Unfortunately, the answer is yes. The IRS views tax residency as separate from the physical possession or expiration status of the Green Card. If you have an expired Green Card and have not formally renounced your U.S. permanent residency, you are still considered a U.S. tax resident. This status requires you to file a U.S. tax return annually and report all income from both U.S. and foreign sources, regardless of where you live. Please note that while some countries have tax treaties with the United States, which might reduce double taxation, these treaties generally don’t exempt you from filing a return. They may, however, allow for certain credits or exclusions that can reduce your U.S. tax liability. Additionally, as a U.S. tax resident, you must also comply with foreign bank account reporting (FBAR, FinCEN Form 114) and the Foreign Account Tax Compliance Act (FATCA, Form 8938) if your foreign financial accounts exceed certain thresholds.
In summary, as long as your Green Card status is technically in effect — even if it has expired — you must comply with U.S. tax filing requirements unless you formally renounce your residency status. The process of abandoning a Green Card is complex and may require careful planning to manage any potential tax implications effectively. The exit tax, in particular, can lead to significant liabilities, especially for those with high net worth or valuable assets. If you are considering abandoning your Green Card, TFX tax experts can assist you with planning and expatriation. Simply sign up for TFX and schedule a consultation with one of our tax specialists. For more information, refer to How to abandon a U.S. Green Card, officially terminate your U.S. tax residency as a Green Card holder, and file your final tax return.