Lolo Soetoro was a permanent resident alien of the United States in 1965, the year Lolo and Stanley Ann married. Pursuant to his scholarship agreement with the East West Center and financed by grants from the US State Department, Lolo returned to Indonesia to fulfill his contractual obligation to obtain an education in the US and return to his home country for one year to assist the US in developing goodwill.
On the advise of his mother-in-law, Madelyn Payne, Lolo filed a US tax return while a resident of Indonesia as a Non-resident alien. Filing as a nonresident alien while living in a foreign country automatically forfeits permanent resident alien status. Lolo’s ability to return to the US as a permanent resident was terminated.
This prompted pleas from Lolo and Stanley Ann for reconsideration so that Lolo could return to the US. The INS investigated and found Lolo and Stanley Ann were legally married, but the “Barry” was the step-child of Lolo because the adoption began in 1965 had not been finalized.
In 1967, the Soetoro adoption was finalized and Barack Obama’s legal name was changed to Barry Soetoro. Since Lolo was barred from returning to the US to live in the US permanently, the Soetoro’s moved to Indonesia. Angry that the US would not reinstate Lolo to a permanent resident alien after filing a Nonresident US Tax return, Stanley Ann notified the US State Department she would not be returning to the US in 1967.