Many US citizens living abroad are not aware that irrespective whether they are living and working in Europe, an US tax filing obligation exists:
- if the gross income exceeds the filing threshold (which in 2010 is US$ 9,350 for single filers)
- the existence of a tax treaty does not release from this filing obligation
- Please note: US law is unique in this respect! Expatriates from other countries might tell you that they do not have any home country filing obligations after giving up their residency – however, this story is not true for US citizens.
Expat Consequences of Non- Filing:
- Non filers (or back tax filers) may be penalized by a wide range of civil and criminal sanctions
- The IRS may file a substitute return without consideration of foreign tax credits and other deductions
- The statute of limitations on tax collections will never run out, so the IRS may file substitute returns even for decades
- Failure to file penalty: If US taxes are due, a delay in filing will result in a “failure to file” penalty and interest charges
- Such penalties increase monthly and may even exceed the tax liability
- In a refund situation, the law provides most taxpayers with a 3 years window for claiming the refund; after which refunds are lost forever
Attention: The IRS continues to identify people who have a filing requirement but have failed to file a return.
- Both the IRS and the foreign taxing authorities can exchange information on their citizens living in the other country
- The IRS has developed sophisticated means of catching expat non- filers in this computer age
- For example, every time an American renews a passport, the State Department obtains his or her Social Security number and reports it to the Internal Revenue Service
We assist back tax filers to re-enter the system smoothly
It is safe and easy with a strong partner who has professional expertise and long term experience.
- We helped a lot of our expat clients who were non-filers to become compliant
- re-entering the system is the best thing for each non- filer to do!
- not a single one of our clients has EVER been sent to jail, nor has any been threatened with criminal prosecution
- A tax professional will help steer each individual case toward a peaceful resolution