US taxes

Hello,

I have a few questions about US taxes.

Background:
I have lived in the UK for about 2 decades.  I was always told I didn't need to file because I never made enough.  I was a student at the time and only had occasional part time work. 
I have not earned any income since 2009. 
When I was last at the US embassy in 2012, they told me that I did not need to file because I was not earning anything.
My partner is a UK citizen, he is a contractor who has a ltd for over a decade, and controls all the finances.  Everything is in his name.

Now the kids are older, I am looking to go back to work.  My eldest is looking for part time work.  And I have family wanting to give money to which I have told them 'No' because I just didn't know how to accept it or invest it.

The following are a general summary of the things I've been told recently from professionals:  A few tax professionals have said that I do not need to file because I do not have any income, savings or assets of any kind in my name.  One has said that I can start filing if I get a job but I have to go through a professional because it is complicated.  Other tax profesionals have said that I will have to worry about loads of penalties and I should never have stopped filing.  I had one tell me that I am in a lot of trouble because I own part of my partner's company eventhough I have nothing to do with my partner's ltd.

My parent's tax professionals in the US have said I just need to start filing and I can utilise them. 

I have gone through the following website:  https://uk.usembassy.gov/u-s-citizen-services/internal-revenue-service-u-s-taxes/ [nofollow]
 I can't say that I am any wiser. 

My questions:
Can I start filing if I get a job without penalty?  (I was told I had to if I made more than 5.00 USD).
Can my child start filing without a problem? 
Is there a way to file that is free without causing problems?

I have a few other questions but those are the basics right now.

Thanks

Glad to see you are asking questions and gathering information instead of immediately rushing into the jaws of a compliance shark as many do and live to regret. For support with thinking through the issues from people who have been there, I recommend the group https://www.facebook.com/groups/AmericanExpatriates.

Thanks.  Im not on facebook.  (Sigh).  I'll see if I can find away around this though. 

No problem. Alternatively there is a lively group on Twitter which you can find if you search the word/hashtag FATCA. You can also visit the website Isaac Brock Society (http://isaacbrocksociety.ca).

When receiving advice, be aware of how your situation is very different to someone who has lived most of their adult life in the USA and only recently moved overseas, or is only overseas temporarily. Certain boards are filled with short term and/or temporary US expats who, while well-meaning, give advice that is not suitable or relevant to an accidental American or permanent, longtime emigrant.

Personally I do not see anything in your post that would make me think you should enter the US tax system. If you live in the UK and work in the UK and do not owe any US tax, the IRS will have zero interest in you. The people who are trying to scare you with stories about penalties are not professionals. They are compliance sharks.

Thank you.

I'll have a look as soon as I can.
This has caused a lot of upheavel withme and my partner.  It's been reignighted with the current cost of living and my partner wanting me to find a 'good' job and my US side of the family wants to gift us money and would like to see us invest it--which is why I said 'no' to the money.   I figure first port of call is try to find a job which is going quite unsuccessfully but I would rather have as much knowledge as I can before making an impulsive decision.

Are you still in the 'North"?

Thanks.

I am not a tax expert but my initial thoughts are as follows.

Once you start working I think you should start filing US taxes. If you have had little or no income in the past then you probably don't need to file back taxes.

To see who should file, have a look here
https://www.irs.gov/filing/individuals/who-should-file
and here
https://www.irs.gov/publications/p501#en_US_2021_publink1000220687

The issue is filing status and if you are not married to your partner you can file as Single otherwise it would be Married Filing Separately (MFS)

If you can file as Single then no need to file if income is under $12,550, but filing as MFS it is just $5.

Receiving gifts is non-taxable to you or your child either by the IRS or HMRC.  It is the giver who may have to pay or report gift taxes, but there are quite generous allowances which don't even have to be reported. (~$15k per person, so a couple could gift over $30k to a grandchild with no paperwork at all and no consequences)

I have no idea what implications there are for you being listed as a part owner of your partner's company without receiving any income from it.

My partner is a UK citizen, he is a contractor who has a ltd for over a decade, and controls all the finances.  Everything is in his name.
* * *
* because I do not have any * * * assets of any kind in my name.  * * * because I own part of my partner's company * * * .

Not having any assets of any kind in your name and owning part of your partner's company seem to be inconsistent statements.  If you don't own any part of your partner's Ltd., then I think you are fine.  On the other hand, if you do own a portion of the company, the next question is whether your partner is your spouse under US tax rules.

Yep, I am still in Lancashire. Where are you based?

It can be extremely challenging to find ways to invest as a 'US Person' in the UK, regardless of what US tax compliance activity you choose to engage in. The problems that this causes for families are really horrible.

FWIW, I thoroughly detest Facebook in general and never use it in normal life, but I created a 'dummy' account just to participate in the groups for overseas Americans, as they are closed groups. There are others in the groups that have done the same. So maybe that is something to consider.

There is a lot of research out there to arm yourself with, so much more than when I first found out about all this six years ago. For example here is something from earlier this year that might ease your mind: https://www.treasury.gov/tigta/auditreports/2022reports/202230019fr.pdf

Not having any assets of any kind in your name and owning part of your partner's company seem to be inconsistent statements.  If you don't own any part of your partner's Ltd., then I think you are fine.  On the other hand, if you do own a portion of the company, the next question is whether your partner is your spouse under US tax rules.

My  name is not on his business, nor do I receive any money from his company in any form.  It was one of the tax professionals who said that there were new US tax rules and that I and my children would be considered as owning 50% of the business simply because we were married or related to him.  The fact that we were not being paid etc wouldn't matter.  (I've been told so many different things, it is ridiculous).

Thank you Durhamlad for the extra links.

Discly-- I hope I clarified the business thing.  But forgot that he is not a US citizen.  I think it was something to do with owning a foreign entity company or something. 

Lionheart-  Im in Lancashire too.  I started off here in the UK and have returned here. 

Thanks again everyone for the input.  I'll probably have more questions soon enough but I got some things to read.  Were trying to get around the Photo thing on facebook.  Very infuriating. 

Just to chip in here on a couple of points:

1 If you haven't filed and are not in the IRS system any longer, then presumably you didn't receive any of the stimulus payments that are legitimately due to you - there's a bunch of tax free cash due to you if you bring your tax affairs up to date - (1st stimulus payment was $1,200, 2nd was $600 and 3rd was $1,400). Bringing affairs up to date with no penalties (assuming no tax due)  is through  what is called Streamlined Offshore Filing .
2. You mention your kids - are they US citizens? - if so, then they are due stimulus payments also - same amounts.
3. if you have no (or little) income, then tax returns are very simple - don't be blinded by aggressive tax professionals who will try and frighten you coz they get more fee income.
4. What assets do you own? (legitimately in your name) - you mention your partners ltd company, but are you a shareholder on Companies House. This will determine whether or not you're required to file FACTA  - again easy, but you might need to go back 6 years.

Good luck - there are many on this forum who cna advise, help and guide you through the process - or just search some of the key terms (i.e Streamlined)

Just to chip in here on a couple of points:

1 If you haven't filed and are not in the IRS system any longer, then presumably you didn't receive any of the stimulus payments that are legitimately due to you - there's a bunch of tax free cash due to you if you bring your tax affairs up to date - (1st stimulus payment was $1,200, 2nd was $600 and 3rd was $1,400). Bringing affairs up to date with no penalties (assuming no tax due)  is through  what is called Streamlined Offshore Filing .
2. You mention your kids - are they US citizens? - if so, then they are due stimulus payments also - same amounts.
3. if you have no (or little) income, then tax returns are very simple - don't be blinded by aggressive tax professionals who will try and frighten you coz they get more fee income.
4. What assets do you own? (legitimately in your name) - you mention your partners ltd company, but are you a shareholder on Companies House. This will determine whether or not you're required to file FACTA  - again easy, but you might need to go back 6 years.

Good luck - there are many on this forum who cna advise, help and guide you through the process - or just search some of the key terms (i.e Streamlined)

1.  I haven't filed cause I have not earned any income since 2009 and I was under 5,000 USD at that point.  Thanks for the info on the potential money.
2.  Yes but under 18.
3.  Where would I go to do taxes and would it be free?  I've been looking for a job unsuccesfully that would use my skills.  Im at a point where Im thinking of going to a local supermarket just to try and bring in some extra cash.  But would probably be seasonal work.   
4.  I own nothing.  Nothing is in my name.  We do not have any investments or pensions etc.  I was a student when I met my partner and he just kept everything in his name.  His company is only in his name.  I have never been on the books or companies house for any reason.   
5.  Seperate issue:  My USA parent would like to gift us money, hoping we would invest it, but I have told them 'No'.  I didn't want to accept any money until I understood what I would need to do to file taxes and how to invest it safely without upsetting either revenue system.

Thanks again for the info and willingness to help.  Its probably going to be a slow process with lots of repeating as the info and options sink in. 

5.  Seperate issue:  My USA parent would like to gift us money, hoping we would invest it, but I have told them 'No'.  I didn't want to accept any money until I understood what I would need to do to file taxes and how to invest it safely without upsetting either revenue system.

Thanks again for the info and willingness to help.  Its probably going to be a slow process with lots of repeating as the info and options sink in.

Receiving gifts has zero tax implications for you with either the IRS or HMRC.  Gift taxes or reporting of gifts is the sole responsibility of the giver.

Receiving gifts has zero tax implications for you with either the IRS or HMRC.  Gift taxes or reporting of gifts is the sole responsibility of the giver.

I remember you mentioned that before.  But if they give me a stupid amount--say over 15 USD and I have it sitting in a joint UK basic checking type account.  Will I not have to file US taxes?  Thanks for bearing with my silly questions. 

The next one would be-- how could I then invest it.   

I meant 15 grand.  been a long day