Income Tax Return for non-resident US citizens
A big part of American citizens residing abroad is convinced that filing their income tax return in the US is not necessary.
Unfortunately, this is not the case, most of the times.
According to the US taxation system, individuals must declare their annual incomes regardless of where they live and where such incomes are generated.
According to the Internal Revenue Service (IRS), non-resident American citizens are often required to file their Tax Return just as US residents are. And to determine which case is compulsory and which is not, different measures are being taken.
The US is investing a lot of resources to try to address this type of tax evasion and have a clear idea about those nonresident US citizens who have not been declaring their incomes.
Through Foreign Bank Account Reports (FBARs) and Foreign Asset Compliance Act (FATCA), foreign financial entities and financial institutions managing their accounts must declare to the US Government all the information regarding their financial assets and the US has signed various agreements to exchange information with several States.
The era of technology and internet greatly facilitates the task.
When an American citizen is found not being compliant with the IRS, he/she may receive a notification from the bank informing that his/her accounts have been blocked. Or it may be an assessment notice directly from the IRS.
What other consequences can US citizens expect when they are not compliant with income tax return in their home country?
Tax assessments.
Criminal and civil penalties with arrears interests.
Money transfer block.
Passport can be revoked or not renewed.
In extreme cases, even arrest and imprisonment.
In this context, we once again stress the importance to ensure you are in order and, in case you have any doubt, to immediately rectify the situation.
You can read more about this subject in this article.
For US citizens living abroad, the Income Tax return may be more complex due to possible deductions and additional requirements, but consulting an international CPA will keep you safe from surprises and make things simpler.
Our firm has a great deal of experience in this field and can help you fix your situation and take all the due measures to find solutions to eliminate or reduce any pending tax penalty.
Seeking expert advice helps to minimize the fees due by benefiting from tax deductions and tax credits available for non-resident US citizens.
Contact us, we will be happy to assist you.