How to File Your Back Taxes From Abroad to Avoid Problems with the IRS

If you have not filed your tax return for many years, contact us about our "Stay Ahead of the IRS" service. We can help you get current before the IRS sends you a notice or does something worse. After the IRS sends you a notice, it may be too late to claim the Foreign Earned Income Exclusion. You might have to pay tax on all of your income during those years even if previously you could have excluded it. If you file tax returns, the statute of limitations will also start to run out. If you file no tax return, the statute never runs out and the IRS can assess taxes many years later.

Our Flat Fee Structure is extremely fair ($349 for Federal Tax return or $449 if Gross Income is over $100,000), and almost always less than most clients come to expect from accountants that offer US Tax Preparation in their host country. Furthermore, we offer a 20% discount to clients who file multiple year returns at the same time.

Given the attention that the US government is starting to bring to this issue (see our blog posts on it: http://blog.taxesforexpats.com/category/fbar/ ) now is the perfect time to file all those past due returns and pave the way to return to the US or receive a possible inheritance without worry.

We have helped a large number of expatriates do this (we average about 10 clients a month who file many years of back taxes), without any of them incurring any problems.

How We Prepare Expatriate Tax Returns

Our clients live all around the world. If you would like us to prepare your U.S. Federal and State (if applicable) tax returns, the first step would be to Sign Up as a new client. This will give you access to the Client Zone where you will be able to download our Tax Questionnaire. Once you return it to us along with relevant tax documents we will review your tax situation and possibly arrange for a phone call to discuss your case or, if you prefer, we can discuss your needs over email. Once we have a complete picture of your tax situation we prepare your return - this normally takes about 10 days. If your situation is urgent please let us know and we?ll discuss how how we can accommodate you and fast-track your case.

Once your return is ready we will e-file it for you or, if that option is not available, we will provide you with the PDF file that you would print, sign and mail to the IRS. We promptly respond to all questions or problems by email, phone or fax. We have been doing this for over 20 years and understand how to serve U.S. expats.

Why You Should File Back Taxes from Abroad, Even if You Are Late

We?ve written an article explaining why American expats should file a tax return every year. But we also appreciate that not everybody had the chance to do this. Here are the top 4 reasons to catch up with your back taxes:
  1. While you are worrying about how to file your back taxes, looking over your shoulder and wondering if it's really worth the effort, the penalties and interest that you owe are mounting. After about 5 years the initial tax bill will almost double. The IRS has a very effective (but not efficient, i.e. "slow") method of locating late filers. And if they don't find you for several years, that only means that the accrued interest will be that much higher when they do.
  2. If you don?t file on your own, the IRS has the right to file a "Substitute for Return" on your behalf. You do not want this to happen. If the IRS files on your behalf, they are not obligated to (and will not) apply any federal exemptions - that means no expatriate exclusions or deductions. You may actually go from zero tax due to tens of thousands of dollars!
  3. Once the IRS files a substitute return, they will immediately attempt to collect what is owed. They may do so by levying your wages and accounts or attaching a lien to your property. While in debt to the IRS, you will not qualify for car loans or mortgages. The IRS may even snatch your Social Security benefits to collect on the owed amount! Even if the IRS has already filed a substitute return, it is still in your best interest to file your back taxes. The IRS smiles on any effort on your part, and they will most likely adjust your balance.
  4. The IRS will eventually find you. They have a complex computerized system that works slowly, but surely. If you think that living abroad can save you, be careful. The IRS is working closely with foreign governments to get information about US Expatriates:
    1. Canada
    2. Israel
    3. Switzerland