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US Expatriates Should File a Return with the IRS – Even if They Don’t Believe They Owe any Tax

Why should a US expatriate file a federal income tax return with the IRS even if they believe the amount owed is $0.00? An expat may earn less than the $9,350.00 threshold where no US income tax owed. They may reach a $99,00.00 level of income for 2014, yet remain below foreign income exclusion levels combined with personal exemptions still owe no tax. So why should they file? Choosing not to file leaves the statute of limitations open, allowing the taxing authorities to go back at any time in the future and “assess” tax for that year. In essence, the IRS can and will create an estimate of what they believe you might have earned, and pursue you for the resulting taxes, penalties and interest. Choosing not to file creates a needless battle, and a resulting burden for the taxpayer to go back and reconstruct the year and re-calculate what is actually owed (which in most cases is zero, which is why you probably justified not filing in the first place).

Tags: IRS, US expatriate, statute of limitations, threshold