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IRS goes after non-resident US citizens

IRS goes after non-resident US citizens

Old Sep 23rd 2011, 1:39 am
  #16  
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Default Re: IRS goes after non-resident US citizens

Originally Posted by JAJ View Post
All that said, there isn't any strong evidence that so far, the IRS are "out to get" overseas Americans who are simply behind in their tax filings and don't have any US tax due. The reports from those who have used the IRS field office in London are generally positive.
Even with delinquent FBARs?

FATCA is the one that really worries me as who knows how UK banks will deal with it
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Old Sep 23rd 2011, 2:07 am
  #17  
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Default Re: IRS goes after non-resident US citizens

Originally Posted by nun View Post
Even with delinquent FBARs?
Can't say definitively and I don't speak as a tax professional - but I've never heard of a real life case where it was a problem as long as there was no tax due and forms were filed correctly going forward. Except one case where someone unfortunately declared into the Voluntary Disclosure Program, which wasn't designed for such situations.
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Old Sep 23rd 2011, 5:48 am
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Default Re: IRS goes after non-resident US citizens

If you need an accountant who is very knowledgeable on US and UK taxes I recommend Pete Newton . www.doug-tax.com.
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Old Sep 23rd 2011, 10:40 am
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Default Re: IRS goes after non-resident US citizens

Originally Posted by JAJ View Post
All that said, there isn't any strong evidence that so far, the IRS are "out to get" overseas Americans who are simply behind in their tax filings and don't have any US tax due. The reports from those who have used the IRS field office in London are generally positive.
I agree.

I've been filing as a USC abroad for 30 years, and 29 of those have been entirely problem free. One year the IRS was on an AMT rampage/witch hunt and I, through my own ignorance, got caught out. Despite all the threatening letters of penalties and actions, I simply paid the amount due and filed a 1040X, and have filed AMT ever since. I never heard another word from the IRS.

Because the US tax code is so complicated, and because it can be very unclear and interpreted in many ways, you can send a query to the London office for UK specific situations (US/UK Treaty). I've received phone calls back from the London office and they have always been most amiable and helpful; much more so than the IRS hot lines to the States.

From this site, and others, it is clear that some UKC's abroad harbour the thought of returning to the United Kingdom at some point. If they are now dual citizens, or maintain their Green card, then their tax obligation to the US will remain, and may do for the rest of their lives. If you're able to simply file Form 1040, 2555, and Schedule B alone, then there really are no problems. But if more is required, it can become complicated. The situation will not change in the near future, so you just get on with it.

Past replies in this thread have tried to steer the conversation back to FATCA and the resulting implications which could impact not only on USCs abroad, but UKCs in the US, among many others. There are no clear agreements between the Treasury and the FFI's (Foreign Financial Institutions), despite two Notices issued by the Treasury this year alone. It is far from being resolved. But large FFI's are spending millions in preparation (and final costs are estimated in billions for all to become fully compliant). Someone will pay, and there's no surprises as to who that may be.

The FFI's are being requested to identify and report all accounts held by US Persons with over $50,000 aggregate. Because there are penalties for 'missing' an account, most FFI's are looking to identify all US Person accounts. Hence the feeding frenzy on filing 1040's and FBARs. A small Building Society in the UK, with little US interaction, may find it advantageous to refuse to maintain an account with anyone with US ties. The fear is that the refusals may not be restricted to the small FFI's. US Persons are already being denied bank accounts by some banks in Switzerland, and some brokerage houses in the UK are already clearing their books of any US Persons. And yes, HMRC are getting tough on hidden bank accounts of those required to file in the UK. But the diligence of HMRC appears not to be enough for the US Treasury, and more importantly, the US Congress.
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Old Sep 25th 2011, 7:54 am
  #20  
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Default Re: IRS goes after non-resident US citizens

My personal view is that if you're a US citizen abroad then you should write to the President and suggest under his current "cutting pointless regulations" gambit that changing the way US citizens are taxed to a domicile-based regime like the rest of the world uses would be a good idea. I know they're scared of fatcats moving to the Cayman Islands but frankly they can already move to a tax shelter and simply not declare their income, the IRS has no way of knowing.

I have to file a fair bit of paperwork with the IRS and I'm not even a US citizen!
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Old Sep 27th 2011, 6:56 pm
  #21  
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Unhappy Re: IRS goes after non-resident US citizens

Maybe some of you can help me with this:
I'm a US person who bought Central Fund of Canada ( Amex CEF A ) shares in 2009 in a taxable US brokerasge account.CEF is a PFIC closed end mutual fund which hold physical gold and silver, and doesn't pay ordinary earnings or net capital gains,dividends are nil ( $0.01).I did not sell any stocks in 2009 or 2010.These shares went up in both years.

No actual income to report.
I omitted these shares in F1040 and schedules B & D and TD F90-22.1 timely filed.
The questions are :
1) should I file F8621 ? for both years?
2)If I didin't get any distribution or gain, can I enter Part III lines 5-6-7 and ignore Part IV ?

"A tax liability under the excess distribution rules arise only when an actual distribution is made by the PFIC, or when the US investor disposes of his investment in the PFIC"

Any help would be greatly appreciated.
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