Not filing taxes while living abroad?

myexpattaxes what happens if you dont file your taxes as an american abroad

“I am not filing taxes while living abroad… Am I in trouble?”

”The IRS will easily forget about me….’’ 

‘’So what if I miss a year or two…or three of filing my taxes?’’

Are these questions haunting you at night? Not filing taxes while living abroad may seem a lot more innocent than Al Capone’s tax evasion conviction, however, you can still get in some serious problems.

If you make over the filing threshold, the IRS requires you to file annually, whether or not you live in the U.S. Check your passport:

not filing taxes while living abroad

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That’s why we at MyExpatTaxes want to assure you that we got your back when it comes to getting all your tax nightmares and obligations in order. With our specialized expat tax software solution, we’ll make it easy for you to file so you’ll never consider skipping out on not filing taxes while living abroad. If we can give you, our fellow American expats, peace of mind, then we’ve accomplished our goal!

Not filing taxes while living abroad

If you’re not filing taxes while living abroad, this can send a negative message to the IRS. Why? “Failing-to-File” & “Failure-to-Pay” are seen as criminal behaviors.  The penalties and fines for not filing taxes abroad depend on a lot of factors. It can range from 5% of unpaid taxes and escalate up to $25,000 and jail time (if the IRS determines that you’re involved in offshore money laundering and tax evasion.)

We don’t want to scare you – but encourage you to file your taxes on time! 

Other penalties for not filing taxes while living abroad

  • FBAR – Americans abroad may not know they are supposed to file the FBAR, which we wrote about in our Expat Filing Requirements post. The penalty for willfully not filing the FBAR can be as high as $100,000. But what if you forget or didn’t know you had to file this form? The IRS can still charge up to $10,000 per year (they are typically forgiving though if you file before they contact you).
  • Form 8938– this form is on reporting your interest in certain foreign financial assets, financial accounts, foreign securities, and interests in foreign entities. Failing to file all or any one of these forms may place you in a position of being fined $10,000 or more. Think of it as the FBAR for the IRS.
  • What Else? Generally speaking – filing a false return (omitting foreign income), willfully not filing the FBAR, and/or an income tax return can lead you (up to) 5 years in prison and thousands of dollars of penalties. We hope you never go there!

Not filing taxes & the IRS at your door

In a world where our technology is quickly upgrading and evolving, it will only get harder to hide from the IRS. They have a software called the Information Returns Program (IRP) that checks and re-checks your tax reports and files, so if you’re not filing taxes while living abroad, the software can alert the IRS to start an investigation on you.

Due to the seriousness of your status, the IRS can contact you in a couple ways – for example, by post or phone, and you will be asked to file/report within 30 days of the request. Keep in mind, the IRS will never demand you to give them your credit card information over the phone, penalize you without an opportunity to appeal or threaten to bring in the local police. If someone does this to you, they are likely trying to scam you by pretending to be the IRS!

not filing taxes while living abroad

The Streamlined Procedure

The Streamlined Procedure, created by the IRS is a pardon for expats to catch up on their forms with no penalties and double taxation.  So, even if you’re not filing taxes while living abroad, it’s not too late to correct it! 

However, this pardon will NOT apply to Americans abroad who willfully refuse to file taxes.

Overall – don’t get yourself into any of these penalty ruts. Choose MyExpatTaxes as your expat tax solution.

We can assure you that our affordable expat tax software solution will bring you much relief when it comes to filing taxes from abroad. Not filing taxes while living abroad can be a dangerous thing to get into. Drop us a message with any questions you have, or get started by joining our waitlist today!

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