Olivier Custeau, Fiscaliste, B.A.A., M. Fisc., EA

Surrender of USA Permanent Residency (green card)

US taxation  —   — Share

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Question :

Hello Olivier!

I have some questions for you. On December 6, I filed an I-407 Record of Abandonment of Lawful Permanent Resident Status with the USCIS. My belief is that this terminates any US tax obligation I have as of that date. Is that correct, or are there any additional steps I need to take?

On a related note, I am trying to open an RESP account with Questrade and they are insisting that I need to fill out a W-8BEN and a W-9. I am trying to explain to them that a W-8BEN and W-9 forms are contradictory and it should be either one or the other. Furthermore, I am arguing with them that I should not have to fill out either of them because I no longer have any US tax obligation! (unless I’m wrong above). They are saying that as long as I have an SSN, I need to fill out a W-9. Which would mean I need to file W-9s for the rest of my life, as you cannot “close” an SSN number to my knowledge.

Do you have any insight here?

Nicholas

Answer :

Hello Nicholas,

Indeed, your U.S tax obligation will be terminated since you filed Form I-407. You are considered having ceased to be a U.S permanent resident as of this date. It’s possible that you will receive a stamped copy of said form in the coming weeks.

As for your other question, Questrade always asks these questions. They want to know if you are a U.S resident because if so, they need to inform the IRS. You are right saying it should be either W-8BEN or W-9. In your case, it should be Form W-8BEN (if needed) since you are not a U.S resident (given you filed Form I-407). Form W-9 applied to U.S Person which you no longer are. Form W-8BEN will be necessary if you have U.S passive income (dividend, interest) to which tax withholding generally applies (30% per Internal Revenue Code). With Form W-8BEN you want to make sure that the payor applies the correct tax withholding according to the U.S – CAN tax treaty (generally 15%).

Hope it answers your questions,

Kindest regards,

Olivier Custeau, B.A.A., M.Fisc., EA

Tax master and Enrolled Agent