I-407 Filing Date Clarification: When Does U.S. Tax Residency Actually End?

Introduction

For lawful permanent residents (LPRs), also known as green card holders, the process of giving up U.S. residency often begins with filing Form I-407, Record of Abandonment of Lawful Permanent Resident Status. While the immigration consequences of filing are relatively straightforward, the tax side raises a nuanced but critical question:

When does U.S. tax residency officially terminate?

This filing date question matters because it determines whether a taxpayer is treated as a U.S. resident or nonresident for income tax purposes in a given year, and whether the expatriation rules (including the “covered expatriate” exit tax under IRC § 877A) apply.

The Immigration Date vs. The Tax Date

From an immigration perspective, U.S. Citizenship and Immigration Services (USCIS) generally considers your status to end on the date they receive and accept Form I-407. But for tax purposes, the Treasury Department has its own rules that don’t perfectly align.

The key regulation is Treas. Reg. § 301.7701(b)-1(b)(3), which provides a special rule for abandonment of LPR status. It says:

• If the individual initiates abandonment, residency is considered to be abandoned when the application (Form I-407) is filed, provided certain conditions are met.

• Importantly, the regulation clarifies that the date of mailing (with certified mail, return receipt requested, or foreign equivalent) controls, not the USCIS “date of receipt.”

Why the Date of Mailing Matters

This rule allows taxpayers to rely on the postmark date (or international equivalent) as the decisive factor. Practically, that means:

• If you mail your I-407 on December 20, 2025, and USCIS receives it on January 5, 2026, your tax residency is treated as having ended in 2025.

• This can have a major impact on income allocation between U.S. and foreign sources, and even whether the expatriation rules apply in one year versus the next.

In other words, the IRS gives taxpayers the benefit of the mailing rule to avoid ambiguity about when residency actually terminates.

What Counts as “Return Receipt Requested” Abroad?

One area of uncertainty is the phrase “certified mail, return receipt requested, or foreign equivalent.” Since many taxpayers live abroad when abandoning their green card, they may not have access to the U.S. Postal Service.

Questions often arise:

• Does FedEx, UPS, or DHL with delivery confirmation satisfy the “foreign equivalent” standard?

• Can proof of international tracking and signed delivery be accepted as the functional equivalent of USPS certified mail with return receipt?

The regulation does not expressly define “foreign equivalent.” However, IRS practice has generally recognized reliable international carriers that provide both:

1. Proof of mailing date

2. Proof of delivery/receipt

Thus, using a major carrier (FedEx, UPS, DHL) with full tracking and signature confirmation is widely considered a safe approach, provided you retain both the proof of mailing and delivery for your tax records.

Practical Guidance for Taxpayers

1. Keep meticulous records
   Save tracking numbers, shipping labels, and signed receipts showing both the date of mailing and date of receipt.

2. Document your intent
   If possible, attach a cover letter explaining that the mailing date is intended to serve as the abandonment date under Treas. Reg. § 301.7701(b)-1(b)(3).

3. Consider timing carefully
   The exact filing date may determine whether you are taxed as a resident or nonresident for an entire tax year, and whether exit tax applies.

4. Seek professional advice
   Because of the interplay between immigration law, U.S. income tax rules, and expatriation consequences, it is critical to coordinate with an attorney or cross-border tax advisor before filing I-407.

Conclusion

The difference between USCIS’s receipt date and the IRS’s mailing date rule may seem minor, but it can change the outcome of your tax obligations by thousands of dollars. For taxpayers navigating this process, understanding the Treasury regulation—and ensuring proper documentation—is essential.

At CHI Border, we regularly advise clients on the tax implications of abandoning U.S. residency, including timing strategies, documentation best practices, and planning for the expatriation rules.

Disclaimer (CHI Border)

This article is provided for general educational purposes only and does not constitute legal or tax advice. CHI Border Inc. and Fujimoto Law Corp. PC disclaim any responsibility for actions taken based on this content. Readers should consult with an appropriate qualified professional regarding their specific circumstances.