In what situations is a permanent resident at a disadvantage tax-wise
or legally, compared to a U.S. citizen? I know there are issues
relating to inheritance; what exactly are they? And what else is
there? (Besides not being able to vote, of course.)

Hi jonas!

According to Cole-Chu LLC, US permanent residents (resident aliens)
are taxed virtually the same way as citizens, except when it comes to
estate (inheritance) taxes.

In the case of inheritance, it seems that the biggest difference
between citizens and resident aliens is the ability to defer
inheritance taxes on a spouse's estate.  Marital property must be
transferred to a non-citizen through a Qualified Domestic Trust.

Cole-Chu LLC - Estate Taxes for Non-U.S. Citizens
[ http://www.c-cc.com/briefs/noncitizentax.html ]

Dagmar Pollex, an estate planning attorney, addresses this further in
this Milton (MA) Times article:

Non Citizens Need Special Estate Plans
[ http://www.miltontimes.com/news/2002/0321/Letters/pollexon$$$.html ]

...David Eshagh Pour discusses it here, with examples:

The Green Card Holder's Drawback
[ http://www.mycweb.com/megillah/apr2001/the_green_card_holders_drawback.html
]

...and attorney Paul Premack explains the QDT in this article from the
San Antonio Times:

Resident Aliens May Need Special Tax Planning
[ http://www.premack.com/columns/1999/990723.htm ]

According to the IRS [ http://www.irs.gov ] Tax Topic 851, US Resident
Aliens are subject to the same tax policies as citizens:

Tax Topic 851 (Near the bottom)
[ http://www.irs.gov/faqs/display/0,,i1%3D54%26genericId%3D16292,00.html
]

More information regarding tax questions affecting US Resident Aliens
can be found in IRS Publication 519, the US Tax Guide for Aliens
(You'll need to have Acrobat Reader installed):

IRS Publication 519 - US Tax Guide For Aliens
[ http://www.irs.gov/pub/irs-pdf/p519.pdf ]

As for other disadvantages, I have found none save being denied the
right to vote.  US Resident Aliens are bound *and* protected by the
same laws as citizens.

Hope this helps!

missy-ga

You gave me what I was looking for, although not what I was HOPING
for! I needed to find a tangible tax disadvantage for an unmarried
permanent resident (because that's what would create a case for dual
citizenship in my situation); there doesn't seem to be anything of the
sort. Thanks for your careful search, however.

Missy, couple more disadvantages i've found, being a resident alien. I
can' vote, and I can't be conscripted.  And worse still, I can't
become president even I get nationalized. Tough life huh!

Also if it's of use to the questioner, you're taxed on worldwide
income while a resident alien. My understanding is that remains even
if you live in another country later unless you give up your green
card, and divorce your spouse if you have one.

Other disadvantages I have stumbled upon during my 20 years as a US
resident alien:
Can't join the peace corps (why? because it is a government agency for
US citizens). Many other US government agencies don't allow aliens;
including the FBI, and CIA.
Can't get government jobs that require "top secret" access, (ex: can't
work on defense contracts).
Can't become a high ranking elected official (ex: president)

Becoming a naturalized citizen resolves most of these problems, but as
the commenter above said, you still can't be president)

headsetsdotcom:
I don't know that I'd call the inability to get drafted a
"disadvantage"! ;)

jeanluis:

I got the impression that by "legal disadvantages", the questioner
meant ways in which he might be treated unfairly in other matters of
law (like the tax issue), not so much government employment issues.

Jonas, if I've misread you, please do ask for clarification, I'll be
happy to set it to rights.

missy-ga

A 1996 welfare reform significantly limited access to many welfare
programs for legal immigrants - although there have been some efforts
to modify or reverse some of these reforms. For more information on
the reform and the impact of the reform check out:
How are Immigrants Faring After Welfare Reform? (March 4, 2002)
http://aspe.hhs.gov/hsp/immigrants-faring02/index.htm 
Although the evidence is limited to LA and NY City – I think the
information might be of interest to you. To give you a flavor of the
report and outline the reform, here is a portion of it:
“Before the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) was enacted in 1996, legal immigrants were
eligible for benefits on terms similar to those of native-born
citizens. The new law significantly limited the eligibility of
legally-admitted immigrants for means-tested federal benefit programs,
particularly immigrants entering the United States after the welfare
reform law was passed in August 1996.”

I remember the controversy at the time particularly since and my
husband is a legal immigrant. Hope this helps!