual, necessary cancellation (by, for instance, calling SSA) by her? If it is cancelled or considered dead, what to do (e.g. apply for ITIN), especially in regard to following questions?

 

2. Must we amend all tax-returns since the abandonment in late 2018 (2018, 2019)? I suspect so, to at least *formally* declare our choice to treat her (a non-resident alien, upon submission of I-407) as a resident. In essence, we had made this choice without making the formal declaration. In other words, we continued filing joint tax-returns using her SSN, without making the actual, explicit declaration in a note attached to the tax-return. If we must amend, can TurboTax Deluxe 2018 and 2019 (desktop-version) handle this?

 

3. Given that, as per my preface, she would be considered a Long-Term Resident, should she have filed, for 2018 (the year of said abandonment), Form 8854 (Initial and Annual Expatriation Statement)? If we are electing to treat her as a resident, then has she, at least in the eyes of IRS, really expatriated??? Neither she nor I are anywhere close to being a Covered Expatriate, but, from my reading, it seems as though she needs to file the form, at least for the initial year, as it seems mandatory upon termination/abandonment of residency. I could not find, in the instructions of this form (8854), any reference to the choice of treating a non-resident alien as a resident. If she must file this form, may it be done through an Amended Tax-Return; and, can TurboTax handle it?

 

4. Are there any other salient points of which I should me made aware? I am looking to minimize tax and frustration. As she hasn't had a salary for multiple years and doesn't expect to have one in the future, treating her as a resident seems only beneficial and tax minimal. Continuing to use TurboTax, and its e-file, from abroad would be least frustrating.

 

Many thanks.

1 Best answer

Accepted Solutions
Level 11
Level 11

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

@KingOfSting ,   first an apology for delayed response -- I had  not visited the site for  more than two weeks.

 

Second --- given that you are US citizen and your spouse  is a Non-Resident Alien  -- you can always file  jointly and attach a note  signed by both of you to say that  your spouse wishes to be  treated as a resident for tax purposes.  That should  work , especially since she still has SSN   ( it does not automatically die out, especially if used ).

Third -- the issue with filing 8854, is that it is really not meant for the case where one spouse is a citizen and the other spouse NRA while filing jointly. This is because by filing jointly, you have met all the filing requirements   and tax obligations  that 8854 wants to track and collect.  Therefore, my view would be to follow the  path outlined above and file jointly, especially when she has no  world income and avoid the complications / accounting of 8854

Fifth --- following he joint filing you would probably also make  her coming back and re-establishing GC  in the future  ( i am guessing here )

Sixth --- I am troubled by your not paying Social Security/ Medicare taxes on your foreign earnings, even if you are not employed  by a US entity and therefore must bear the burden by yourself.  As I understand Thailand  has no totalization agreement with the USA and therefore there is no way to avoid  double  social security taxation.  It just means  when you retire both you and your spouse would be eligible for Social Security benefits  from both countries and taxed according to the tax treaty between the countries.

Note that this means that  your FICA taxes are like a self-employed person  ( 15.3% of wages / self-employment income, even though it may be excluded from US taxes as foreign earned income ) plus  the  3% ( ?? ) of gross that you pay in Thailand..   Also   since your wife is not a citizen of  US not Thailand, there may other things to consider ( based on her country of citizenship ).

 

Does this  cover your queries or do you need more help on this ?

View solution in original post

5 Replies
Level 11
Level 11

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

@KingOfSting , first I have answered a similar question earlier this month.   Therefore before I continue  with your specific case , please could you answer the following:

(a) which country have  you moved to ;   (b)  Is your wife a citizen of that country;  (c) which state did you live in before moving to this country;  (d) do you have properties,bank accounts  etc. that are jointly owned or were  jointly owned at the time of her renouncement of residency (GC);  (e) is there a particular reason why she gave up her  GC  ( because she could have gotten  a three year waiver of having to visit USA at least once every year ) -- has this something to do with the rules of the country where you moved to ;  (f) are  you still paying Social Security to the USA  --- therefore the need for the country name to see if there is a treaty  and/or totalization agreement

 

I will come back once I hear from you 

 

pk

Level 2

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

@pk, sorry for the delay in my response. Here are the answers to the questions you asked:

a. Thailand

b. No

c. New York

d. Only one such account: an account that was and is still jointly-owned

e. Well, she had gone to the local US consulate to ask questions and options. She was told that she would have significant trouble entering the US, as it had been about 18 months since she had last entered and would be another six before she would try to enter again (2 years, all told). I am not sure that the information she was given was correct, but, in any case, after fair investigation and consternation, she returned to the consulate to abandon her GC, and apply immediately for a tourist-visa, so that she'd have no trouble entering the US on her next visit. We hadn't heard of that 3-year-waiver you mentioned. In any case, although I wish that she could maintain or regain it, it seems that it's now too late and that she must live with the tourist-visa.

f. No, now that I work overseas

 

Level 2

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

Hello, @pk . Do you have any update on this? I responded to your questions, but heard no response from you. As I stated in my original message, I am perplexed as to what to do. I very much would appreciate and look forward to a response from you.

 

Kind thanks. 🙂

 

P.S. Very sorry for the initial delay, between your prompt for questions and my turnaround, 3 days later. Holidays-planning had me quite busy. Thanks again. 🙂

Level 11
Level 11

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

@KingOfSting ,   first an apology for delayed response -- I had  not visited the site for  more than two weeks.

 

Second --- given that you are US citizen and your spouse  is a Non-Resident Alien  -- you can always file  jointly and attach a note  signed by both of you to say that  your spouse wishes to be  treated as a resident for tax purposes.  That should  work , especially since she still has SSN   ( it does not automatically die out, especially if used ).

Third -- the issue with filing 8854, is that it is really not meant for the case where one spouse is a citizen and the other spouse NRA while filing jointly. This is because by filing jointly, you have met all the filing requirements   and tax obligations  that 8854 wants to track and collect.  Therefore, my view would be to follow the  path outlined above and file jointly, especially when she has no  world income and avoid the complications / accounting of 8854

Fifth --- following he joint filing you would probably also make  her coming back and re-establishing GC  in the future  ( i am guessing here )

Sixth --- I am troubled by your not paying Social Security/ Medicare taxes on your foreign earnings, even if you are not employed  by a US entity and therefore must bear the burden by yourself.  As I understand Thailand  has no totalization agreement with the USA and therefore there is no way to avoid  double  social security taxation.  It just means  when you retire both you and your spouse would be eligible for Social Security benefits  from both countries and taxed according to the tax treaty between the countries.

Note that this means that  your FICA taxes are like a self-employed person  ( 15.3% of wages / self-employment income, even though it may be excluded from US taxes as foreign earned income ) plus  the  3% ( ?? ) of gross that you pay in Thailand..   Also   since your wife is not a citizen of  US not Thailand, there may other things to consider ( based on her country of citizenship ).

 

Does this  cover your queries or do you need more help on this ?

View solution in original post

Level 2

Particulars for a Spouse that Abandoned Permanent and Long-Term Residency (I-407)

@pk, thanks very much for your reply.

 

Your advice is well taken:

1. My NRA-wife and I will continue to file Married Filing Jointly. The notion of including a note might be a bit troublesome, as we like to utilize TurboTax and e-file (especially given that we're halfway around the world). Do you know whether TurboTax can handle this (be triggered to prompt for an ad-hoc note, and include it in an e-filing)?

2. We will also ignore Form 8854, as per your explanation.

3. I'm not sure what you meant by, "Fifth --- following he joint filing you would probably also make her coming back and re-establishing GC in the future ( i am guessing here )". My best guess is that you're assuming that we would return to US and reattempt her GC. That she would've never lost/abandoned her GC would have been great, but it seemed like it was singularly preventing her from having a clear path to visit the US (as it had been longer than 2 years since she had last visited). If there were a way that she could recuperate it or jump on some fast-track path toward a new one, while still remaining overseas, we'd likely attempt it. But, short of that, we likely won't, at least for now.

4. I hadn't mentioned that I work for the UN. US-citizens working for the UN *overseas* need not pay FICA taxes on those (foreign) earnings. In fact, the UN has a specialized tax-department for, exclusively, Americans. Although it doesn't offer tax-advice, it clearly states that US citizens working overseas are exempt from Self-employment taxes on UN-wages. So, I believe this issue to be non-applicable, but please notify me if it appears that I've misunderstood your characterization of this issue (Social Security / Medicare / FICA taxes).

 

With the exception of the follow-up question I asked in #1, I believe your most recent response covers my queries. Many thanks, once again.

 

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