U.S. taxpayers are taxed on their worldwide income. Nevertheless, if you are a U.S. taxpayer who earned income while abroad during the tax year, special taxation rules apply in order for you to avoid double taxation (by both the U.S. and the foreign government). In many cases you may owe the IRS nothing for this income. Nevertheless, your income tax filing requirements are the same as for U.S. taxpayers who earned no income abroad.
There are millions of taxpayers that fail to file their federal income tax returns each year. There are many reasons for the failure to file: procrastination, not understanding filing requirements and even some that intentionally and willfully fail to file in an attempt to evade tax responsibility. The IRS identifies all of these taxpayers as “non-filers.”
In most instances, the problems faced by non-filers can be resolved successfully
if the taxpayer obtains experienced representation and voluntarily addresses the problem. On the other hand, the continuing failure of a taxpayer to voluntarily comply with tax return filing and to obtain experienced representation can result in severe consequences. This is not a situation to take lightly; failing to file your tax returns is a criminal offense. If you do not file, you can be prosecuted and punished with potential jail time, one year for each year not filed. Why risk potentially losing your freedom for failing to file your tax returns! Be sure to read our post:
For many years, the IRS lacked the budget and the ability to identify and find non-filers. However, the IRS has substantially increased its budget for technology that will enable it to find and pursue taxpayers who fail to regularly file their returns, even if they live and work overseas. Every day the massive computer center at the IRS is getting more sophisticated at identifying and locating non-filers and overseas bank accounts of non-filers, it’s just a matter of time before they catch up with you. The IRS has targeted the problem of non-filers as one of its highest priorities.
IRS computer capabilities are constantly being improved to enable the agency to match third-party income and other information returns with taxpayers. If you have not filed all required tax returns, and have not yet been discovered by the IRS, it is only a matter of time before they do. If you fail to act now, the IRS is almost certain to knock on your door in the future. Willful failure to file a tax return is a misdemeanor carrying a maximum sentence of one year in prison for each tax year. Worse yet, tax evasion is a felony carrying a maximum sentence of five years in prison for each tax year. Do not risk criminal tax prosecution. Obtain voluntary compliance with your income tax return filing obligations now.
Usually you will have to file the previous six (6) years, plus the current year. Beyond that, you may be off the hook, depending on what years the IRS will request. We usually wait for any request before we prepare returns going back further then six (6) years, if our client wants to assume that risk. However, it is truly a great feeling to know that you have obtained back tax help, filed all missing years, and no longer have to worry about being asked to file any more years of delinquent tax returns. Often the amount of money you will owe helps in the decision to file those “extra’ back years. We are available for IRS non filed tax help.
There are numerous reasons for filing your tax returns besides a potential refund including: not being detained when returning to the U.S., buying a home, financing a business and even getting a job and more.
Even if a taxpayer doesn’t have enough money to pay, returns should be filed to avoid further penalties for failure to file. The IRS has streamlined its policies to offer alternative account resolutions if a taxpayer cannot pay in full with the return:
• The IRS will help to set up an Installment Agreement when the situation warrants. Installment payments allow taxpayers to pay the tax debt over time.
• The IRS will consider whether an Offer in Compromise is an appropriate solution.
US Taxes for Expats – Not a light subject
The IRS will not entertain any type of tax settlement or payment plan to settle your back taxes until you have filed all legally required tax returns.
If, after preparing the returns you owe taxes that you cannot pay, I can help you in negotiating with the IRS and the resolution of paying your back taxes. To qualify for an IRS payment plan or Offer in Compromise tax settlement to resolve your back taxes, you need to file all delinquent tax returns with the IRS. Once current, an offer in compromise can be submitted (if you qualify), or an installment agreement can be arranged. We offer full representation throughout the preparation and collection process.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.