15 YEARS SINCE I FILED MY LAST TAX RETURN IN THE US

I know ignorance is no excuse but have been living in the Uk for over 15 years and figured since taxes are higher here than in the US there would be no taxes due on my worldwide income. I looked on the IRS website and it only has a few of the older years tax forms available. Has anyone ever tried to file many past years to catch up. Am sure I owe nothing there but on the off chance I move back someday dont want to be in any trouble.

Thanks for any advice....

I'm not an expert by any means but I'm pretty sure that you're only 'on the hook' for the past 6 years, as once that much time has passed they can't do anything about it anyway. You are probably only finding forms for the 6 years worth of taxes you have to file.

That sounds comforting - now hopefully can get ahold of forms for the past 6 years

The US Consulate in London has a tax department and will help you with filing the required tax returns. Google will find their phone number.

Am sure I owe nothing there.......

Since you mention worldwide income, have you done all the relevent research on what is taxable by the US other than earned income? Are you sure you have no other reporting requirements (FBAR, etc.)? Are you aware of new IRS programmes being introduced in September 2012 for people in a similar situation? If your income was of a level that required filing a US return for those past years, have you considered talking to a qualified US/UK tax professional?

Since you mention worldwide income, have you done all the relevent research on what is taxable by the US other than earned income? Earned income is about all that I have. I put all saving into my interest only mortgage (not a current account sort - but the kind you can overpay)Are you sure you have no other reporting requirements (FBAR, etc.)? Still reading up on FBAR but thanks for the tip.
Are you aware of new IRS programmes being introduced in September 2012 for people in a similar situation?
Not aware - can you send me a link so I can read up on that? What is the program called?

If your income was of a level that required filing a US return for those past years, have you considered talking to a qualified US/UK tax professional?

Embarrased to say but I have an accounting qualification in the UK - so pretty sure I can manage the forms. My earnings are fairly straight forward - and as UK takes are higher than US taxes I dont think I have to worry about maximizing deductions.

You are in the right place in this forum with the right friends.

There are several choices:
1.   Do nothing at all
2.   File the past returns and FBARs “quietly”
3.   File going forward and hope that the IRS, US Treasury and Department of Justice do not find out
4.   File under traditional “voluntary disclosure”
5.   File under the “OVDP” – the Offshore Voluntary Disclosure Programme
6.   File under the new “Overseas American Program”, to be launched on 1St September.

Each of these options carries different levels of risk or penalties, many off the penalties available that you might want to be thinking about are for “information returns”, not income tax returns.

There are several firms available that specialise in such advice. My firm is indeed one such firm, even if you decide to prepare the returns yourself it may be worth consulting an expert simply to make sure you have all bases covered.

I see guya has already responded, and his advice far surpasses any I could offer.
 

Not aware - can you send me a link so I can read up on that? What is the program called?[color]

http://www.irs.gov/businesses/small/international/article/0,,id=256772,00.html

All such programmes should come with a warning: Google "Nina Olsen Taxpayers Advocate bait and switch". As guya confirms, if you were to go this route, have a professional US/UK adviser at least check your submission before you file.

yikes - looked at the FBAR form and under penalty it says:
A person who is required to file an FBAR and fails to properly file may
be subject to a civil penalty not to exceed $10,000 per violation. If there
is reasonable cause for the failure and the balance in the account is
properly reported, no penalty will be imposed. A person who willfully
fails to report an account or account identifying information may be
subject to a civil monetary penalty equal to the greater of $100,000 or
50 percent of the balance in the account at the time of the violation.

As I am self employed there is usually some time in each tax year when I have over $10,000 in the bank - and then I trun it all over to HMRC. Can they really fine me $10,000 for each year I didnt file an FBAR? The interest I earn on my bank accounts probably never comes to more than £100/year as the average balance is not that high. Maybe the amnesty in september would be a good way to go, but having read a little about that it also seems that you could get hit with the $10,000 penalty if you cant prove it wasn't willful.

Just a casual observation aimed at no one in particular, but someone who has a SIPP, for example, will also have 'information returns' to file (including on an FBAR) which could also carry additional penalties if they haven't been reported.      SIPP providers may request confirmation of citizenship in order to meet their compliance obligations (starting in 2013?) under FATCA for filing the relevent information to the IRS, if they have a US citizen as a client.

Just a casual observation aimed at no one in particular, but someone who has a SIPP, for example, will also have 'information returns' to file (including on an FBAR) which could also carry additional penalties if they haven't been reported.      SIPP providers may request confirmation of citizenship in order to meet their compliance obligations (starting in 2013?) under FATCA for filing the relevent information to the IRS, if they have a US citizen as a client.

I'm with Guya and OAP on this one; I'd seek some professional advice. You might not actually have any US tax to pay because of the tax you've already paid in the UK, but you might be liable to fees and fines because you have failed to file informational forms with the IRS such as FBAR and now FATCA. A seemingly simple UK tax situation can throw up complications when it comes to US taxation. Examples would be if you own a stocks and shares ISA or a UK personal pension which could require the filing of US trust forms (3250) and possibly PFIC forms.

Hello,

My professional opinion is that the new IRS Program (http://www.taxesforexpats.com/services/new-irs-program-delinquent-taxes.html) is probably the best venue to follow.

If you would like someone to check the work that you do yourself, we have a service you might find useful: http://www.taxesforexpats.com/services/check-return.html.

Lastly - if you just want to see if you are up to the task of preparing your own US Expat Tax Return - give our online quiz a try: http://www.taxesforexpats.com/expat-tax-advice/tax-quiz.html

Hello,

My professional opinion is that the new IRS Program (http://www.taxesforexpats.com/services/new-irs-program-delinquent-taxes.html) is probably the best venue to follow.

If you would like someone to check the work that you do yourself, we have a service you might find useful: http://www.taxesforexpats.com/services/check-return.html.

Lastly - if you just want to see if you are up to the task of preparing your own US Expat Tax Return - give our online quiz a try: http://www.taxesforexpats.com/expat-tax-advice/tax-quiz.html

These notes are excellent. Most individuals would be recommended to use a dual US/UK qualifiied adviser to ensure that tax issues, opportunities and risks on both sides of the pond are addressed.

There are several choices:
1.   Do nothing at all
2.   File the past returns and FBARs “quietly”
3.   File going forward and hope that the IRS, US Treasury and Department of Justice do not find out
4.   File under traditional “voluntary disclosure”
5.   File under the “OVDP” – the Offshore Voluntary Disclosure Programme
6.   File under the new “Overseas American Program”, to be launched on 1St September.

what if he chooses to exercise option 1?
What's likely to happen?

If an individual does nothing at all there is a significant likelihood of larger penalties for wilfully failing to file FBARs, tax returns and the like when the IRS are told or found out.

A typical US person overseas may come to the attention of the IRS on:
1. Renewal of a US passport
2. Entry to the United States
3. Registration of birth of children at a US embassy or consulate overseas
4. Death
5. Death of a US parent when monies are inherited from a US person
6. Incapacity perhaps in old age through the actions of someone appointed under a power of attorney
7. Applications for children to attend US universities
8. Via existing treaties already exchanging data from government to government
9. From all UK banks and financial institutions over the years ahead because of FATCA (through the inter-governmental agreement which will be signed in the coming months and enforced via next year's UK Finance Act)
10. On payment of US social security pensions overseas
11. On payment of any monies through the US domestic banking system
12. On divorce
13. On information provided by the UKs Serious Organised Crimes Office if a UK professional adviser is suspicious that US tax may be unpaid
14. On data stolen from banks and financial institutions and acquired by governments (this has happened frequently in recent years)
15. On information provided for payment of reward by the IRS
16. From data held by the US Treasury's Financial Crimes Enforcement Network
17. From data already held by the IRS, for example provided to them through the Offshore Voluntary Disclosure Program
18. On information gathered from eBay, Google, Apple, Visa or MasterCard or another US institution that has servers located in the United States holding data on US persons overseas
19. From any other information in the public domain, such as LinkedIn entries listing jobs outside the United States where tax returns are not filed

I do not pretend that the resources of the IRS are unlimited. Today they focus on the biggest cases with the most money at stake. Seeing however the developments of technology over recent decades I would sleep easier by becoming compliant before the IRS become too, too efficient in their tax gathering efforts.