Moving abroad does not end a green card holder’s US tax residence

A green card holder who moves abroad remains a US tax resident until the status ends in a way the tax rules name: Form I-407 filed with the card, a final order of abandonment or removal, or a treaty tie-breaker. A holder who has had the status in 8 of the last 15 tax years must then file Form 8854, and any one of three tests can bring the expatriation tax.

What ends the status for immigration, and what ends it for tax

US Citizenship and Immigration Services (USCIS) says a permanent resident keeps the status until naturalising or until it is lost or abandoned, and lists moving to another country intending to live there permanently among the ways of abandoning it. USCIS weighs intent by the reason for an absence, its planned length and any events that prolonged it, as an article on keeping a green card from Vietnam sets out.

The regulation on lawful permanent residence adds that the status terminates on a final administrative order of exclusion, deportation or removal. Form I-407 is the voluntary route, and USCIS says it then updates its records to show the person is no longer a permanent resident.

USCIS also gives the Internal Revenue Service (IRS) the person’s name and the filing date. The form is mailed to a USCIS facility in Lee’s Summit, Missouri; in rare cases it is handed in at an overseas USCIS office, embassy or consulate, and it can also be handed to a Customs and Border Protection officer at a port of entry.

For tax, the regulation states: “Resident status is deemed to continue unless it is rescinded or administratively or judicially determined to have been abandoned.” Where the holder starts the process, status counts as abandoned when Form I-407, or a letter of intent, is filed with the green card enclosed. Where USCIS or a consular officer starts it, the date is the final administrative order of abandonment.

Publication 519 adds: “Until you have proof your letter was received, you remain a resident alien for tax purposes even if the USCIS would not recognize the validity of your green card because it is more than 10 years old or because you have been absent from the United States for a period of time.”

A third route is a tax treaty. A holder treated as a resident of a foreign country under a treaty, without waiving its benefits, who notifies the IRS on Forms 8833 and 8854, ceases to be a permanent resident for tax.

The IRS list of treaties, reviewed on 3 January 2026, has no entry for Vietnam, while Treasury’s treaty page lists an agreement with Vietnam signed on 7 July 2015 and says it posts documents on signature, before ratification and entry into force.

This indicates that a holder resident in Vietnam has no treaty route on the pages read. Vietnam’s side of the 2015 agreement is traced through the official lists in an article on Vietnam’s tax treaties.

Eight of fifteen years makes a long-term resident

When status ends, the expatriation rules reach a citizen who relinquishes citizenship and a long-term resident. Section 877(e)(2) defines the second as a person who is a lawful permanent resident in at least 8 of the 15 tax years ending with the year the status ends.

A year in which a treaty makes the person resident of another country, without a waiver, does not count; Notice 2009-85 states the same test.

The statute counts years in which a person is a permanent resident, not years spent in the United States. This indicates that years spent abroad add to the count while the status has not been taken away or determined to have been abandoned. The instructions read do not say whether a year of partial status counts as one of the 8.

A holder with fewer than 8 of the last 15 years is not a long-term resident, and so is not an expatriate under the statute; the instructions name only citizens and long-term residents as filers of the initial Form 8854.

Three tests make a covered expatriate

Any one of three tests makes a long-term resident a covered expatriate under section 877A:

The third test needs no wealth. The IRS instructions for Form 8854 say: “You will be subject to tax under section 877A if you have not certified your compliance with these obligations, regardless of whether your average annual income tax liability or net worth exceeds the applicable threshold amounts.” The obligations cover income, employment and gift tax, information returns where applicable, and paying liabilities, interest and penalties.

Net worth counts every interest in property that would be taxable as a gift if transferred just before expatriation, using good-faith estimates. The exceptions in section 877A(g)(1)(B), for dual citizens and minors, are written for people who became or are citizens.

What a covered expatriate owes

• All property is treated as sold on the day before the expatriation date at fair market value, with the gain taxed in that year; a loss counts to the extent the Code otherwise allows, and the wash-sale rule does not apply.
• The gain is reduced by an exclusion of $910,000 for 2026 ($890,000 for 2025).
• Property held on the day the person first became a US resident is treated, for this tax only, as having a basis of not less than its fair market value that day, unless the holder elects out irrevocably. A gain built up before that day therefore stays out of the deemed sale.
• Deferred compensation, tax-deferred accounts such as individual retirement plans, and interests in nongrantor trusts follow separate rules instead of the deemed sale, and tax on other property can be deferred until it is sold, with interest, security such as a bond and an irrevocable waiver of treaty rights.
• A US citizen or resident who receives a gift or bequest from a covered expatriate may owe a separate tax under section 2801; the final regulations cover transfers received from 1 January 2025.

Form 8854 and the dates

Publication 519 says every long-term resident who ends status files an initial Form 8854, covered expatriate or not. Failing to file, or filing incomplete or incorrect information, carries a $10,000 penalty unless shown to be due to reasonable cause and not willful neglect; the IRS expatriation tax page says it may be imposed on anyone who must file.

What this means for a holder living in Vietnam

• With no Form I-407 filed and no final order, a holder in Vietnam is, on the texts read, still a US tax resident taxed on worldwide income, and each year adds to the count of 8.
• A holder who did not file the returns required of a US resident in the 5 years before the date cannot certify compliance; without the certification the holder is a covered expatriate whatever the wealth. The IRS relief procedures for late compliance describe former citizens, and the page read does not mention long-term residents.
• Shares, property or accounts outside the United States count in net worth and in the deemed sale, because both reach all property.
• Each family member is tested on their own record. A child who held permanent resident status in at least 8 of the 15 tax years is a long-term resident under section 877(e)(2), which sets no age limit, and the minor exception in section 877A(g)(1)(B) is written for people who relinquish citizenship.

What is known, what is not, and what comes next

What this article has not established

The Instructions for Form I-407 and the USCIS fee schedule were not read; only USCIS web pages were.

Treasury regulations under section 877A and the final 2026 Form 8854 were not read, and the 2026 figures rest on Revenue Procedure 2025-32 with the draft instructions as a second source.

The tax treatment in Vietnam of any step, state taxes in the United States and entry to the United States afterwards were not examined, and nothing here is guidance on completing a form.