Warning for U.S. Citizens

[George DuBose]

Someone told me years ago, that it is not illegal to not pay taxes, but it is illegal to file a false return.

Also, I heard that US income tax was supposed to be "temporary" to cover the debt from the First World War.

I pay my tax. But I still think "tax" is a four letter word.

[gonesail]

Originally Posted by George DuBose

Someone told me years ago, that it is not illegal to not pay taxes, but it is illegal to file a false return.

as my father in law once said: never lie to Uncle Sam

[Jammer]

Originally Posted by Dockhead

To all those who are reading this only to make smug moral judgements about people who might find themselves in such a situation -- all I can say is, there but for the grace of God. As a long time (30+ years) expat myself, who has known many people like myself, it is actually very common, even among very honest and otherwise very diligent people, to get out of compliance with tax filings back home.[....] I would suggest zipping the smugness, have a little empathy for other people, and spread the word in case you know anyone with this kind of lifestyle. [....] It's really easy to make a mistake.

There's been gradual creep in the enforcement posture in the USA over the last 30-40 years that has brought us here. The apparatus of state is now concerned with identifying drug dealers, drunk drivers, sex offenders, deadbeat dads, and terrorists with an indelible mark and denying them various freedoms. Ordinary people get caught up in the web for various reasons.


Identity and identification documents have turned into a high-stakes game rather than the routine matter that they were as recently as the 1970s.

[Russ]

Last I knew the only rights we had were "life, liberty and the pursuit of happiness".
There is no free lunch.

[Siberian Sea]

No one gets trapped overseas because your passport is canceled, rather you are just forced to return to the USA and then cannot leave until they get it all worked out.

[redneckrob]

Originally Posted by Dockhead

I had no idea -- thanks for the learning moment.


The only other country which does something like this, to my knowledge, is Russia -- where they will simply not let you out of the country, whether you're a Russian citizen or not, if you have delinquent debts of any kind confirmed by a court.



So, again, one should be careful.


To all those who are reading this only to make smug moral judgements about people who might find themselves in such a situation -- all I can say is, there but for the grace of God. As a long time (30+ years) expat myself, who has known many people like myself, it is actually very common, even among very honest and otherwise very diligent people, to get out of compliance with tax filings back home. It is also very, very common not to be reachable by physical mail from the States when you've been gone a long time and have few ties to the States, and ordinarly don't ever get mail from the States, and it is not even that easy to keep yourself reachable by physical mail from the States if you've been gone 10+ years and move around a lot. So, I would suggest zipping the smugness, have a little empathy for other people, and spread the word in case you know anyone with this kind of lifestyle.


And you can rack up a $50k tax bill in no time even if you have zero income taxes -- how many long term expats have I met who are altogether unaware of the FBAR filing requirements? Lots. You can rack up $50k in penalties over FBAR filings in a trice. The penalty is $10,000 per violation -- all you need is 5 bank and financial accounts and one missed year, a FinCen agent who got up on the wrong side of the bed, and you can get whacked for $50,000, or just one forgotten account for five years, and you're screwed.



There but for the grace of God -- I sometimes wake up in the middle of the night wondering if I forgot some filing or another, get up, go to my desk, check. I am very careful, but I have companies in several countries, pay taxes in several countries, file annual reports, tax filings, information filings, etc. etc. etc. ad nauseum - in several countries. I have good people helping me with all this, but ultimately you are responsible yourself for being sure every got filed properly and on time. It's really easy to make a mistake.

I actually find it a tad offensive that you think it's "smug" or a "moral judgement" to believe that an American should realize they have to file taxes every year. That somehow special dispensation should be given to an American because they decided to live overseas so that when they fail to do something as simple as file an annual tax return it's just a "slip"? If you can't grasp that you need to file a tax return every year, then it's not "smug" to point out that you're simply violating a rule that pretty much every American adult somehow manages to comply with and those who don't face consequences.

And as I pointed out, if you follow that simple rule of filing an annual tax return than you would have either knowingly put a false address right at the top of that form that you fully realized wouldn't allow you to be reached, or you could be reached and this wouldn't impact you. Again, you're saying it's "smug" to expect people not to knowingly put an address on their tax return that isn't in any way associated with them, year after year?

I have the same deal with multiple FBAR forms both for myself and my spouse and my company. Along with the form 8938. I'm a big boy, with the benefits that come from overseas subsidiary and overseas bank accounts come the responsibilities of complying with the rules around them. Why in the world should those who decide they're going to live outside the country but can't be bothered to either learn the tax rules or hire someone who knows them be granted, again, some kind of special dispensation any more than someone who voluntarily involves themselves in a partnership and decides to ignore their K-1s? And if you're an expat who doesn't know what an FBAR is at this point, again zero sympathy.

I am all about there by the grace of god, but that covers cases you can see yourself getting into inadvertently. I simply can't see myself ever inadvertently being in a position where I either put a fake address on my tax returns or failed to file them over the course of several subsequent years, which are the only two credible ways the vast majority of people would ever get into this situation.

[goboatingnow]

My passport was stolen in France. The border police rang Dublin immigration , put him on they said. How’s things , fine say I. He asked me to hand the phone back “ that’s fine just ask him to ask for “ jack “
at Dublin immigration

Ps always pay your taxes. I need my state pension

[01kiwijohn]

Human rights violation? I don't think so. This law was strengthened back in 2015 as I recall, with notice of enforcement beginning in 2018. I prepare taxes for people and can honestly say that the US IRS is probably the most reasonable authority to deal with, in issues such as this, in the world. Just do your part, and do not lie, or try to be a smart aleck, and you'll get along just fine.

[Elie]

If your passport is put on delinquant list, for any teason, I presume that the airline officer can't let you check in. So you are left to your own device with a bundle of things to settle. gOv. has a lot of ways to force you to pay. And airline staff has not much leaway to sort out thing: Your passport is now invalidated... There is way to modify your status at the bording gate.

[garyfdl]

While I realize "human rights' can be somewhat ambiguous, and subject to debate, I'm gonna say having a valid passport isn't one of them.

[Stu Jackson]

Originally Posted by Dockhead

>>>>>>>>>>>>>>>>


This does not relieve them of the obligation to file, but it's easy to let it slip when you've been overseas for years and you're anyway paying taxes in another country. Some are not even aware of the obligation......................

I appreciate the "advice" but agree it's somewhat misleading in your presentation.


I moved out of the USA in 2016.


For Goodness Sake, everybody knows that once you start filing taxes in the US

IT NEVER ENDS.

Anyone who doesn't know this deserves whatever they get.

[sailingabe41ds]

If they cancel my passport...
does that mean they forgive the tax bill?

abe

[Grattaway]

The problem with this process is twofold
1. Other countries love to follow along behind you so some bureaucrat in NZ will see what you are doing and decide its a great idea - and right now we already have enough stateless Kiwi's who cannot travel home because of stupid Govt rules to save us from Covid.

2. In some places in the world if your passport is cancelled your are stuffed - and I have a real life experience from being in Zimbabwe without a passport - there is no way out and in some countries they would put you in the clink so no I dont think passports should be able to be cancelled - tagged or flagged maybe which is what can happen here now where you cannot leave NZ if you have certain outstanding payments but use your credit card at the airport and problem solved

And in my case I went to the British embassy in Harare and 4 hour later had a British passport valid for 3 months - so God save the Queen and all that stuff - had a handwritten note inside it saying that it was issued to me as a commonwealth citizen

[goboatingnow]

I personally think cancelling your passport outside of a court directed judgement is morally and ethically wrong and in effect is an attempt to limit your citizenship.

Tax evasion is typically punished by fines and or recourse to the court that’s the only route that’s acceptable.

It matter not if you will fully or or by simple negligence ended up as in a tax situation

[capn_billl]

Originally Posted by goboatingnow

I personally think cancelling your passport outside of a court directed judgement is morally and ethically wrong and in effect is an attempt to limit your citizenship.

Tax evasion is typically punished by fines and or recourse to the court that’s the only route that’s acceptable.

It matter not if you will fully or or by simple negligence ended up as in a tax situation

Since the IRS can seize your bank accounts, (even ones in foreign countries), the passport thing is redundant.

But Statists are going to State.