It’s quite common for US expats to fall behind in filing their US tax returns while living abroad – whether thinking they no longer need to file, since they’ve established residency in another country paying taxes there, or simply being busy trying to adjust to a completely different culture, living and work environment abroad.
However, by falling out of compliance with their US tax filing obligations year over year, expats increasingly run the risk of catching the IRS’s eye. The IRS, and the US Department of the Treasury as a whole, have in recent years greatly stepped up enforcement of US income tax compliance for US taxpayers abroad via a US law called the Foreign Account Tax Compliance Act (FATCA), FATCA affects US expats in two ways:
- Foreign Account Reporting: US expats with foreign financial accounts or assets above certain thresholds must report them on Form 8938 when filing their federal tax returns.
- Foreign Institution Reporting: Foreign banks and investment firms must report their US expat account holders to the IRS, allowing the IRS to monitor these accounts.
The bottom line is that FATCA is making it much easier for the IRS to identify US expats who are not keeping up with filing their US taxes. In short, the IRS knows when you haven’t filed—and filing back taxes is the only way to get compliant. For many expats, the IRS offers an amnesty program through the Streamlined Foreign Offshore Compliance Procedures, which may allow you to catch up without heavy penalties.
How Many Years Can (or Should) I Be Filing Back Taxes?
A common question among expats is: “How many years can you file back taxes?” Generally speaking, the answer is six years – the IRS statutory period of enforcement on delinquent tax return does not extend back further than six years.
However, taxpayers should be aware that per IRS Policy Statement 5-133, enforcement for periods longer or shorter than six years may be used by the IRS, depending on:
- The taxpayer’s prior history of noncompliance.
- The existence of income from illegal sources.
- The effect upon voluntary compliance.
- The anticipated revenue in relation to the time and effort, required to determine tax due.
- Any special circumstances existing in the case of a particular taxpayer, class of taxpayer, or industry, or which may be peculiar to the class of tax involved.
If the IRS determines that a taxpayer filed a false or fraudulent return, the statute of limitations on delinquent returns is not limited to six years, it is unlimited. This is true even if the taxpayer later files an amended return to correct the fraud that was initially reported.
Can You Claim Refunds When Filing Back Taxes?
Filing back taxes isn’t always about paying what you owe—you may also be entitled to a refund. However, the IRS has strict rules:
You have three years from the original due date to file an amended return and claim a refund.
If you filed early, the three-year clock starts on the actual filing date.
Extensions don’t change the deadline—the clock still starts from the original due date.
For example: If your 2024 US tax return was due April 15, 2025, you must file by April 15, 2028, to claim a refund.
If you owe back taxes, filing as soon as possible helps reduce penalties and interest.
Filing back taxes with the Streamlined Foreign Offshore Procedures
If you’re worried about having to file six or more years of delinquent returns, there’s good news. The IRS offers US tax amnesty for expats through the Streamlined Foreign Offshore Procedures, which can provide significant penalty relief for non-willful taxpayers. Under the program, you have to:
File the last three years of federal tax returns, including expat forms like Form 2555 (Foreign Earned Income Exclusion) or Form 1116 (Foreign Tax Credit).
Submit six years of FBARs (FinCEN Form 114) if your foreign accounts exceeded $10,000 at any point during the year.
Complete and attach Form 14653 (Certification by US Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures) to certify that your failure to file was non-willful (unintentional).
This streamlined amnesty program is the most common method for filing US back taxes abroad. By filing the right documents required, expats can catch up on past-due filings and return to good standing with the IRS without having to file the full six years of tax returns.
What Happens If You Don’t File Back Taxes as a US Expat?
Ignoring unfiled US tax returns doesn’t make the problem go away. In fact, the IRS has multiple enforcement tools at its disposal, especially under FATCA. If you continue to avoid filing back taxes, you may face:
IRS Penalties and Interest – Unpaid balances accrue monthly penalties and interest until paid.
Loss of Refunds – After three years, you forfeit refunds for prior-year returns.
Passport Revocation – The IRS can request revocation or denial of your US passport if you have seriously delinquent tax debt.
Increased IRS Scrutiny – Once flagged, expats may be subject to audits or further investigations.
Filing US taxes as an expat—even late—shows good faith and often reduces risks compared to ignoring the issue.
8 Common Questions about Filing Back Taxes as a US expat
1. What is the oldest tax return I can file?
In most cases, six years. But with the Streamlined Procedures, you may only need three years of US returns and six years of FBARs.
2. Are there penalties for filing back taxes?
Yes, if you owe taxes. But under the IRS amnesty program, non-willful expats can often avoid penalties.
3. How long does it take to process back taxes?
It varies, but processing through the Streamlined Procedures may take several months.
4. What if I don’t qualify for the Streamlined Procedures?
You may need to consider other options, such as the Offshore Voluntary Disclosure Program (OVDP).
5. Should I file back taxes on my own?
You can, but working with a professional who specializes in US expat tax returns helps ensure accuracy and compliance.
6. Can I still file back taxes if I don’t owe anything?
Yes. Even if no tax is due, filing is required to stay compliant. Many expats owe $0 after claiming the Foreign Earned Income Exclusion or Foreign Tax Credit.
7. How does filing US back taxes abroad affect my host country taxes?
In most cases, the US tax treaty with your country of residence prevents double taxation. A professional can advise how US filings interact with local rules.
8. Can filing back taxes help protect my passport?
Yes. By becoming compliant, you reduce the risk of passport revocation due to seriously delinquent tax debt.
Want to learn more about how to qualify for the IRS’s Streamlined Foreign Offshore Procedures amnesty program? Contact Universal Tax Professionals today, and we will walk you through the steps needed to get back in full compliance with the IRS for your unfiled back taxes. We also provide a wide range of US expat tax services for all Americans living abroad.
