Search This Blog

March 10, 2018

Miscellaneous IRS Tax Rules and Facts for Expatriates Living Abroad

  • You have an obligation to keep the IRS informed of your currrent address using their form 8822. If you do not, they can take any action they wish (audit, assessment, etc) and it is valid because you failed to keep them current on your address.
  • Your tax return can be audited for 3 years after it is filed and six years if you omitt more than 25% of your income.
  • The statute of limitations on assessing taxes NEVER runs out if you fail to the a US tax return. That means the IRS may make an assessment for any year you failed to file a return and were required to forever.
  • The statute of limitations for failing to file a foreign bank account report (FBAR form 114) is six years.  The criminal and civil penalites are huge and the IRS is currently collecting those penalties and prosecuting non filers who clearly intentionally were hiding their funds and not reporting as income.
  • Dual citizenship does nothing for you as a US taxpayer. All rules are the same as if you were just a US citizen.
  • The IRS is currently receiving reports on US taxpayers funds held in foreign banks and stock brokers, etc. from over 78,000 foreign institutions around the world.
  • If you owe the IRS more than $50,000 in taxes and penalites when you enter the USA they can request the US Customs and Border Protection seize your passport.
  • The US has no regulations forbidding or making it illegal to own foreign real estate, stocks, or other property abroad including foreign bank accounts. The IRS does have special forms to report ownership on many of these items to the IRS with $10,000 or more penalties for failing to file these required forms.
  • Owning foreign real estate (so long as it is not a rental or income producing) in your individual name does not have to be reported to the IRS.

No comments: