Ethically Dubious Question....

[Walrus2 0]

Ok, so I have done a fair bit of reading here and elsewhere and will probably go to an immigration and tax lawyer, but here is my situation. I could do with some advice from the nice folks here.

I'm from Europe and married to an American for a bit over three years. We have a son, born in America this year.

Six months ago, I finally got my marriage related permanent residence restrictions removed. I didn't know that this means I am now subject to US tax wherever I live in the world (my fault I assume.) BUT......

I have been offered a job in a tax haven.

So basically, I don't want to be taxed by America, because every other country in the world except Eritrea allows that people should be taxed in the jurisdiction in which they earn money and use services.

And frankly, as I understand it, the US was founded on the basis of no taxation without representation and yet here I am, being asked to pay taxes to the US despite originally being European and getting no vote in local or national US elections. And I don't fancy paying US tax when I am not using US services, roads, healthcare etc and I have paid over 200k in US taxes and still wasn't eligible for unemployment when my company laid me off. So my ethics say I owe the USA diddly.

Anyway, can anyone tell me:

1. Will I HAVE to give up my permanent residence anyway, because we will be out of the country for more than a year (although visiting regularly.)

2. Is there any way I can avoid paying US tax without giving up my permanent residency. Even like setting up a company in another tax haven and having my employer pay the company, rather than me?

3. If I do give it up, is it possible to get my US permanent residency back if we decide to move back to the US after a few years?

Number 3 is the big question here for me.

Look forward to hearing thoughts on the questions I am posing, as well as any comments on the ethical nature of what I am trying to do here.

All the best.

[Penguin_ie 5,996]

1. You can get a re-entry permit which lasts for 2 years. If the plan is to stay longer than that yes, you will loose your greencard.

2. Not as far as I know, but I am not a tax lawyer.

3. Yes absolutely. Many couples move to another country for a while and thus the foreign spouse has to give up the greencard. Then you re-apply when you are sure you want to move back. You will need to pay the fees again and wait several months, but the fact that you had a greencard before will not negatively affect you.

[Nich-Nick 3,354]

What you may not have not studied is that there are tax treaties between the US and many countries such as the UK for example. The US wants you to file a tax return, but that does not always mean pay taxes on foreign earned money. It may mean merely filling out a tax form with zero due because you earned income abroad or paid taxes to the other government.

I have no clue what/where Eritrea is but you need to be aware of the new (last year first filing) IRS requirement called FATCA and see if you are required to also complete that to report foreign assets, accounts, etc. it goes a little further than the FBAR, which is reported to the US treasury and not the IRS.

The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, is an important development in U.S. efforts to combat tax evasion by U.S. persons holding investments in offshore accounts

.

FATCA links:

http://www.irs.gov/Businesses/Corporations/Summary-of-Key-FATCA-Provisions

http://www.irs.gov/Individuals/International-Taxpayers

Form 8938 Statement of Specified Foreign Financial Assets

Here's what USCIS says about ways you might lose your permanent residence status.

Abandoning Permanent Resident Status

You may be found to have abandoned your permanent resident status if you:

• Move to another country intending to live there permanently
  
  
• Remain outside of the United States for more than 1 year without obtaining a reentry permit or returning resident visa. However, in determining whether your status has been abandoned, any length of absence from the United States may be considered, even if less than 1 year
  
  
• Remain outside of the United States for more than 2 years after issuance of a reentry permit without obtaining a returning resident visa. However, in determining whether your status has been abandoned any length of absence from the United States may be considered, even if less than 1 year
  
  
• Fail to file income tax returns while living outside of the United States for any period
  
  
• Declare yourself a “nonimmigrant” on your tax returns
  
  

Edited November 24, 2012 by Nich-Nick

[NigeriaorBust 4,087]

It might actually cost more to get the green card again. Read about foreign income exclusion. It is pretty big, until you earn more than that you will owe nothing and just have to submit the forms.

[Rebecca Jo 1,962]

It sounds like you have more complicated tax issues than can be answered in an internet forum.

Number One - As a US permanent resident you are not beholden to the US government for your entire life. It's something like 10 years but you need an expert to get you the exact timeline.

Number Two - Your US citizen wife is required to file for her entire life. So if you mingle your incomes for tax purposes by filing jointly, yours gets taxed.

Number Three - It doesn't matter what your ethics say, what matters if the tax code and immigration law. Besides, it's not unethical to try and avoid taxes - people do it every day. If you move abroad without officially abandoning your permanent residency, and don't comply with US tax law, this COULD affect any future plans to return to the US. You would likely be granted a new green card because (at least at this point) USCIS and the IRS don't share records. But if you ever returned to the US and sought citizenship, any tax non compliance could become problematic. Hence why you need clarification on Number One.

Since you haven't yet become a US citizen, you are in a pretty good spot as you have not yet bit the permanent US tax bullet. But you do need an expert to look at how long you do have an obligation. If you think you are going to be absent from the US for a long time, then almost certainly you need to consider officially abandoning your US residency. But you need expert advice on how to do this. If you are only going to be gone a short while (during the window in which you have a tax obligation anyway) then you should try to maintain the residency by filing US taxes.

Edited November 24, 2012 by Rebecca Jo

[Walrus2 0]

Ok, so I have done a fair bit of reading here and elsewhere and will probably go to an immigration and tax lawyer, but here is my situation. I could do with some advice from the nice folks here.

I'm from Europe and married to an American for a bit over three years. We have a son, born in America this year.

Six months ago, I finally got my marriage related permanent residence restrictions removed. I didn't know that this means I am now subject to US tax wherever I live in the world (my fault I assume.) BUT......

I have been offered a job in a tax haven.

So basically, I don't want to be taxed by America, because every other country in the world except Eritrea allows that people should be taxed in the jurisdiction in which they earn money and use services.

And frankly, as I understand it, the US was founded on the basis of no taxation without representation and yet here I am, being asked to pay taxes to the US despite originally being European and getting no vote in local or national US elections. And I don't fancy paying US tax when I am not using US services, roads, healthcare etc and I have paid over 200k in US taxes and still wasn't eligible for unemployment when my company laid me off. So my ethics say I owe the USA diddly.

Anyway, can anyone tell me:

1. Will I HAVE to give up my permanent residence anyway, because we will be out of the country for more than a year (although visiting regularly.)

2. Is there any way I can avoid paying US tax without giving up my permanent residency. Even like setting up a company in another tax haven and having my employer pay the company, rather than me?

3. If I do give it up, is it possible to get my US permanent residency back if we decide to move back to the US after a few years?

Number 3 is the big question here for me.

Look forward to hearing thoughts on the questions I am posing, as well as any comments on the ethical nature of what I am trying to do here.

All the best.

EDIT 11/24 - thanks so much to those who have replied so far.

To give a little more info, I will be fortunate enough to earn a bit more than the foreign earned income and housing allowance and there is no local tax, so no relief under a double taxation treaty, so I will still be hit for us tax if I remain a permanent resident, I think.

Thanks for info re FATCA, I have a passing awareness - this again leads me to think that giving up permanent residence and trying to get it back later is the way to go......

[rika60607 215]

If he payed 200k in taxes over no more than three years in the US,

the cost of new GC application is less than peanuts compared to his habitual income.

Foreign income tax exclusion provided by the US tax code will not be enough, as only about 90K of income is excluded.

With income like that, financial advisers and lawyers are the way to go to.

It might actually cost more to get the green card again. Read about foreign income exclusion. It is pretty big, until you earn more than that you will owe nothing and just have to submit the forms.

[Walrus2 0]

Thanks also to my little Irish penguin for her response. I can't find any info on USCIS website or the like about reapplying after giving up a green card.....you seen any interesting links?

This is the most useful forum I have ever posted on for anything already. Thanks to everyone who gives up their time to reply to all posts.

[himher 634]

You missed one - Libya I believe taxes their citizens overseas

You probably have to give it up. To keep it you have to file taxes as a resident BUT you exclude the first 95000 or so off the top so your taxes working overseas are a lot lower than your taxes in the US.

To take advantage of that exclusion however you have to either file as an overseas resident (grounds for losing your green card) or stay out of the US for >330 days a year (also grounds for losing your green card). They have you in a catch-22 on that sport.

The BEST thing to do taxwise is apply for citizenship then work overseas as a US citizen resident of the country where you are working. Next best thing to do is take the job, get settled in, then surrender the green card to the consulate (that's what we did)

On question 3: It is possible to surrender a green card when you move away and re-apply for it later when you are ready to come back. We moved away for 3 years and that's what we did with my wife's green card. When we were ready to move back I re-applied for it.

Keep in mind that your wife must maintain a US residence or keep good records of intent to return to the US in order to petition you back. It is very difficult to sponsor a spouse while overseas. Basically you guys need to bank and keep 3X the 125% income for your household size in cash-equivalent assets in order for her to re-sponsor you (or) make sure that you have a co-sponsor in the US

Your wife should also keep up with her own tax filings from overseas. It's to make sure everything is OK for the new I130 / I485 package with all the ####### they want attached when you are ready to return.

It otherwise doesn't matter what basis the US was founded on. The US is currently run by the blue states LOL

Ok, so I have done a fair bit of reading here and elsewhere and will probably go to an immigration and tax lawyer, but here is my situation. I could do with some advice from the nice folks here.

I'm from Europe and married to an American for a bit over three years. We have a son, born in America this year.

Six months ago, I finally got my marriage related permanent residence restrictions removed. I didn't know that this means I am now subject to US tax wherever I live in the world (my fault I assume.) BUT......

I have been offered a job in a tax haven.

So basically, I don't want to be taxed by America, because every other country in the world except Eritrea allows that people should be taxed in the jurisdiction in which they earn money and use services.

And frankly, as I understand it, the US was founded on the basis of no taxation without representation and yet here I am, being asked to pay taxes to the US despite originally being European and getting no vote in local or national US elections. And I don't fancy paying US tax when I am not using US services, roads, healthcare etc and I have paid over 200k in US taxes and still wasn't eligible for unemployment when my company laid me off. So my ethics say I owe the USA diddly.

Anyway, can anyone tell me:

1. Will I HAVE to give up my permanent residence anyway, because we will be out of the country for more than a year (although visiting regularly.)

2. Is there any way I can avoid paying US tax without giving up my permanent residency. Even like setting up a company in another tax haven and having my employer pay the company, rather than me?

3. If I do give it up, is it possible to get my US permanent residency back if we decide to move back to the US after a few years?

Number 3 is the big question here for me.

Look forward to hearing thoughts on the questions I am posing, as well as any comments on the ethical nature of what I am trying to do here.

All the best.

Edited November 24, 2012 by himher

[Penguin_ie 5,996]

Aaack

I don't believe there is any documentation on the USCIS website regarding this, because the process is exactly the same as it is for a first time applicant.

[himher 634]

Yep. We started over as if the first case had never happened

NOTE: The tax savings were more than worth it

Aaack

I don't believe there is any documentation on the USCIS website regarding this, because the process is exactly the same as it is for a first time applicant.

[Rebecca Jo 1,962]

EDIT 11/24 - thanks so much to those who have replied so far.

To give a little more info, I will be fortunate enough to earn a bit more than the foreign earned income and housing allowance and there is no local tax, so no relief under a double taxation treaty, so I will still be hit for us tax if I remain a permanent resident, I think.

Thanks for info re FATCA, I have a passing awareness - this again leads me to think that giving up permanent residence and trying to get it back later is the way to go......

Somebody do feel free to step in if I am wrong, but I believe the amount you are taxed on is the amount above the exclusion. So, for example if you are earning 125K and the exclusion is 90K you are only taxed on 35k.

You'd have to put the pencil to it, but even in that scenario it still may be worth it to abandon residency.

[VanessaTony 3,567]

Somebody do feel free to step in if I am wrong, but I believe the amount you are taxed on is the amount above the exclusion. So, for example if you are earning 125K and the exclusion is 90K you are only taxed on 35k.

You'd have to put the pencil to it, but even in that scenario it still may be worth it to abandon residency.

Yep that's how I understand it as well, the amount ABOVE the threshold is taxed.

[VanessaTony 3,567]

Six months ago, I finally got my marriage related permanent residence restrictions removed. I didn't know that this means I am now subject to US tax wherever I live in the world (my fault I assume.) BUT......

if you were still a conditional GC holder you would still be taxed, so you've had to pay US taxes since your "LPR since" date.

I have been offered a job in a tax haven.

So basically, I don't want to be taxed by America, because every other country in the world except Eritrea allows that people should be taxed in the jurisdiction in which they earn money and use services.

And frankly, as I understand it, the US was founded on the basis of no taxation without representation and yet here I am, being asked to pay taxes to the US despite originally being European and getting no vote in local or national US elections. And I don't fancy paying US tax when I am not using US services, roads, healthcare etc and I have paid over 200k in US taxes and still wasn't eligible for unemployment when my company laid me off. So my ethics say I owe the USA diddly.

Why on earth weren't you eligible for unemployment? You paid into it, you're eligible for it. It's not a means-tested benefit. Very strange.

On the other note though, you're a US resident, THAT is why you need to pay... because you are supposed to be residing here. I too find it ridiculous that as a citizen you'd be required to file no matter where you live, even if it's not in the US. Crazy stupid in my opinion.

Anyway, can anyone tell me:

1. Will I HAVE to give up my permanent residence anyway, because we will be out of the country for more than a year (although visiting regularly.)

2. Is there any way I can avoid paying US tax without giving up my permanent residency. Even like setting up a company in another tax haven and having my employer pay the company, rather than me?

3. If I do give it up, is it possible to get my US permanent residency back if we decide to move back to the US after a few years?

1. As someone else stated, you can get a re-entry permit.

2. Not legally not that I'm aware of. I'm sure there's some way but I assume it would be a "legal gray area". All income must be taxed, foreign or otherwise.

3. Yes. You will need to start from the start again, and unless your USC spouse is with you this can take up to a year (sometimes longer, sometimes shorter).

There are rules though that apply to citizenship about how you can't give it up just to avoid tax, I would wonder whether the same apply. If they thought you abandoned solely because you didn't want to pay taxes, I'm not sure how that would go.

Personally if you're moving overseas to work and you have don't plan to return for a couple of years... it would appear to make more sense to abandon and start from the start. However having gone through the immigration process myself, i wouldn't want to start from the start again.

[Jahwaree 83]

Apply for re-entry permit B4 U go , If you will be out under 2 yrs... Its harder to get back GC later