Expatriation is a very technical subject matter and doing any part of that wrong could have serious tax implications.  Both you and your client could be on the hook for substantial tax exposure and penalties.

The fact that you use the word "forfeit" implies you are probably not familiar with the technicalities.  You then quoted your client's statement about more than 7 years and filing forever if the return is not filed by May and you went on to file an extension - that suggests you have not done sufficient due d to protect your client and that you either misunderstood what your client told you or that your client had the wrong understanding of the law.

Suggest you first read through the following in details and come back if you have more questions.  When you do come back, please tell us (1) what action(s) your client had taken and when and (2) what kind of official letter he received from DHS on 12/31 (what a coincidentally clean date!) and what it says.

In case you decide that you are not comfortable handling this, you should seriously consider referring your client to someone else.

https://www.irs.gov/individuals/international-taxpayers/expatriation-tax

https://www.irs.gov/publications/p519#en_US_2021_publink1000222369

https://www.irs.gov/forms-pubs/about-form-8854