How Can Americans Living Abroad File Back Taxes?

If you’re an American citizen living abroad, you still need to file back taxes. If you haven’t filed your U.S. tax returns, you may be wondering how you can catch up. Before you panic, take comfort in the fact that you aren’t alone. Many Americans living abroad didn’t know they still had to file back taxes. Expats realize they have to settle back taxes when they run into a problem with the IRS.

Additionally, expats may realize they have tax issues when they try and open a bank account overseas. For that reason, the IRS introduced a program known as the Streamlined Filing Compliance Procedures program. This IRS program helps taxpayers file back taxes abroad without incurring any late fees or penalties. Read on to learn how the program works, and how you can file back taxes while living overseas.

File Back Taxes Overseas Without Penalties

If you’re an expat and you need tax debt assistance, the IRS created the Streamlined Filing Compliance Procedures program. In this program, you get something from the IRS while also giving something back to the IRS.

What Do Expats Give The IRS When Trying To File Back Taxes Abroad?

When you’re an expat living abroad, and you need to file back taxes, the Streamlined program requires you to provide:

–    Three years of past-due income tax returns

–    Six years of past-due Foreign Bank Account Reports

–    Settle back taxes owed

What Do Expats Get From The IRS When Trying To File Back Taxes Abroad?

As part of the Streamlined program, the IRS provides taxpayers living abroad with:

–    No penalties for filing late

–    Zero penalties for paying late

–    No Foreign Bank Account Reports penalties

Who Can Qualify For The Streamlined Program To File Back Taxes?

Those who qualify for the Streamlined program are either:

–    Americans living inside the U.S.

–    Alternatively, Americans living outside the U.S.

We’ll be discussing how the Streamlined program works for Americans living outside of the United States. U.S. taxpayers living outside of the United States are eligible for the Streamlined program if they meet the following criteria.

Criteria For Americans Living Abroad To Apply for the Streamlined Program

–    The taxpayer and their spouse must have lived outside of the U.S. for at least 330 full days. Those 330 days must have been in any one, or more, of the three, most recently missed tax years.

–    You didn’t file back taxes as required during the time you were living abroad

–    Your failure to file back taxes was an accident, meaning you were unaware of the requirement

–    The IRS hasn’t begun an audit or investigation as a result of your failure to file back taxes

What Is The Process For File Back Taxes Abroad?

You are expected to file the past three years of missed tax returns. Additionally, you must submit the past six years of foreign bank account reports. The IRS also wants taxpayers to provide a written statement explaining why they have yet to file back taxes. Platinum Tax Defenders can work with you to prepare your U.S. tax returns and FBARs when living abroad. You will be required to draft a letter stating why you have yet to file back taxes. Platinum Tax Defenders can help you finalize that letter. Once all documents are complete, Platinum Tax Defenders will help you file back taxes on your behalf.

What if I Haven’t Filed Back Taxes In More Than Three Years?

Has it been more than three years since you filed back taxes? If so, you should first focus on settling back taxes for the past three years. After that, Platinum Tax Defenders can take a look at your tax returns from the previous years. We can start by preparing those taxes from the past years to see how much you’ll have to settle. Then, the tax relief experts can advise you on the best way to handle your tax situation.

What Is The Deadline To File Taxes For Expats Living Abroad?

Expats living abroad have until June 15 of every tax year to file taxes. If you are unable to file your taxes by June 15, you may extend your filing deadline to October 15.

What Is The Non-Willful Statement For Expats Filing Taxes Abroad?

A non-willful statement is your opportunity to tell the IRS why your tax returns are late. You must write the non-willful statement yourself. When writing the account, you should stick to the facts and explain what happened clearly and concisely. Additionally, you must state specific reasons for why your tax returns are late. You must also note where the money in your foreign bank account originated. 

Do Expats Living Abroad Need to Pay Penalties For Not Filing Taxes?

If you’re an American living abroad, the IRS Streamlined program waives any late penalties. When the IRS waives your penalties, you will not be subject to the following:

–    Late filing penalty

–    Penalty for paying late

–    Accuracy-related penalty

–    Penalties for late filing information returns. (Specialty forms to disclose certain types of international transactions such as gifts or inheritances from foreign persons.)

–    FBAR penalties 

Can I File Back Taxes Through The Streamlined Program if I Live In The United States?

You can file late tax returns through the IRS’ Streamlined program if you live in the United States. However, the IRS will impose a five percent penalty instead of other penalties that might apply.

Need To File Late Tax Returns Abroad? Contact Platinum Tax Defenders

If you’re an expat living abroad, you still must file tax returns. If it’s been years since you last filed a tax return, call the experts at Platinum Tax Defenders. We can help you file any late tax returns, and also settle back taxes you may owe. Our team of CPAs, enrolled agents, and tax attorneys are ready to help you. Call us today for a free consultation.