Have not filed my US taxes in 10 years & looking into DCF

Hi there,

I have a couple of posts floating about, I have been living in the UK for 5 years & recently obtained UK citizenship through marriage & now my hubs & I want to move to the States. I have lived outside of the US for 10 years & only worked there for about 3 months or so at a time about 3 times between 2005 & 2007.I made very little, I have not filed US taxes in those 10 years that I can remember.
I guess my questions are.....
(what should I do?!?!)
Do I need to back file for all of those years? Is that possible? Has anyone done it?

Another member mentioned a letter stating that I didn't make enough to file would be helpful in the DCF process- Im assuming that is, that I didn't make enough to file in the US - in dollars during the brief times I was there? If this is so, how can one get this letter?

I have made enough Im sure to file since I have lived here (since 2008) in ££ but don't know if I am supposed to file that earning there. On top of all this confusion, I have no income really at all from 2003-2007 apart from the 3 month or so periods I worked when I was home.

I am pretty much kicking myself on all this right now, an unexpected employment opportunity in the US has come up for my UK spouse & we just really want to jump on it & of course I knew that would be difficult to say the least but I totally feel like I have messed this up although surely others have gone through this similar type of realisation. 

Any help would be amazeballs... thank you! I think I need a personal assistant.

Assuming you are also a US citizen, you need to file taxes whether you are working for a US or UK company. If you want to file as "head of household" you need to file if you have made $12,500; if you want to file jointly, $19,500; if you want to file as married, filing separately, you only need to have made $3,800 to be required to file. Obviously you have made more than any of those.

So I've borrowed this from Miss Joules It's World Wide income so you need to do the dollar/pound conversion, because of the implications for the future most expats choose to do MFS to avoid having their spouse also file their tax return, so this basically means if you were making more than about £2500 a year at any time during that 10 year period you should have filed your tax return (this doesn't mean you necessarily *owe* them taxes (you probably don't) but you still have to file if you meet this threshold.

The amount you've made does not need to be in dollars. My husband has lived in the UK for 6 years and never made a penny in dollars in that time, he files a tax return based on his UK income, converting pounds into dollars and then pays what he owes.
There's also some additional forms/liability if you've ever held more than $10K in any account in your name etc.

There is an option to back file your taxes for expats with the streamlined approach (last 6 years) -
http://www.taxesforexpats.com/services/new-irs-program-delinquent-taxes.html

You can see if you qualify here -
http://www.taxesforexpats.com/services/streamlined-program-qualifications.html

The streamlined approach is arguably a high risk route to delivering paperwork to the IRS versus quiet filing.

It also self-incriminates which you have a constituitonal right not to have to do.

Take professional advice from a dually qualified US/UK adviser if you are that delinquent with taxes.

The streamlined approach is arguably a high risk route to delivering paperwork to the IRS versus quiet filing.

It also self-incriminates which you have a constituitonal right not to have to do.

Take professional advice from a dually qualified US/UK adviser if you are that delinquent with taxes.

Yes, i am in agreement that looks a little scary to me, I am grateful for the help & advice from both of you .
Has anyone used Taxes for Expats before or could you recommend anyone specific to go to for help/advice etc?

I do think I qualify for the top part & I do not at all fit into the bottom part (to my knowledge) which is the bigger level of risk stuff.
I just lived off the radar (Eastern Europe) big time from 2003- 2005. In the US I worked at a gas station for about 1.5 months in Dec 2005. I then didn't work in the States until 2007 for 2 months if that, 2008- 5 months at a bagel shop. That is it for me up until now. I don't own any property anywhere & don't have very much money- has anyone used this Streamlined service before?  A big OOPS is appropriate for me right now!


In order to qualify for the new streamlined procedure, the minimal qualifications are:

You must have resided outside of the United States since at least December 31, 2008;
You must have unfiled US expat tax returns since 2008;
You do not have a balance owed to the IRS for any of the previous 3 years in excess of $1,499 per year;
You are not submitting an amended return for the previous 3 years, unless you are filing a late election to defer tax in a qualified Canadian retirement plan; and

You must have a valid Social Security Number or TIN (Taxpayer Identification Number) or be applying for a TIN.
It’s important to understand that – even if you meet the above qualifications – you may still not qualify for the streamlined filing procedure offered by the IRS.  Once the IRS determines your initial eligibility, it will then determine your risk factor.  While it’s impossible to know exactly how you will appear to the IRS, there are a few areas which are known to increase your level of risk.  They are:

If you’re claiming a refund on any of the previous years’ expat tax returns;
If you have a large amount of economic activity in the United States
You are claiming income outside of your host country
You are currently being audited or are otherwise under investigation by the IRS
If you have previous FBAR penalties or you have received and FBAR warning letter
You either own foreign financial accounts or have interest in foreign financial accounts outside of your host country
You either own foreign property or have an interest in foreign property outside of your host country
You have US income
You demonstrate a sophisticated level of tax planning or avoidance

Curious as to what happens about unfiled taxes from before 2008 -- let's say 30-40 years back when there was no internet or officialdom handing out information on this?

I think you would have been banished.
 

Curious as to what happens about unfiled taxes from before 2008 -- let's say 30-40 years back when there was no internet or officialdom handing out information on this?

The criminal statute of limitations is six years, so I think you're fine in terms of not going to prison at least Although the statute of limitations never expires on civil tax fraud.

It's the FBAR you have to be careful of, so hopefully you've never had more than £6.5K in savings as the penalty for failing to file an FBAR is $10,000 for each non-willful violation. If willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation. Each year you didn’t file is a separate violation. FUN TIMES.

You do need proper tax help Lucy17, look for a proper tax advisor with knowledge of  US/UK expat and delinquent issues, the thing is you have several options, some of which may further incriminate you as guya states above, depending on your circumstances, yes you *could* file quietly, which is the correction of past tax returns and FBARs without drawing attention to what you are doing but the IRS does warn against it (of course) -
http://www.forbes.com/sites/robertwood/2011/04/13/quiet-foreign-account-disclosure-not-enough/ but some of the alternatives are pretty harsh.

I put a call into the expats tax people that sponsor the tax thread ( sorry im checking this from work & cant see the usual stuff on this very old computer) & she called me back. At first she tried to get me to go the streamline way but then seemed to think that wasn't appropriate for me. Like, for maybe 1.5 years here I was on a salary of 18£ but mostly have never had any money- living in my overdraft all the time. I told her I make about £220-£250 weekly, same as my hubs- we have no savings, no assets AT ALL & have never had any more than £1400 in our normal account, much less savings & that was only 1 time last month before we moved flats. I am pretty sure my overall average in our joint account last years was £2.
I am totally up to date on all my UK taxes at least!!

The person didn't actually seem THAT concerned- she told me to call the IRS tomorrow & see "what they say" & call her back. She thought I might be able to just back file. For the record they charge $1200 for the 3 years back streamlined thing.
Im going back to work now- will check in a couple hours.  Thank you so much for your input!!!!

Has anyone ever used Taxes for Expats before?

I think I would definitely get a second and third professional opinion before you file anything with the IRS.

I think I would definitely get a second and third professional opinion before you file anything with the IRS.

Agreed, you're really past the limits of what a bunch of unqualified internet forum people can tell you.
You need to go do your research on a number of companies/tax advisors and work with them to make a decision on what to do.

Don't take anymore layman's advice.

Hello there,
Just thought I would give an update on my progress- or rather the advice that I have gotten.

Buzzocatt tax people in London said: Sounds like I qualify for Streamlined service, should be really straight forward. I have no Foreign Bank account reporting to do. Will charge me £2000 to back file 3 years.

Xerxes said: They would review my situation but it sounds like Streamline, £1500-1700 & once its done no news is good news.

I called another lady I found online (can't remember who she was though) that basically told me that I just needed to back file, that the IRS is most certainly not after people with as low of income as myself but that of course I just needed to get caught up with everything. She said most people will use scare monger tactics. She advised me to call "good old H & R BLOCK" and the embassy (she is in London) & not to worry about it. I liked her honesty on this part, she said that I simply could not afford her services nor would it be worth it.

Taxes for expats: I did call them & had some communications with them but the original lady I spoke to didn't exactly know what to do, she said she would put me in touch with IJ the president of the company but that hasn't happen to far. I have yet to hear back from them & will call back today in spite of me leaving messages. They seem nice.

H & R Block, I called the one in my home town & had to be very persistent with them to put me in touch with anyone that knew about international tax stuff as the people in that office did not. I have gotten an email reply that they can help me but no price or procedure.

The US Embassy tax man was super nice & very re-assuring, he said all I had to do was back file 3 years & if I wanted notification that it was processed to send a set of copies in to them with the originals & a self addressed stamped envelope.
He said to look up "Publication 54" which is a tax guide that I had already located. Nice guy.

So my conclusion is to back file asap, I feel totally confident on being able to do my own UK taxes but US seem really daunting to me! Hopefully I can figure it out or get an affordable service asap!!

Thanks everyone for your advice, I will post another update if anything happens or I use a specific advisor.
 

In case I could be of help to anyone else out there- I got my taxes back filed 3 years through H&R block for $300 total. Apart from having some troubles with actual emails getting through to them it was all very speedy. Once they got my info (scanned) my taxes were done & sent to me in 1 week via UPS. My situation was really straightforward thankfully but I do recommend talking to H&R block as they have people that are qualified to do International taxes for a much smaller amount then the specialist in the UK at least- if you are like me & felt unsure of doing it yourself. Best of luck!!

Great to see that you have things sorted, and thanks for posting how you resolved your tax issues. All too often we don't get to learn how a poster's story ends. I'm sure your experiences will be useful to others.