For those who are unaware (I certainly was), the U.S. is one of only a handful of countries that requires citizens to file their worldwide income in the U.S. regardless of where they live. If you have lived and worked in another country for the past 20 years and have never set foot in the US since then, you still have to file your tax returns with the IRS. That applies to all citizens. Someone born in another country to 2 US born parents is a US citizen, and that individual by law has to file with the IRS, even though he/she never set foot in the US or worked in the US. Not many people know of that rule. The rule applies to U.S. citizens living in any other country. Among some seven million Americans living abroad, only about 4.6 per cent have been filing returns in the U.S. There was a case here in Canada where a man (born in Canada and worked his entire life for a canadian firm in Canada) was detained and accused at the border for failing to file to the IRS. His crime: both his parents are American so he was, to his surprise, an American citizen. All his accounts at the bank in Canada are considered offshore accounts. There is another case where a college woman, who spent the first 5 days of her life in the US as she was born there while her parents were travelling, was accused of not filing with the IRS. The IRS wants her to pay taxes on her income earned at a summer job, although that job is in Canada and she has lived in Canada her entire life. These individuals and any other US citizen living abroad has to also pay estate tax to Uncle Sam at death. Canada’s finance minister Jim Flaherty: http://www.marketwatch.com/story/canadian-finance-minister-tells-irs-to-back-off-2011-09-20 “Back off our taxpapers, Flaherty tells U.S.,” read the recent headline in Canada’s Financial Post after Flaherty fired off an angry letter to the Washington Post, New York Times, and The Wall Street Journal blasting a new IRS tax crackdown that could ensnare tens of thousands of innocent Americans living in Canada. Stop targeting “innocent and law-abiding people” who owe no U.S. taxes, added the angry Conservative cabinet minister.
You can’t stop the global hegemon of debt, it owns you.
As stupid as it may be, the law is the law. If you couldn’t tell by my username, I’m Canadian so I’m allowed to say this: Flaherty fails to mention that Canada is just like the US in that it requires its citizens to declare and pay taxes on worldwide income. The situation could VERY easily be reversed by a Canadian born in the US. Learn the law and deal with it. In all likelihood, you wouldn’t owe any taxes to the other country, but you still have to file. (I believe you become exempt from that if you become a permanent resident of another country and no longer have any Canadian income.) /not a CPA
Easy solution. Don’t file and don’t return. QED.
Yea it’s kind of BS, but fwiw it may not actually be too bad in practice. I’m not well versed in specifics but I understand you are excluded from this if you earn less than $92K. When working abroad, housing/expenses are often paid for by the employer as well.
You can’t have your cake and eat it too. These people should just renounce their US citizenship: “A person wishing to renounce his or her U.S. citizenship must voluntarily and with intent to relinquish U.S. citizenship: 1. appear in person before a U.S. consular or diplomatic officer, 2. in a foreign country (normally at a U.S. Embassy or Consulate); and 3. sign an oath of renunciation” http://travel.state.gov/law/citizenship/citizenship_776.html
justin88 Wrote: ------------------------------------------------------- > You can’t have your cake and eat it too. > > These people should just renounce their US > citizenship: > > “A person wishing to renounce his or her U.S. > citizenship must voluntarily and with intent to > relinquish U.S. citizenship: > > 1. appear in person before a U.S. consular or > diplomatic officer, > 2. in a foreign country (normally at a U.S. > Embassy or Consulate); and > 3. sign an oath of renunciation” > > http://travel.state.gov/law/citizenship/citizenshi > p_776.html Seriously, ignorance of law is not an excuse. It’s better to deal with this than risk having a trip to the US ruined because you stuck your head in the sand.
How in the H8LL didn’t the guy know his parents were American? Was it a family secret? Someone give this guy the “oblivious award”…I definitely agree, the law is the law. Give up your U.S. citizenship if you don’t want to file… move along nothing here to see.
krazykanuck Wrote: ------------------------------------------------------- > As stupid as it may be, the law is the law. > > If you couldn’t tell by my username, I’m Canadian > so I’m allowed to say this: Flaherty fails to > mention that Canada is just like the US in that it > requires its citizens to declare and pay taxes on > worldwide income. The situation could VERY easily > be reversed by a Canadian born in the US. Learn > the law and deal with it. In all likelihood, you > wouldn’t owe any taxes to the other country, but > you still have to file. (I believe you become > exempt from that if you become a permanent > resident of another country and no longer have any > Canadian income.) /not a CPA Canadian RESIDENTS must declare worldwide income, not citizens. There is a critical distinction there. If I move to HK and cut most of my ties to Canada I don’t have to file taxes with the CRA despite the fact I retain my citizenship. Likewise, if I am a landed immigrant without citizenship I must pay Canadian taxes as long as I am deemed a resident. What the IRS here is doing is chasing after all citizens, which would include dual citizens who were never residents of the United States.
I’m 2 years behind on my taxes for this reason. I work overseas and get paid offshore.