Hotscot

Just curious that's all. Not considering this.

You move to the UK from the US. If you're a dual citizen you still need to file US taxes.
If you don't, if you do it incorrectly, if you need to be audited and you don't co-operate etc...can you be arrested or anything like that in the UK?

Auld Yin

The USA would need to apply to extradite you. If that's approved then probably one could be arrested by UK Police.

robin1234

I assume that people who comply with onerous tax and reporting requirements, including FBAR etc., often do so because they have ties to the US that encourage them to comply. For instance, family living in the US, the intention to visit the US or possibly live there again, or retirement accounts, social security, possibly other property in the US.

Folks who have no ties to the US, do not have US Social Security to look forward to, are confident that (if they were to file fully), they actually wouldn't owe any tax, can probably walk away without worrying too much.

That's just my take, though, maybe the IRS has a fleet of fully armed drones based in the UK!

tribec

In Sept 2010 the IRS along with the government introduced FATCA (an acronym). Basically, if you are a US citizen and before 2010, let's say you buried your head in the sand, and did not report anything, you might be viewed leniently because ' you didn't know the law etc'.
Since FATCA came into effect, this leniency has disappeared. There are rumours that deals can be struck when you are caught,......erm volunteer information.
However, i personally know 3 American citizens. One, who lives in Calgary Canada, decided to inform the IRS that he had $1.53m in an offshore bank account. After they finished with him he had approximately $750k left.
Another lady in Switzerland was called over agricultural land she owned in Canada and the US. She didn't appreciate the call and let them know it. they seized all her worldwide assets and her bank accounts including the one in Switzerland. After the charming IRS and those lovely lawyers she needed were done with her, it cost her over $1.1m. Her original call was for a little over $300k.
The last one I know lives off shore in the Caribbean. He is a doctor and tried to revoke his US citizenship 3 months ago. He has basically been told (his words not mine) that they consider him to have divested all of his assets at fair market value (as if he had died) and he owes them nearly 50% of that fair market value.
In my opinion, don't mess with them anymore, it's just not worth it.

ElizabethK

I'd also heard that too, that if you try to revoke your US citizenship they consider you dead and you'll owe them. Honestly, it's getting to be the case that to have no money is better in the long run where the IRS is concerned. I assume your doctor friend in the Caribbean has decided not to revoke it? ( I wish I'd more carefully thought through this whole US citizenship thing before I did it )
B*stards, all of them if you ask me

dunroving

Remember, Al Capone wasn't arrested for murder, he was arrested for tax evasion.

The IRS has long tentacles (had to spell check that).

robin1234

This is all very true. However, these are cases where tax was owed. If no US tax would be owed by the citizen, if she/he had filed timely etc., then that citizen is much lower down the list of priorities for audits & investigations. In practice, this would often be the case with a US citizen living & working in the UK.

Having said that, US citizens definitely should comply with all filing requirements, because it is a duty and responsibility of citizenship to do so.

Mallory

To most people it just means some extra paperwork, with no extra taxes because of the tax treaty. The point of it all is to cut down on big time money laundering. Surely it's a good thing to stop big time tax evasion?

vikingsail

I agree with that statement but its not as simple as that. Just as in the prosecutorial world. IRS reps are driven by statistics, Urhm, I think they call it 'performance management.' Thus the 'low hanging fruit' is often the easiest to pick off and claim as a win story and can bolster statistics which is why I believe we see the push by the IRS into smaller cases. Much easier to deal with, win and push around those people. After all winning or settling (also claimed as a win for the IRS I am sure) 1000 expat cases where the max owed is $2000 is far easier to deal with than say a tax evasion case against ... Donald Trump who is likely to throw every thing at the IRS to combat the situation leading to a protracted, expensive and uncertain outcome type lawsuit for the IRS!

larrabee

Wondering if I can ask a quick question in this thread?
Regarding the 7 years of tax records that I've been advised by our account to keep, are people just shipping this with the rest of their belongings when they move back to the UK?
Not sure how safe that would be but it'll be too much for hand luggage and the suitcase would not really be safe either plus it would be a lot of weight.
What have others done?

ldollard

larrabee, can you not just scan it all and ship priority ship with fedex the actual paperwork, not sure how much you have?

JAJ

Except that there's no "push by the IRS into smaller cases".

Leaving aside the situations where people were scared into going into the voluntary disclosure program, there has not been one single reported case where someone who had no tax due, or an immaterial amount, has had any problem filing back-dated tax returns and information returns (eg FBAR).

That's not for one moment to say that people shouldn't file the necessary returns. It is to say that those who have not done so usually don't have a problem that's as serious as they may think and they should not let themselves become overwhelmed by it.

vikingsail

I agree. Possibly not a push into smaller cases but I would think the same theory applies to clearing up all cases. Sure they might not take them 'all the way' but a tick in the box for case closed money obtained is always a good statistic for the IRS.

holly_1948

To try to get the thread back on topic - the question was not whether dual citizens who have come home should file 1040s every year (obviously they should and it's not very useful information). The question is what enforcement capability does the IRS have in Britain when little or no money is owed to them. Or the IRS does not know whether it is owed money or not because no return was filed.

Actually, I seem to recall that US citizens who have no income are not actually required to file tax returns. So presumably if you don't file the IRS will assume you have no income - until and unless they can prove otherwise?

I know one lady who is a dual UK/US citizen (post-war daughter of an American air force serviceman) but has lived Britain her whole life and has never filed with the IRS. She has no problem with getting and travelling on a US passport but has never had any other dealings with the US; IRS or otherwise.

tribec

The problem now is not just on annual returns - but what happens when you become an angel. As all US dual citizens know, whether you live in the US or not, the IRS taxes your worldwide estate. There are public case files in every state where the IRS has hammered estates of deceased citizens both in the US and abroad. These penalties are compounded by many things, including the deceased not filing annual returns. Do not think that the IRS care about you when you live because you may or may not earn or owe small amounts, they want you when you're actuarially mature because as you know, you're worth more dead than alive. For several years now, they have been leaving debts with survivors (read children and spouses) including but not limited to taxes, health costs etc. Get proper advice from an international accountant who is licensed in your former/current state as well as the UK or wherever you choose to retire and or die. Remember, it's not so much about now, due to things like tax treaties etc, but when you die.