IRS Streamlined Foreign Offshore Procedure: No I-407 Filed

If you moved to the UK on a US green card and never filed Form I-407, the IRS still treats you as a US tax resident, taxable on worldwide income. The usual way to clear the missed years without penalties is the IRS Streamlined Foreign Offshore Procedure: three years of returns, six years of FBARs and a non-wilful certification.

That is the short answer. The longer one matters because the people in this position are rarely casual cases. They are typically senior executives, partners and founders who came to the US on an employer-sponsored green card, relocated to London for a promotion or a family reason, put the card in a drawer and assumed that leaving America ended the relationship. It did not, and the gap between what they assumed and what the Internal Revenue Code says can now run to a decade of unfiled returns, unreported UK accounts and an investment portfolio the IRS has never seen. This guide sets out how the green card test works, what the back years actually require, how the streamlined procedure applies to a lawful permanent resident living in the UK, and where the US-UK treaty helps and where it does not. At Jungle Tax we prepare these catch-up filings; we do not advise on immigration, and nothing here is a view on whether any particular card remains valid.

Why does the IRS still treat me as a US resident when I left years ago?

US tax residency for a non-citizen is decided under two tests in section 7701(b) of the Internal Revenue Code: the substantial presence test, which counts days, and the green card test, which counts status. Moving to London defeats the first test almost immediately. It does nothing to the second.

Under the IRS green card test, you are a resident for tax purposes if you are a lawful permanent resident at any time during the calendar year, and you stay one until that status ends in one of three ways: you voluntarily renounce and abandon it in writing to US Citizenship and Immigration Services, your status is administratively terminated by USCIS, or it is judicially terminated by a federal court. Physical absence is not on the list. Neither is the expiry date printed on the card, which is an identity document rather than the status itself.

Form I-407, the Record of Abandonment of Lawful Permanent Resident Status, is the standard written route. Most people who leave and never intend to return simply never submit one, because nobody tells them it exists. The consequence for tax is mechanical: no written abandonment and no termination means each year continues to count as a US resident year under the green card test, with full filing obligations on worldwide income and foreign accounts.

The assumption that causes the problem

Clients usually reach us carrying one of three beliefs: that their status "lapsed" after a year abroad, that an expired card ended everything, or that paying full UK tax as a UK resident switches off US filing. Immigration authorities may well take the view, at a border or in a later application, that long absence evidences abandonment. That is an immigration question, and we leave it to immigration counsel. For tax, the IRS page is the operative rule, and it requires a written abandonment or a formal termination. Until one exists, the safe filing assumption is that you remained a lawful permanent resident.

What do the missed years actually require?

A green card holder treated as a US resident files exactly what a US citizen abroad files. For a London-based high earner, the core set for each year is usually:

• Form 1040 reporting worldwide income: UK salary and bonus, vested share awards, dividends, interest, capital gains on UK and US investments, rental income, and pension income once in payment.
• Form 1116 to claim the foreign tax credit for UK income tax paid, which normally neutralises most or all US tax on UK employment income at UK rates.
• FinCEN Form 114 (FBAR) for any year in which the combined maximum balances of all non-US accounts exceeded $10,000. UK current accounts, savings, ISAs, brokerage accounts and many pension arrangements all come into scope.
• Form 8938 (Statement of Specified Foreign Financial Assets) where thresholds for taxpayers living abroad are exceeded: broadly more than $200,000 at year end or $300,000 at any time for a single filer, double for a joint return.
• Form 5471 if you own or control a UK company at the relevant thresholds, which is common for founders and holding-company structures.
• Form 8621 for UK-domiciled funds, including funds held inside an ISA, which the US generally treats as passive foreign investment companies.

The ISA point is one generalist pages almost never cover. The UK wrapper makes income and gains tax-free for HMRC; the IRS does not recognise it. A stocks and shares ISA held by a US tax resident is simply a taxable foreign brokerage account, and if it holds UK or Irish funds, each one may need its own PFIC analysis. UK pensions are treated differently: the US-UK treaty can defer US tax on growth inside a UK registered pension scheme, but the account still needs to be reported correctly, and the treaty position should be disclosed.

For the FTC versus foreign earned income exclusion choice across catch-up years, which is a separate decision for each year and usually favours the credit for UK higher-rate taxpayers, see our companion guide on FTC vs FEIE for green card holders catching up from the UK.

How does the Streamlined Foreign Offshore Procedure apply to a green card holder?

The IRS page on streamlined procedures for taxpayers residing outside the United States groups green card holders with US citizens. There is no separate track. Eligibility rests on three pillars.

1. The non-residency test

For citizens and lawful permanent residents, you must, in at least one of the three most recent years for which the US return due date (including properly extended due dates) has passed, have had no US abode and been physically outside the United States for at least 330 full days. For someone who has lived and worked in London for several years, with only short US trips, this is usually straightforward to document with travel records and UK employment history. Married couples filing jointly must both meet it.

Notice the irony. The green card holder who has been gone longest, and therefore feels least American, is usually the one who qualifies most cleanly for the foreign procedure. The person who still splits time with a US home may not.

2. Non-wilful conduct and Form 14653

The procedure is only available where the failure to file, report or pay resulted from non-wilful conduct: negligence, inadvertence, mistake or a good-faith misunderstanding of the law. You certify this under penalties of perjury on Form 14653, with a narrative statement explaining what happened, why, and how you discovered the problem.

For a green card holder the narrative is often strong on its facts, but it must be specific. "I believed my US obligations ended when I moved" is a beginning, not a certification. The narrative should explain the relocation, what you understood about your status and why, who prepared your UK returns and what they told you, why US accounts or advisers did not flag the issue, and the event that brought it to light: a US bank account closure, an employer share-plan query, a mortgage application, or a conversation about returning to the US. Inconsistencies are what draw scrutiny. If you visited the US on the green card after moving, or retained a US brokerage account that issued tax forms, the narrative needs to address how that sits with your understanding.

3. No current IRS examination, and a valid taxpayer number

You cannot use the procedure if the IRS has already opened a civil examination of your returns for any year, or if you are under criminal investigation. Most lawful permanent residents already have a Social Security number from their time in the US, which satisfies the identification requirement.

What you file and what it costs

The submission covers the three most recent tax years whose due dates have passed and the six most recent FBAR years whose due dates have passed. Returns are paper-filed, marked "Streamlined Foreign Offshore", with Form 14653 enclosed and copied to each return, and the tax due plus statutory interest paid. FBARs are filed electronically through the BSA E-Filing System with the streamlined explanation. For eligible taxpayers there is no miscellaneous offshore penalty under the foreign procedure, and no failure-to-file, accuracy-related, information return or FBAR penalties for the covered years. That contrasts sharply with the domestic version, which carries a 5% penalty on the highest aggregate balance of foreign financial assets.

Streamlined, delinquent forms or a different route? A decision table

The procedure is not the only programme. Which route fits depends on what is actually missing and how the conduct looks. We built this table for the green card holder fact pattern specifically:

Your position	Likely route	Why
No US returns filed since moving to the UK; UK accounts unreported; 330-day test met; failures non-wilful	Streamlined Foreign Offshore Procedure	Clears returns, FBARs and information forms with no penalty
US returns filed and all income reported, but FBARs missed	Delinquent FBAR Submission Procedures	No underreported tax, so the narrower programme may suffice
Returns filed, income reported, but Form 8938, 5471 or 8621 missed	Delinquent International Information Return Submission Procedures	Requires a reasonable-cause statement; penalty relief is not automatic
Spent more than about 35 days a year in the US with a US home; 330-day test failed in all three years	Streamlined Domestic Offshore Procedure	Available only if prior returns were filed; 5% penalty applies
Facts suggest deliberate concealment, or the IRS has already made contact	Not streamlined; specialist representation first	Certifying non-wilfulness falsely carries criminal exposure

Worked example: an executive who left the card in a drawer

The following is an illustrative composite with our own figures, not a client file.

Michael received his green card in 2013 while working in New York and filed US returns through tax year 2016. In early 2017 his employer moved him to London as a managing director. He never filed Form I-407, never returned to live in the US, and stopped filing US returns, believing they ended with his US payroll. By 2025 his position looked like this:

• UK salary and bonus of about £480,000 a year, taxed under PAYE at the 45% additional rate on most of it
• Restricted stock units in his employer's US-listed parent, vesting annually
• A stocks and shares ISA of around £180,000 holding UK-domiciled index funds
• A UK general investment account of about £650,000, producing roughly £24,000 a year of dividends and interest
• A UK registered workplace pension and a personal pension
• A dormant US checking account and a US brokerage account that still issued Forms 1099

In November 2026, the three most recent tax years with passed due dates are 2023, 2024 and 2025. The six most recent FBAR years are 2020 through 2025.

On preparation, the foreign tax credit absorbs the US tax on his employment income almost entirely, because UK rates on his salary exceed the US federal rates on the same income. The residual US liability comes from two places. First, the ISA: its dividends and gains are fully taxable in the US, and the UK funds inside it need PFIC computations on Form 8621. Second, the 3.8% net investment income tax on his investment income, which the IRS takes the position cannot be reduced by the foreign tax credit under the Code. On figures of this order, the total US tax across the three years might be in the region of $6,000 to $9,000 plus interest, set against a combined foreign account balance of well over $1 million that has gone unreported for six FBAR years. Outside the streamlined procedure, the potential information-return and FBAR penalty exposure on those facts dwarfs the tax.

Two further points from the example. His US brokerage 1099s show the IRS already holds some third-party data on him, so his Form 14653 narrative must explain why he did not connect those forms with a filing obligation. And because he became a lawful permanent resident in 2013, he has held that status in at least eight of the last fifteen years, which brings in the long-term resident rule discussed below.

Does the US-UK treaty tie-breaker switch filing off?

No, not by itself. Article 4 of the US-UK income tax treaty contains residence tie-breaker rules, which look in turn at where you have a permanent home, your centre of vital interests, your habitual abode and your nationality. For a green card holder who has lived in London for years with no US home, those tests will very often point to the UK. The 2001 treaty also contains a specific rule for green card holders, under which they are treated as US residents for treaty purposes only where they have a substantial presence, permanent home or habitual abode in the US.

But a treaty tie-breaker is a position you take, not a status that applies automatically. To rely on it, a dual-resident individual generally files Form 1040-NR as a non-resident and attaches Form 8833, Treaty-Based Return Position Disclosure. If no return is filed, no position has been taken. The years remain resident years on the IRS's view, and the unfiled return is still unfiled.

There are three further limits that sophisticated readers should know:

• FBAR does not follow the treaty. FinCEN's definition of a US person draws on the Code's residence rules without regard to treaty positions, so a green card holder claiming treaty non-residence generally remains within FBAR filing.
• The streamlined procedure is built around resident returns. The IRS instructions describe catch-up Forms 1040 and 1040-X. Recasting past years as treaty non-resident years is a distinct technical question with its own risks, including whether a late treaty claim is respected.
• For a long-term resident, the treaty claim itself can be an expatriation event. That is the point at which the 8-of-15 rule becomes critical.

Why the 8-of-15 long-term resident clock matters

A lawful permanent resident in at least eight of the last fifteen tax years is a "long-term resident" for the US expatriation rules. When a long-term resident's status ends, whether through Form I-407, formal termination, or by commencing to be treated as a resident of the UK under the treaty without waiving its benefits, that is an expatriation for tax purposes, with a final dual-status return, Form 8854, and potentially the mark-to-market exit tax if the individual is a "covered expatriate". One of the triggers for covered status is failing to certify US tax compliance for the five years before expatriation, which is why catch-up filing and any later change in status are closely linked. The thresholds and computations are set out on the IRS expatriation tax page; we do not go further into them here.

What does HMRC see, and does the UK side need fixing?

For most clients in this position the UK side is already in order. A green card holder working in London is usually UK resident under the Statutory Residence Test and has been taxed through PAYE and Self Assessment on UK income. The US catch-up does not by itself create a UK filing obligation. It does interact with the UK in several ways:

Item	US treatment (green card holder)	UK treatment (UK resident)
Tax year	Calendar year, 1 January to 31 December	6 April to 5 April
Basis of taxation	Worldwide income while status continues	Worldwide income for UK residents; the remittance basis was replaced from 6 April 2025
ISA income and gains	Fully taxable; UK funds may be PFICs	Exempt
UK registered pension growth	Treaty may defer; position should be disclosed	Not taxed until benefits are drawn
US-source income (e.g. US brokerage dividends)	Taxable; treaty may limit withholding	Taxable; credit for US tax under the treaty, subject to limits
Foreign account reporting	FBAR and Form 8938	No equivalent annual account report for individuals

Two UK-side reviews are worth doing during the catch-up. First, check whether US-source income, such as dividends in a dormant US brokerage account, was fully reported on your UK returns; it often was not, because the client thought of the account as "American" and therefore irrelevant to HMRC. Second, check that any US tax now paid on US-source income is reflected correctly in UK foreign tax credit claims. Calendar-year US figures must be mapped onto UK tax years, which is tedious but important on a three-year catch-up.

A preparation checklist for the green card holder in London

1. Confirm the immigration facts with documentary evidence: the date status was granted, and whether any I-407 or termination exists. We record the facts; immigration counsel interprets them.
2. Compile US travel days for the last three years and confirm the 330-day, no-US-abode test is met in at least one.
3. Identify the three tax years and six FBAR years in scope as at the filing date, remembering the window rolls forward each year.
4. Gather UK P60s, P11Ds, Self Assessment returns and calculations, and UK tax paid for each year.
5. List every non-US account, ISA, pension and company interest, with maximum balances in each calendar year.
6. Identify UK funds needing PFIC treatment, including those held inside ISAs.
7. Collect US-side data: old Forms W-2, 1099s, US accounts, and the last filed return.
8. Prepare the returns using the foreign tax credit where it produces the better result, and disclose any treaty pension position.
9. Draft a specific, consistent Form 14653 narrative and review it against the documentary record.
10. Reconcile the UK side: US-source income reported to HMRC, and credits claimed correctly.
11. File, pay tax and interest, and diarise current-year US filings so the account stays compliant.

Common errors that undermine a streamlined filing

• Filing only the current year. A "quiet" return for one year without the full three-year and six-year set leaves the earlier years open and can make a later non-wilful certification harder to sustain.
• Treating the ISA as tax-free in the US. It is one of the most frequent errors in self-prepared catch-ups.
• Assuming Form 1040-NR is correct because you live abroad. Without a properly disclosed treaty position, a lawful permanent resident files as a resident.
• Using the wrong exchange rates or mismatched tax years. UK figures must be converted and restated on a calendar-year basis.
• A generic narrative. The IRS can reject or examine a certification that reads as boilerplate or contradicts the documents.
• Submitting Form I-407 before the compliance picture is understood. Because abandonment can be an expatriation event for a long-term resident, the order in which compliance is completed and status changes occur affects what must be certified.

If you are also concerned about historical account reporting exposure, our FBAR penalty calculator gives an indicative view of the penalty regime the streamlined procedure is designed to remove. For broader US filing support while you remain a green card holder, see our US tax services.

Bringing a dormant US status back into compliance

The green card holder who moved to London is not a reluctant taxpayer. They are usually someone who paid full UK tax every year and simply did not know that a document in a drawer kept them inside the US system. The law gives that person a reasonably generous route back, provided the filing is complete, the conduct was genuinely non-wilful, and the narrative tells the truth clearly. The cost of getting it right is usually modest relative to the assets involved; the cost of ignoring it compounds every year the card remains unaddressed.

If you hold, or held, a green card and have not filed US returns since moving to the UK, we can review your position in confidence, map the years and forms in scope, and prepare a complete streamlined submission alongside your UK records. Please contact our cross-border team to arrange a confidential consultation.