Defaulting on US Taxes
 

I'm going to be moving back to the UK from USA. I'm an english citizen that has been living out here for 15 years. My wife is american and our 2 kids have UK and US passports. So I am starting the spouse visa application for my wife.

My question is this. I am a year behind on my US taxes. Since I am going to be leaving the country, could I just file for bankruptcy and save myself a lot of money?
Thanks!

Re: Defaulting on US Taxes
 

Are you a US citizen also? If not you should consider getting your citizenship, then you will be free to enter the USA just like your wife and children.

So you have lived here for 15 years and now want to cheat on your taxes and cause your wife and family a load of problems? If it is a "lot" of money you must have had a lot of income! Pay up. Particularly as you have $400,000 equity in a London property as per another post.

Re: Defaulting on US Taxes
 

You make a very good point. Thank you.

Re: Defaulting on US Taxes
 

BTW bankruptcy does not cancel out your IRS taxes due.

Re: Defaulting on US Taxes
 

Really depends on how much money you are taking about, I assume over $10,000 ( under which easy to call yourself and work out payment plan).Best speak to speak to tax attorney who focuses on such matters, probably cheaper than bankruptcy, and depending on your circumstances there are various options.

Actually depending on type of bankruptcy tax debts can be discharged- depends whether you file chapter 7 or chapter 13 but also when and how tax debt arose.( Yours I think is too new to qualify).

However if you have assets in UK you do not disclose in a bankruptcy filing, or IRS offer in compromise, that obviously could create other issues.

As far as how your tax debt arose that is matter to discuss with your attorney- whether from negligence or ignorance or deliberate makes a big difference on how you settle with IRS, and also issue of whether you file joint or individual tax returns.

Talk to an attorney, range of fees in normal cases probably 1500 to 3000, well worth it.

Re: Defaulting on US Taxes
 

What a scum thing to consider.

Re: Defaulting on US Taxes
 

And is looking to possibly declaring bankruptcy. Good upstanding man this is. Makes a ton of money in the US, lives here for 15 years, has a USC wife and 2 children and he is ready to do the dirty to a government that allowed him to reside with his family in its country. Wonder if he goes through with it will he be allowed back into the US to visit or get another visa if he wants to return? Imagine if you kid returns to live in the US and you can never get to visit.

Re: Defaulting on US Taxes
 

I don't think being a year behind on taxes is just cause for filing bankruptcy anyway, since IRS allows payment plans. If you have the financial means to be your wife's sponsor to the UK, then you have money and probably can't file bankruptcy.

Are you saying you haven't filed your 2018 tax return yet? Or did you file and owe money that you now don't want to pay?

Rene

Re: Defaulting on US Taxes
 

It can, but there are a lot of caveats, the biggest of which is that you must have filed the tax return in question and given the IRS two years subsequent from filing to try and collect the tax due. Plus non income tax debt, e.g. self employment tax, can never be discharged. And, anyway, if the OP (and spouse?) has assets a bankruptcy court likely isn't going to be too impressed with a filing.

I also wonder about the OP's spouse's liability given she is a US citizen and will be required to file a US tax return even if she lives in the UK. Better hope they've been filing married filing separately.

Re: Defaulting on US Taxes
 

Good job, OP. Way to alienate an entire country!

If you do this, I hope one day you get offered the job of a lifetime and you have to turn it down for fear of being arrested upon entry for tax evasion! (You DO know that's how they got Al Capone, right?)

Re: Defaulting on US Taxes
 

Without knowing the circumstances whatsoever how does one come up with idea of tax evasion ?

In any case OP can retain tax attorney to sort out

Re: Defaulting on US Taxes
 

First, you are a British, not English, citizen.

Second, your spouse is equally liable for the taxes. I imagine she might not want the attention from the IRS.

Third, if you have not got US citizenship before you leave then you are dumb. Even dumber if you cheat the IRS - remember giving tax records during green card applications?

Fourth, you will have major culture shock when moving back to the UK. You are not the same person. The UK is not the same place that you left 15 years ago. Your kids will be unsettled.

Re: Defaulting on US Taxes
 

-The spouse will not be liable if they didn't file a joint return, and even if they did sometimes she could claim immunity under 'innocent spouse' rules. But yes certainly the spouse wouldn't want the remotest possibility of dealing with the iRS, who would.
- There reasons for bankruptcy laws, and if one is upfront with IRS normally there can be a path towards resolution.We do not know how the situation arose either financially or the tax liability so had to make a definitive judgement
-As far as American citizenship while I ted to agree having that can give one different options, there is also an argument to get away from worldwide taxation and filing obligations has some merit too. And who knows what worldwide taxes might be imposed in the future by the US.(Also if one owes over $50,000 possible US passport wouldn't be issued)
- I agree lots of cultural differences may be in store.Kids may be unsettled, or may thrive , depends circumstances..

Re: Defaulting on US Taxes
 

OP does not want to be "upfront with the IRS". He wants to "save a lot of money" by not paying his taxes, even though he has substantial assets.

It is difficult for him to get away from his US connections when his wife and children are US citizens.

Re: Defaulting on US Taxes
 

Thanks all. I am paying my taxes as its the right thing to do. I didn't mean to stir up such emotions. I posted this in a moment of weakness. And I am moving home for a better life. All the best xx