SadInStates

I have just read this entire thread with a growing sense of dread.
We're moving back home to the UK in about 6 months for good. We have accounts in our name in the UK, and were thinking of keeping our mutual funds going in the US rather than try to transfer them.

We haven't file any FBARs previously as we've only just learned about them this year, so should we do that for the 2011 tax year, or just start when we move, as it would be obvious that living in the UK we'd have UK accounts?

Also all our accounts/assets are in a "family trust". Does that screw things up more, perhaps for our non-USC family members, or is everyone equally screwed thanks to FATCA?

lansbury

That is a question that you need to speak to a professional adviser versed in such matters about. Assuming you should have filed and didn't. Were you in fact required to file.

As you know about them if you are required to do so you should file the 2011 one, as to the previous years that is where expert advice is needed to avoid some mega pitfalls and possibly parting with a lot of money.

penguinbar

I would contact Pete Newton.

www.britishexpatstax.com. He's very versed on both sides of the pond

lansbury

SadInStates

Thanks. Will do.

JAJ

A person who is behind on tax filing (tax returns and/or FBAR) but doesn't actually owe any US tax, or only a small amount, should simply file the outstanding returns, pay any tax the IRS assess, and move on.

The Voluntary Disclosure Program is designed for those who have evaded tax on a significant scale. It is unfortunate that many people got into panic and filed under the VDP when they could simply have filed the returns under the normal process. Such people ended up much worse off than they would otherwise have been (because the penalties under the VDP are not designed for small scale tax underpayment) and even the IRS recognized that they needed to give those persons an opportunity to opt-out of the VDP if it didn't suit them.

Hundreds, if not thousands, of overseas Americans find themselves "catching-up" on outstanding tax returns each year. Normally the amounts of tax due are small, or zero, because of foreign tax exclusions and credits. There is no evidence that the IRS are imposing extreme penalties. They simply want people to start filing the returns they are supposed to file.

CAProgrammer

I'll make a deal with you; give me your Citizenship and I'll pay your $10k fine and give you $10k LOL. Seriously though, there are people who pay $1 million (or $500k) just to get a conditional green card for the US. So all in all not the end of the world. Just saying...

galego

Hi there,

This is my first post as I just stumbled upon this topic with a mounting sense of dread.

I'm in similar circumstances to the original poster: I'm a dual British/American citizen. I was born in the UK and lived pretty much all my life there (except a few months here and there in the US before I started school).

The only times I've worked in the US is summers during high school, in restaurants and the like. I had taxes taken out there (in fact I got a refund once without applying) so I'd naively assumed the US was like the UK; everything tax wise was done for me.... I had no idea I'd been required to file a federal (as well as state) income tax report annually... Noone's ever contacted me about that (despite the fact that I have worked in the US, albeit briefly).

I've always worked in the UK since the age of 18 and paid taxes on my earnings in the UK; I only ever went to the US on holiday to visit family. So this talk of penalties worries me.


And the kicker...

I've applied to a federal job in the US; I have the interview next week. Apparently part of the security clearance (if I get that far) has to do with my tax filings.

I really don't want this to knock me out of my stride for this interview as I really want this job. I'm tempted to try and get it off my mind, get to the interview and cross this bridge when I come to it.

But realistically, what should I do?!

Get in touch with this federal job and beg for mercy?

I'm currently in my "domiciled state"... should I get in touch with my local IRS office?

Get in touch with this 'Offshore Voluntary Disclosure Program'?

The thing is, I'm pretty young and the amount of money I have in the bank is tiny (my debts are much more impressive). If I get in touch and they want to fine my Britishness to the tune of 27%, I really can't pay that. Noone's got in touch with me up til now (after all these years) and I have no idea when they would

Any calming advice would be greatly appreciated!

galego

right, from: http://www.irs.gov/newsroom/article/...250788,00.html

I think I'll ring up an IRS office and hope that I'm sufficiently poor that my annual income has always below the applicable exemption amount :/

The Horticulturalist

There's an British accountant in the US who is well known on this forum, I forget his name but someone will be along in a minute and tell you who it is I'm sure.

It might be worth consulting with him to hash out the details before your interview progresses.

ian-mstm

I don't believe the US government is obligated to tell you about your US tax obligations.


No, don't contact them. If asked at an interview, you tell them them truth... you were unaware of your US tax obligations and that you are now taking steps to remedy the situation.


You need to remedy the situation. The US/UK tax treaty will likely result in you having no tax due, but it might be prudent to file your past returns. I believe you only need to file returns since age 18.

Ian

nun

The people that get a $500k "investor greencard" can easily afford to have their taxes done by a professional. Also some are actually unaware that as a LPR they will be taxed on their worldwide income. I told this to a chinese guy once and he was amazed.

JAJ

If you haven't evaded US tax on a significant scale (and you probably haven't due to foreign earning exclusions and credits for foreign tax) then do NOT enter the Voluntary Disclosure Program.

Instead, simply file the outstanding US federal tax returns. Normally you go back 6 years. The IRS has a field office in London, lots of Americans go through this process each year. If you have underpaid US tax, you will be assessed interest and penalties. It would be worth hiring an US qualified tax accountant to check to see what your tax bill (if any) will be.

If your income was below certain thresholds, you may not even need to file a tax return for that year.

If you have had more than US$10k in non-US bank accounts, then you need to report to the US Treasury on form TDF-90 (also known as FBAR). If you haven't filed, file them now. As long as you've not been underpaying US tax, it should not be a concern.

And finally, if you're male, you need to have registered with Selective Service before age 26. If you haven't registered and are under 26 - register immediately, at http://www.sss.gov

If you are aged 26 or over and missed registering, that may well also cause an issue for federal employment.

Bob

Peter Newton.

Bob

In a similar vein, what about signing up for SS, doesn't one who is eligible needed to have done that for a Federal job too?