Unfiled Tax Returns
January 12, 2023 | ExpatTaxGuide | 2 minute read
Expat Tax Guide | Everything you need to know about filing taxes abroad in 2022
Verified by IRS Enrolled Agents and CPAs
What happens if you don’t file US Expat taxes?
Penalties can get serious if you are an American living abroad, and have unfiled tax returns – failing to file on time. For US expats, it’s June 15th of every year, with an option to request an extension.
If you do not file and the IRS catches you, you could face penalties:
- Paying a fee of $10,000 or 5% will be tact on interest on your taxes until it reaches 25%
- You won’t be able to renew your US passport if you are on the hook for a high tax bill
To learn more about how the IRS calculates penalties, please click here.
Did you forget to file your US taxes? Or maybe, you didn’t know how to file? If you were innocent, you could use the Streamlined Filing Procedure (see below) to get back on track. If you get caught up before getting caught by the IRS, you can use the Streamlined Procedure. Best of all, it’s penalty-free!
Filing For Previous Years and Back Taxes
Did you miss filing one, two, or more tax returns? You could have a backlog of unfiled tax returns on queue, which you’ll need to do something about. As an American expat or Green Card Holder living abroad, if you forgot or didn’t know you had to file US tax returns and the FBAR annually, there’s a tax amnesty solution for you.
The Streamlined Procedure prevents tax penalties and fees and puts you back on the IRS good list. It’s a specific process to walk through, where you will need to have information from the last three years (yearly salary, investments, etc.).
Qualify for the Streamlined Procedure
One key point that allows you to qualify for the Streamline Procedure: Your actions must be innocent for not filing tax returns in the past. This could mean you didn’t know how to file, were unaware of this tax obligation, or forgot. You’ll need to sign a statement stating this fact on Form 14653 (or via our expat tax software) when you start filing through this program.
Requirements to File Back Taxes:
You are eligible to use the Streamlined Procedure if you fall within the following guidelines:
- You did not live in a home in the US for the last three years
- We’re living outside of the US for at least 330 days in the year
- You have not filed a federal tax return in the last three years
- Haven’t filed amended or delinquent tax returns in the past
- Haven’t filed the FBAR within the last six years
What do you need for the Streamlined Procedure?
- Three years of back tax returns (not including this year’s return)
- Six years of FBAR reports (not including this year’s information). FBARs are only required if you have had over $10,000 in all your foreign financial accounts at any time during the year
- Signed statement on the Certification by a U.S. Person Residing Outside of the U.S.
How Much Does it Cost?
Our expat tax software and Streamlined Procedure service is one of the most affordable packages for Americans abroad. Even if you have a more extensive or complex tax situation, we will not increase our fees. It is a total of 749 Euro including VAT (Value Added Tax), broken down into the following ways:
- Four years of tax returns at 149 Euro each (including this tax year’s return)
- plus six years of FBAR reports (if need be)
- Extended support that will guide you through the whole Streamline Procedure process and make sure all your questions are answered. We think that’s pretty reasonable!
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