Warning for U.S. Citizens

[Dockhead]

Originally Posted by Jamme

Per Gord’s link to the IRS source posted in the second response to this thread, FBAR penalties are expressly carved out from this rule: “Some tax debt isn't included in seriously delinquent tax debt such as the Report of Foreign Bank and Financial Account (FBAR) penalty and child support.”

Good to know; thanks.

Originally Posted by Jamme

Although I am an expat of another country’into’ the U.S., I am not a U.S. expat, so my opinion is clearly worth less than these few bytes on which it is stored; but to me, this sounds a sensationalist thread on a somewhat ‘old’ news (having the rule first been enacted in 2018).

The article is dated two years ago, but I hadn't heard about this rule before seeing this.


It says:


"Thousands of US expats with large tax debts may be stranded overseas when they lose their passports from this month, warns the Internal Revenue Service.
"A year ago, the IRS told thousands of Americans that they risked having their passports revoked if they failed to settle their tax bills.
The policy impacts anyone owing $51,000 or more in unpaid tax, which is considered a ‘significant debt’ by the IRS.
"Although thousands have paid their debts, around 360,000 American expats and frequent travellers are likely to lose their travel documents, says the IRS.
"Expats may not realise until they have lost their papers until they try to renew visas in a foreign country or attempt to travel on a cancelled passport."

If 360,000 people (!) are potentially affected, then it does not sound like a minor issue.


Of course, we have been assured by some people posting in this thread, that all 360,000 are idiots and scofflaws, who are wilfully flaunting the tax rules, so we don't need to worry about them So I guess the thread is pointless; to hell with 'em.

[valhalla360]

Originally Posted by Dockhead

Long term expatriates who don't get ANY physical mail from the States, are TYPICALLY unable to receive physical mail reliably. A cruiser, for example, is overwintering in Italy, is registered in X marina, leaves in the Spring for France. Honestly puts the Italian marina address. Never expects to get any mail. Rinse and repeat. Nor does every long term expat even have access to a reliable address for physical mail.

Maybe 30yrs ago but today, this is completely false in the modern world.

Now if you are staying somewhere for a year or more, you might update your address to reflect the overseas marina but if you are moving every month or two (or more frequent), you wouldn't give the IRS that address. You would use a mail forwarding service as your address (assuming you don't have a reliable friend or family you can use).

Mail forwarding services are pretty cheap and unless you actually need the physical piece of paper, it's all electronic, so it doesn't matter where you are as a mobile traveler. So rinse and repeat as often as you like...you are still going to get your notices from the IRS.

As far as your buddy who has been out of the US for 30yr, he's probably off the IRS' radar anyway, so while technically a requirement, they are unlikely to randomly cancel his passport out of the blue. Plus, not filing or even checking on the rules seems a rather casual approach to dealing with the NOTORIOUS IRS. It's not like they have a reputation for being warm and fuzzy and this is a sudden change. So while possible, it's hard to muster up a lot of sympathy if they do catch up with him.

[redneckrob]

Originally Posted by Dockhead

Good to know; thanks.





The article is dated two years ago, but I hadn't heard about this rule before seeing this.


It says:


"Thousands of US expats with large tax debts may be stranded overseas when they lose their passports from this month, warns the Internal Revenue Service.
"A year ago, the IRS told thousands of Americans that they risked having their passports revoked if they failed to settle their tax bills.
The policy impacts anyone owing $51,000 or more in unpaid tax, which is considered a ‘significant debt’ by the IRS.
"Although thousands have paid their debts, around 360,000 American expats and frequent travellers are likely to lose their travel documents, says the IRS.
"Expats may not realise until they have lost their papers until they try to renew visas in a foreign country or attempt to travel on a cancelled passport."

If 360,000 people (!) are potentially affected, then it does not sound like a minor issue.


Of course, we have been assured by some people posting in this thread, that all 360,000 are idiots and scofflaws, who are wilfully flaunting the tax rules, so we don't need to worry about them So I guess the thread is pointless; to hell with 'em.

There were 360,000 U.S. citizens at the time that article was written who had a tax bill larger than $51,000 for which the multi-year administrative process for collection had been completed. If they didn't pay their taxes, they would have their passports revoked. I'm not sure where you got the idea that all 360,000 of them were both unaware that they had these issues AND were overseas? In fact, the vast majority of them were in fact scofflaws who had failed to either pay their taxes or engage the IRS in a repayment plan despite the numerous steps in the process the IRS is required to take and you have yet to provide evidence of a single one of these people who were somehow blissfully unaware of this.

Sorry, I don't appreciate people who break the law, they're not "idiots" they're selfish jerks. I also don't appreciate those who try to excuse those who break the law by passing it off as a "slip" when as described, every one of these folks either received multiple notifications over several years or, in what is up to now a mythical case, somehow didn't realize it because they somehow didn't realize they needed to put an accurate address on their tax return. If such a person exists, then while I don't believe I called them an "idiot", they are certainly as culpable as anyone else who fails to pay their taxes.

[Dockhead]

Originally Posted by valhalla360

Maybe 30yrs ago but today, this is completely false in the modern world.

Now if you are staying somewhere for a year or more, you might update your address to reflect the overseas marina but if you are moving every month or two (or more frequent), you wouldn't give the IRS that address. You would use a mail forwarding service as your address (assuming you don't have a reliable friend or family you can use).

Mail forwarding services are pretty cheap and unless you actually need the physical piece of paper, it's all electronic, so it doesn't matter where you are as a mobile traveler. So rinse and repeat as often as you like...you are still going to get your notices from the IRS.

As far as your buddy who has been out of the US for 30yr, he's probably off the IRS' radar anyway, so while technically a requirement, they are unlikely to randomly cancel his passport out of the blue. Plus, not filing or even checking on the rules seems a rather casual approach to dealing with the NOTORIOUS IRS. It's not like they have a reputation for being warm and fuzzy and this is a sudden change. So while possible, it's hard to muster up a lot of sympathy if they do catch up with him.

No one is asking for anyone's sympathy. My friend has not gotten into trouble, and as far as I know has never had any issues with the IRS.

I was not concerned about cancellation of passport for my friend, I was concerned about penalties. He was doing his best with the filings, always filing his 1040's. He is smarter than you or me, and nicer. If you want to judge him for not picking up on the FBAR, well . . .

Concerning mail forwarding -- I don't know a single long term expat without ties to the U.S. who uses a mail forwarding service. I'm not even sure that the IRS accepts that kind of address. I don't use that kind of service because I simply don't get physical mail, not anywhere. I am all electronic with everything. I also don't know anyone who obsessively changes or provides fresh addresses to the IRS. If you think you are keeping up with your filings and payments, you don't expect notices from them. It's probably a good idea to take steps to make sure that you are always reachable by physical mail -- sure. Does everyone do it? I bet less than half, I bet less than 10% of long term expats actually do, so this is a real risk for well-intentioned and law-abiding people.

And lastly, even if you do have a permanent address abroad, the address of which the IRS has, how can you be sure that the mail will even get to you? The physical mail services of many countries is simply not reliable, and even if the letter eventually gets to you, it might take months. I've experienced this myself, living in ex-Communist countries in the 90's, and I bet it's true today in many less developed cruising destinations.

If you think only an idiot could make a mistake or miss a letter from the IRS, then just keep saying to yourself -- "Oh what a fool; it could never happen to me." You've obviously never lived abroad for any length of time.

[garyfdl]

Originally Posted by redneckrob

Again, this thread is about people who somehow weren't aware they had an issue over several years because they somehow managed to ensure the IRS couldn't reach them by either failing to file returns or knowingly putting an incorrect address on their return.

I was merely responding to 'barnakiel's' comment about a former US President's tax woes. (Did you miss that part, or are you just singling me out?)

Originally Posted by redneckrob

does that have to do with this, completely unsupported by the way, accusation about "little fish"?

"IRS commissioner Charles Rettig admitted it is a much easier and less costly task [auditing small taxpayers] when compared with auditing higher-income tax returns." ~ Fox News (Based on your 'nom de guerre' I'll guess this is your news source of choice).

And then, there is personal experience. The IRS 'nicked' me for ~$700 about 20 years ago, about half of what they wanted. I was able to negotiate it down and paid, because it was simply cheaper than the costs I would have incurred to fight it further. (PM me if you want the details.)

[valhalla360]

Originally Posted by Dockhead

No one is asking for anyone's sympathy. My friend has not gotten into trouble, and as far as I know has never had any issues with the IRS.

I was not concerned about cancellation of passport for my friend, I was concerned about penalties. He was doing his best with the filings, always filing his 1040's. He is smarter than you or me, and nicer. If you want to judge him for not picking up on the FBAR, well . . .

Concerning mail forwarding -- I don't know a single long term expat without ties to the U.S. who uses a mail forwarding service. I'm not even sure that the IRS accepts that kind of address. I don't use that kind of service because I simply don't get physical mail, not anywhere. I am all electronic with everything. I also don't know anyone who obsessively changes or provides fresh addresses to the IRS. If you think you are keeping up with your filings and payments, you don't expect notices from them. It's probably a good idea to take steps to make sure that you are always reachable by physical mail -- sure. Does everyone do it? I bet less than half, I bet less than 10% of long term expats actually do, so this is a real risk for well-intentioned and law-abiding people.

And lastly, even if you do have a permanent address abroad, the address of which the IRS has, how can you be sure that the mail will even get to you? The physical mail services of many countries is simply not reliable, and even if the letter eventually gets to you, it might take months. I've experienced this myself, living in ex-Communist countries in the 90's, and I bet it's true today in many less developed cruising destinations.

If you think only an idiot could make a mistake or miss a letter from the IRS, then just keep saying to yourself -- "Oh what a fool; it could never happen to me." You've obviously never lived abroad for any length of time.

So why did you hold him up as a sympathetic example if you weren't trying to garner sympathy?

I know lots of folks who use mail forwarding and the IRS accepts it. It's really a very common solution to not having a permanent address. With modern mail forwarding, you generally don't get physical mail. They scan it and send you an electronic copy. It would only be if you got something like a license or other official form where you would contact them and have them forward you the physical piece of paper.

I wasn't suggesting obsessively changing your address...that was your example and rather silly for a cruiser on the move every month or so.

While I agree our tax system is far too complicated....Most people use tax software and it specifically asks about overseas accounts and investments. If you are using a tax preparer, they likewise should quickly catch the requirement. If you are going to do it by hand on your own, it pays to learn the rules.

This isn't about missing a letter or being an idiot. It's about not bothering to understand the rules. Again, you might come across the very rare example where someone got caught up after really trying to do the right thing...but very rare.

[Dockhead]

Originally Posted by valhalla360

So why did you hold him up as a sympathetic example if you weren't trying to garner sympathy?

It was implied, not necessarily by you, that you can't have a problem with this unless you are wilfully delinquent or extremely stupid. The example was to show that it's not that hard to make a mistake.

Originally Posted by valhalla360

I know lots of folks who use mail forwarding and the IRS accepts it. It's really a very common solution to not having a permanent address. With modern mail forwarding, you generally don't get physical mail. They scan it and send you an electronic copy. It would only be if you got something like a license or other official form where you would contact them and have them forward you the physical piece of paper.

It sounds like a good idea in theory, but the situation of long term expats who literally get zero physical mail is different from people on a sabbatical. I really don't know a single person among long term expats, who sign up to something like this without expecting to get mail, just on the off chance they will get a notice by physical mail from one agency, especially when they think they are keeping up with their filings.

Originally Posted by valhalla360

. . . While I agree our tax system is far too complicated....Most people use tax software and it specifically asks about overseas accounts and investments. If you are using a tax preparer, they likewise should quickly catch the requirement. If you are going to do it by hand on your own, it pays to learn the rules.

This isn't about missing a letter or being an idiot. It's about not bothering to understand the rules. Again, you might come across the very rare example where someone got caught up after really trying to do the right thing...but very rare.

It is very easy to make a mistake. It is especially easy to make a mistake if you have lived away from the States for decades and pay your taxes in your adopted country. You are thinking all the time about your real taxes, and your vestigial requirement to file in the U.S. simply doesn't get your attention. Yes, it's a mistake not to focus attention on this, it's negligent even, but it is eminently human not to do so -- the U.S. is far far away. You are absolutely incorrect in saying that "you might come across a very rare example . .. " -- it is anything but rare, for a long term expat to be attempting to some degree or another to comply, but to have not managed to figure out the rules completely. The rules are very complex, and they are even more complex as they apply to expats. My friend is a perfect example.


Another "gotcha" that trips up well-meaning people is the self-employment tax on foreign earned income as an independent contractor. I daresay MOST long term expats think that anything you earn under the foreign earned income exclusion limit is exempt; this is one of the reasons why so many long term expats (possibly a majority) don't even file. But you are NOT exempt from self-employment tax, in case you are being paid in fees rather than salary. These problems are ANYTHING but rare.

[garyfdl]

Originally Posted by redneckrob

Sorry, I don't appreciate people who break the law

Some times its the law, or the people enforcing it, that are responsible for people becoming 'scofflaws'.

I have a daughter who is an ex-pat (hence my interest in this discussion), married to a British citizen. When she moved to the UK and tried to file she got bogged down in the red tape, and repeated correspondence with the IRS was no help. At one point the IRS insisted that, because my son-in-law had married a US citizen, he had to file US taxes, even though he was self employed and never worked a day in the US! I ultimately stepped in and had my tax preparer do her returns. To my knowledge, she has not filed a return since. That said, she also has been a stay-at-home Mom and has not had any income.

[Dockhead]

Originally Posted by redneckrob

There were 360,000 U.S. citizens at the time that article was written who had a tax bill larger than $51,000 for which the multi-year administrative process for collection had been completed. If they didn't pay their taxes, they would have their passports revoked. I'm not sure where you got the idea that all 360,000 of them were both unaware that they had these issues AND were overseas?

I never said that. I quoted the IRS on those figures to show that it is not a rare situation, whatever the cause is.

Originally Posted by redneckrob

In fact, the vast majority of them were in fact scofflaws who had failed to either pay their taxes or engage the IRS in a repayment plan despite the numerous steps in the process the IRS is required to take. . .

And you know this -- how? Link?

Originally Posted by redneckrob

. . .and you have yet to provide evidence of a single one of these people who were somehow blissfully unaware of this.

Yes I have. I gave a concrete example. I could give more.

Originally Posted by redneckrob

Sorry, I don't appreciate people who break the law, they're not "idiots" they're selfish jerks. . .

So every person who has made a mistake and gotten into something with the IRS is a "selfish jerk"? Really? I'm not sure what universe you live in, but it's not mine.

Originally Posted by redneckrob

. . .I also don't appreciate those who try to excuse those who break the law by passing it off as a "slip" when as described, every one of these folks either received multiple notifications over several years or, in what is up to now a mythical case, somehow didn't realize it because they somehow didn't realize they needed to put an accurate address on their tax return. If such a person exists, then while I don't believe I called them an "idiot", they are certainly as culpable as anyone else who fails to pay their taxes.

Who is excusing anyone? Some people really are scofflaws; I am not addressing them, or talking about them. This thread intended for law-abiding, well-intentioned people -- to help them avoid a mistake.

I have described in some detail how this can happen to a well-meaning person. You stubbornly persist in your fantasy that you will always get your mail from the IRS if only you "put an accurate address on your tax return", although I explained in detail how this may not be enough. You have obviously never lived abroad long term, and have a massive failure of imagination and empathy.

I, myself, do my best to keep up with the rules, and keep my affairs in order and I have never had a dispute with the IRS or any kind of claim (knock on wood). Given the complexity of the rules and the ease of making a mistake, however, I do not pat myself on the back for how diligent or clever I am. I HAVE made mistakes before in my taxes or tax planning, but was fortunate enough to catch them before it became a problem. I HAVE missed mail from the IRS; fortunately nothing critical. There but for the grace of God. If you can't even imagine making a mistake yourself, well, all I can say is karma is a birch.

Unlike some people, I DO understand how one can get tripped up with this, and the purpose of this thread was to hopefully help some well-meaning cruiser for whom a reminder and warning might help to avoid such a a situation. That's all. I was not addressing scofflaws, who won't care anyway. All this bile is useful to no one, and is spiritually ugly.

This thread reminds me very much of a guy we had on here some years ago -- Eric, from a boat called Rebel Heart. Whenever someone ran into some kind of disaster, he was always the first to pile on with a really harsh and unempathetic judgement about the poor seamanship, lack of preparation, etc. of the person who got into trouble, abandoned ship, ran aground, whatever it was. With a kind of glee -- I don't appreciate people who take it lightly and just go to sea without being prepared, etc., etc., or who panic and abandon ship instead of solving the problem, if you don't have the skills, you should stay in port, etc.. That kind of thing. Always from the point of view -- "That guy was an idiot; it can't happen to me."

Well, the same guy embarked on his first ocean crossing, and -- ran into trouble. A cascade of problems. Turned out he couldn't get his SSB to work, couldn't figure it out or the equipment itself was not in order. In the middle of trying to get telemedicine for a sick child, his sat phone got switched off, because he moved and didn't receive the bills, or something like that. It was all too much for him, and he -- pushed the red button and abandoned a boat which was intact and sailable, the same thing he bitterly scorned so many others for doing. He scorned them because he utterly lacked empathy and imagination (incidentally, a sign of bad seamanship) and had exaggerated confidence in his own skills (ditto); couldn't picture himself in such a position. He never showed his face on here again, I can tell you that. Karma is a -- well, you get the idea.

[valhalla360]

Originally Posted by Dockhead

It was implied, not necessarily by you, that you can't have a problem with this unless you are wilfully delinquent or extremely stupid. The example was to show that it's not that hard to make a mistake.

I didn't see anyone say you "can't" have a problem but that it's very unlikely if you put a reasonable effort into being compliant.

It sounds like a good idea in theory, but the situation of long term expats who literally get zero physical mail is different from people on a sabbatical. I really don't know a single person among long term expats, who sign up to something like this without expecting to get mail, just on the off chance they will get a notice by physical mail from one agency, especially when they think they are keeping up with their filings.

Not only in theory but in practice. I wouldn't call 14yrs a "sabbatical" but we still get mail. Not a lot as we've switched most to electronic but yes, we still get mail.

Unless you are just trying to go completely off grid, you will get at least some mail.

You have to provide an address with your tax return. If you get social security, they want an address. If you have a license, they want an address. Banks want an address. New passport, they want an address to send it to you. Again, maybe not much mail but very few will have no mail.

It is very easy to make a mistake. It is especially easy to make a mistake if you have lived away from the States for decades and pay your taxes in your adopted country. You are thinking all the time about your real taxes, and your vestigial requirement to file in the U.S. simply doesn't get your attention. Yes, it's a mistake not to focus attention on this, it's negligent even, but it is eminently human not to do so -- the U.S. is far far away. You are absolutely incorrect in saying that "you might come across a very rare example . .. " -- it is anything but rare, for a long term expat to be attempting to some degree or another to comply, but to have not managed to figure out the rules completely. The rules are very complex, and they are even more complex as they apply to expats. My friend is a perfect example.

Assuming you don't have a complex tax situation, it's really not that difficult to buy the tax software for $25 and just follow the prompts. If you do have a complex situation, you are far more likely to be up on the rules or pay a professional who should be up on the rules.

Another "gotcha" that trips up well-meaning people is the self-employment tax on foreign earned income as an independent contractor. I daresay MOST long term expats think that anything you earn under the foreign earned income exclusion limit is exempt; this is one of the reasons why so many long term expats (possibly a majority) don't even file. But you are NOT exempt from self-employment tax, in case you are being paid in fees rather than salary. These problems are ANYTHING but rare.

The tax software (or preparer) handles self-employment tax...it's very straight forward.

So while possible, it's really a rare situation where someone who makes the effort to be compliant is caught out.

[redneckrob]

Originally Posted by Dockhead

I never said that. I quoted the IRS on those figures to show that it is not a rare situation, whatever the cause is.



And you know this -- how? Link?



Yes I have. I gave a concrete example. I could give more.



So every person who has made a mistake and gotten into something with the IRS is a "selfish jerk"? Really? I'm not sure what universe you live in, but it's not mine.



Who is excusing anyone? Some people really are scofflaws; I am not addressing them, or talking about them. This thread intended for law-abiding, well-intentioned people -- to help them avoid a mistake.

I have described in some detail how this can happen to a well-meaning person. You stubbornly persist in your fantasy that you will always get your mail from the IRS if only you "put an accurate address on your tax return", although I explained in detail how this may not be enough. You have obviously never lived abroad long term, and have a massive failure of imagination and empathy.

I, myself, do my best to keep up with the rules, and keep my affairs in order and I have never had a dispute with the IRS or any kind of claim (knock on wood). Given the complexity of the rules and the ease of making a mistake, however, I do not pat myself on the back for how diligent or clever I am. I HAVE made mistakes before in my taxes or tax planning, but was fortunate enough to catch them before it became a problem. I HAVE missed mail from the IRS; fortunately nothing critical. There but for the grace of God. If you can't even imagine making a mistake yourself, well, all I can say is karma is a birch.

Unlike some people, I DO understand how one can get tripped up with this, and the purpose of this thread was to hopefully help some well-meaning cruiser for whom a reminder and warning might help to avoid such a a situation. That's all. I was not addressing scofflaws, who won't care anyway. All this bile is useful to no one, and is spiritually ugly.

This thread reminds me very much of a guy we had on here some years ago -- Eric, from a boat called Rebel Heart. Whenever someone ran into some kind of disaster, he was always the first to pile on with a really harsh and unempathetic judgement about the poor seamanship, lack of preparation, etc. of the person who got into trouble, abandoned ship, ran aground, whatever it was. With a kind of glee -- I don't appreciate people who take it lightly and just go to sea without being prepared, etc., etc., or who panic and abandon ship instead of solving the problem, if you don't have the skills, you should stay in port, etc.. That kind of thing. Always from the point of view -- "That guy was an idiot; it can't happen to me."

Well, the same guy embarked on his first ocean crossing, and -- ran into trouble. A cascade of problems. Turned out he couldn't get his SSB to work, couldn't figure it out or the equipment itself was not in order. In the middle of trying to get telemedicine for a sick child, his sat phone got switched off, because he moved and didn't receive the bills, or something like that. It was all too much for him, and he -- pushed the red button and abandoned a boat which was intact and sailable, the same thing he bitterly scorned so many others for doing. He scorned them because he utterly lacked empathy and imagination (incidentally, a sign of bad seamanship) and had exaggerated confidence in his own skills (ditto); couldn't picture himself in such a position. He never showed his face on here again, I can tell you that. Karma is a -- well, you get the idea.

As long as you refuse to accept that each of these people has been subject to a multi-year process which includes multiple attempts by the IRS to contact them, you will continue to hold someone like your friend up as an example. Even though they in fact would have been contacted by the IRS and would almost certainly have done something to resolve it during the multi-year process with multiple notifications.

Here's the bottom line, imagine that there is this mythical group of Americans who have decided to isolate themselves and not provide addresses that they could actually be reached. Imagine that the IRS does everything reasonably possible to contact them with multiple attempts over multiple years. The IRS reasonably believes that these people owe over $51,000 in taxes. Congress decided that the only way to reach these folks was to revoke their passport, and apparently given the concern expressed here that indeed is indeed an effective way to get them to respond. Absent this, what is your suggestion for the IRS to reach someone who they reasonably believe owes our country more than $51,000 but who has made themselves unreachable? Forgive the debt? Allow them to ignore it forever? How, exactly is it "scorning" to expect that a process exists to ensure they eventually address the debt and either adjudicate it or pay it, just like every other American does when contacted by the IRS?

Once again, I can completely see how I could make a tax mistake, in fact I have multiple times over my life. I find it inconceivable that I could go multiple years with the IRS trying to reach me at the addresses I provided when its trivial to set up a scan and email mail forwarding service.

Your characterizations of those who disagree with you are becoming more and more offensive, as you make up terms we using to describe these individuals ("idiots") and accuse us of "bile" that is "spiritually ugly" and inability to empathize and compare us to having some kind of glee at others misfortune. We can certainly disagree respectfully, but please keep the sanctimonious moral judgements to yourself. Talk about "spiritually ugly"!

[Dockhead]

Originally Posted by valhalla360

. . So while possible, it's really a rare situation where someone who makes the effort to be compliant is caught out.

The underlined is an assertion of a fact, about which you have no knowledge.


And I can tell you that this is incorrect. People get out of compliance all the time. Simple tax software does NOT solve every question, especially for long term expats. A very large proportion of long term expats get ZERO physical mail from the States, I would say MOST of the ones I know, and that's a lot of them.


Here's an article that claims that: "7 million Americans abroad and only a few are even quasi-compliant with the American tax system . . .That’s changing but I think it’s useful to explain how this situation arose in the first place. 'They should have known' just isn’t helpful here and in many cases it is just outright ridiculous. Why? Because before there was a compliance gap, there was a communication gap.. . . "


https://francoamericanflophouse.word...w-we-got-here/


This lines up with my decades of experience living abroad.

[redneckrob]

Originally Posted by garyfdl

I was merely responding to 'barnakiel's' comment about a former US President's tax woes. (Did you miss that part, or are you just singling me out?)


"IRS commissioner Charles Rettig admitted it is a much easier and less costly task [auditing small taxpayers] when compared with auditing higher-income tax returns." ~ Fox News (Based on your 'nom de guerre' I'll guess this is your news source of choice).

And then, there is personal experience. The IRS 'nicked' me for ~$700 about 20 years ago, about half of what they wanted. I was able to negotiate it down and paid, because it was simply cheaper than the costs I would have incurred to fight it further. (PM me if you want the details.)

Stating that it is easier and less costly to audit smaller tax payers is simply a statement of obvious fact. How does that support an assertion that the IRS targets small tax payers over larger ones?

BTW, I'm as my 'nom de guerre' is a social experiment to see how many people actually read what I write versus just making a judgement based on a name. Surprisingly and happily, it turns out most people actually don't judge by the name. I'm actually about as far from a "redneck" as you can get.

[valhalla360]

Originally Posted by Dockhead

The underlined is an assertion of a fact, about which you have no knowledge.


And I can tell you that this is incorrect. People get out of compliance all the time. Simple tax software does NOT solve every question, especially for long term expats. A very large proportion of long term expats get ZERO physical mail from the States, I would say MOST of the ones I know, and that's a lot of them.


Here's an article that claims that: "7 million Americans abroad and only a few are even quasi-compliant with the American tax system . . .That’s changing but I think it’s useful to explain how this situation arose in the first place. 'They should have known' just isn’t helpful here and in many cases it is just outright ridiculous. Why? Because before there was a compliance gap, there was a communication gap.. . . "


https://francoamericanflophouse.word...w-we-got-here/


This lines up with my decades of experience living abroad.

And you are asserting things with no knowledge.

Sure people get out of compliance. They do while living in the USA also.

Does software solve every question? No but it red flags something as obvious as having foreign bank accounts or foreign income. I just looked up on my last return in the software and found the questions.

For most, listing a foreign address is not a big deal as most expats are not like cruisers moving every week or two. If you are in the same address for 20yrs, it's a reasonable option to use your overseas address.

Nice article but similarly, a lot of hyperbole. It provides no data on how many expats are compliant.

[redneckrob]

Originally Posted by Dockhead

The underlined is an assertion of a fact, about which you have no knowledge.


And I can tell you that this is incorrect. People get out of compliance all the time. Simple tax software does NOT solve every question, especially for long term expats. A very large proportion of long term expats get ZERO physical mail from the States, I would say MOST of the ones I know, and that's a lot of them.


Here's an article that claims that: "7 million Americans abroad and only a few are even quasi-compliant with the American tax system . . .That’s changing but I think it’s useful to explain how this situation arose in the first place. 'They should have known' just isn’t helpful here and in many cases it is just outright ridiculous. Why? Because before there was a compliance gap, there was a communication gap.. . . "


https://francoamericanflophouse.word...w-we-got-here/


This lines up with my decades of experience living abroad.

Again, then what do we do? Allow those folks to remain noncompliant indefinitely while holding everyone living into the U.S. strictly to the rules? And denigrate anyone who points out that this is both poor policy and unfair? Or do we figure out the one way that we can get their attention and implement that? If passports isn't the best way, what is your suggestion of a method that holds every American equally accountable under the law?