Catch Up on Back Taxes

Catch Up on Back Taxes

Are you a US expat who’s gotten behind on your US tax filings? It’s certainly not easy to juggle getting acclimated to a foreign country, culture, language and customs while working and raising a family.

Or, maybe you’ve been diligent getting your US return filed every year, but you didn’t realize that you needed to include certain forms with your filed returns.

While it’s certainly understandable for these situations to happen, you must take action to get back into compliance with the IRS.

Some expats may get paralyzed into inaction by fear of big penalties or audits, but not doing anything about a delinquent tax situation only makes the situation worse and far more costly. Through the FATCA Act, the IRS has uncovered the veil of secrecy that used to shroud foreign banking. There is now much more transparency and many more international agreements worldwide with foreign banks to share US citizens’ account information with the IRS.

Another issue is that expats are unfamiliar with some of the foreign-related required information returns, including:

  • FINCen Form 114, Report of Foreign Bank and Financial Accounts (aka, FBAR)
  • Form 5471, Information Return of US Persons with Respect to Certain Foreign Corporations
  • Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund
  • Form 8938, Statement of Specified Foreign Financial Assets

The Perils and Pitfalls of Failing to Get Caught Up and Compliant

If you are worried about facing stiff penalties and IRS scrutiny by catching up with back tax filings and getting compliant, there is far worse news. If you don’t, it may cost you very, very dearly—and you could even lose your passport!

Most of the information returns listed above carry a minimum penalty of $10,000 per year each for failure to file. That doesn’t even include the penalties accruing on yearly federal income tax liabilities for failure to file and failure to pay, plus interest, from the original due date for each return.

In addition, since 2016, the IRS has coordinated with the US State Department to revoke or deny renewal of US passports carried by non-compliant taxpayers whose tax debt exceeds a certain amount (currently $53,000).

Want to Take the First Step Towards Getting Caught Up and Compliant?

We are here to help! Our team of experienced CPAs and IRS Enrolled Agents will review your situation and determine the best course of action to get your back tax returns filed. We will work to get you fully compliant with the IRS again, including getting you qualified for an IRS tax amnesty program if possible. Contact us today to get started!