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Topic: Are me and mum/mom in trouble?  (Read 2686 times)

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Are me and mum/mom in trouble?
« on: January 18, 2023, 02:31:55 PM »
My mum has US citizenship but has lived in the uk for 55 years (indefinite right to remain), I have not lived in the US but as she has US citizenship have dual citizenship.

It's come to our attention that we should have been filing tax returns despite neither of us having ever earned over 40k GBP. We contacted a lawyer hoping they might be able to sort it out and we were quote 1000 GBP per person to do it. They said you need a lawyer to argue to the IRS that you haven't been avoiding paying taxes maliciously. Can anyone help us understand this process, specifically

1) Is it complicated to start filling in tax return yourself if you have never done so, if so where should we find the forms to do so
2) are we likely to get fined for not doing so in the past? I'm not planning to live in US so tempting to continue not filing them to be honest.
3) Is it worth getting a lawyer involved? Or can someone take off the admin load of us for a lot cheaper than 1000 gbp?

I know some of the answers to the above can be found on this forum but I'm feeling really overwhelmed with information and would appreciate someone pointing me in the right direction.
Thanks!



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Re: Are me and mum/mom in trouble?
« Reply #1 on: January 18, 2023, 02:53:56 PM »
First off, someone has been scaremongering.

It is so unbelievably highly unlikely the IRS will penalise you in anyway.  They have created the Streamline Filing Process for exactly this circumstance.  You only need to file the last three years to be considered compliant.

Lucky for you both is that 2020 and 2021 both had stimulus payments which you will receive when you are sorted (the uptake for the streamline process has been huge and it’ll probably take a year before you get your refunds).

If you want to use a professional, I’ve heard good things about Monument Tax.  They will give you a fair price for their expertise.  The stimulus money is likely to offset any expense.

Alternatively, I’d recommend using a web based software program such as Tax Act or Turbotax and answering their questions to populate the correct forms, along with the help of this forum.

There is no need to rush, take your time and decide the right path for each of you.


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Re: Are me and mum/mom in trouble?
« Reply #2 on: January 18, 2023, 03:13:00 PM »
+1 on what KFD says above.  I would have a pro as she suggested to take you through the streamlined program to file 3 years back taxes, for which you should get enough in stimulus payments to more than pay for the expense of filing.

Future filing can be done yourselves either manually or with tax software, it is not too difficult.
Dual USC/UKC living in the UK since May 2016


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Re: Are me and mum/mom in trouble?
« Reply #3 on: January 18, 2023, 06:40:49 PM »
What could be the worst consequence if the  mom  just ignores the whole thing?   If she's not expecting social security, doesn't any money in the US, and especially if she's not  expecting to visit the US before she dies, I'd figure out exactly what realistic consequences there could be and balance that against the trouble and expense of filing for the rest of your life.  I'm not giving you advice to ignore it, just giving you advice to find out from someone more knowledgeable than I if it might make sense to ignore it.


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Re: Are me and mum/mom in trouble?
« Reply #4 on: January 18, 2023, 06:50:08 PM »
What could be the worst consequence if the  mom  just ignores the whole thing?   If she's not expecting social security, doesn't any money in the US, and especially if she's not  expecting to visit the US before she dies, I'd figure out exactly what realistic consequences there could be and balance that against the trouble and expense of filing for the rest of your life.  I'm not giving you advice to ignore it, just giving you advice to find out from someone more knowledgeable than I if it might make sense to ignore it.

Not getting $3,200 each is a big consequence.  ;D


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Re: Are me and mum/mom in trouble?
« Reply #5 on: January 19, 2023, 07:03:09 AM »
Not getting $3,200 each is a big consequence.  ;D

So is having to file to the IRS every year for the rest of their lives - could cost $3,200 just in tax software over many years, and if accountants become required, that would likely be way more.

Getting the $3,200 to fund tax compliance and renouncing US citizenship is an idea, then they never have to deal with this again. But if they've been non-compliant for years and decide to become compliant just for the $3,200, I think that's a false economy, given the very low chance the IRS ever cares about them.

Obviously there's an argument they should become compliant because it's the right thing to do, I leave that to individual moral judgments!


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Re: Are me and mum/mom in trouble?
« Reply #6 on: January 19, 2023, 08:17:55 AM »
I should say the both myself and my mum have considered not filing taxes (if IRS read this that was a joke) and seeing if we could get away with it, but the thing that spurred us into action was my mum was filing out a form in the UK for a bank and she was required to declare that she was a US citizen and it was communicated to her that IRS might well get in touch with her, so she thinks it best to contact them before they contact her...

As for me I have no intention of living in the US in the short term but long term maybe so I am on the fence, depends how onerous it is to fill it out every year, anyone have any advice on that? Are we talking a days work every year to get it done?


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Re: Are me and mum/mom in trouble?
« Reply #7 on: January 19, 2023, 08:18:30 AM »
Also thank you for all of the above replies, that's really useful, and very happy we might get some cash back!


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Re: Are me and mum/mom in trouble?
« Reply #8 on: January 19, 2023, 08:42:09 AM »
I should say the both myself and my mum have considered not filing taxes (if IRS read this that was a joke) and seeing if we could get away with it, but the thing that spurred us into action was my mum was filing out a form in the UK for a bank and she was required to declare that she was a US citizen and it was communicated to her that IRS might well get in touch with her, so she thinks it best to contact them before they contact her...

As for me I have no intention of living in the US in the short term but long term maybe so I am on the fence, depends how onerous it is to fill it out every year, anyone have any advice on that? Are we talking a days work every year to get it done?

Given your situation that the banks now ask  about US citizenship I personally couldn’t stand the ongoing concern that the IRS may possibly come after me sometime in the future. I would streamline file and use the stimulus money to renounce my US citizenship. But if you do think you might like to live in the USA sometime in the future then it is not too onerous to file taxes every year if your affairs are simple.  You also most likely need to file FBAR reports on every account you have signature authority over, and that only takes a couple of hours, your tax return will take longer but not too bad..
Dual USC/UKC living in the UK since May 2016


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Re: Are me and mum/mom in trouble?
« Reply #9 on: January 19, 2023, 10:30:16 AM »
@alijohnson873 - has your  mother ever paid Social security in the US? -  unlikely if she hasn't lived there for 55 years but you never know - a 90 year old could easily have 15 years of contributions and 10 years of SS payments would get a retirement pension from the US so not to be sniffed at (see my other posts on the subject).

Also as agencies (US and overseas) start to become more technologically joined up - information sharing becomes normal practice. Do you have a US passport to go with your dual citizenship? if so, renewing could become more problematic in the future if you're not on the US Treasury database.

I was out of the 'system' for over 20 years and came 'clean' through the streamlined process - onerous but worth it in the end (my US SS  pension came through last year  ;D)it's not just 3 years of back returns that need to be filed but most likely 6 years of FBARS also. Still worth it.


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Re: Are me and mum/mom in trouble?
« Reply #10 on: January 19, 2023, 12:23:45 PM »
My mum has US citizenship but has lived in the uk for 55 years (indefinite right to remain), I have not lived in the US but as she has US citizenship (I) have dual citizenship.
Are you sure you have dual citizenship? Either you were born in the US, or your mother must be over 70  years old.

We contacted a lawyer hoping they might be able to sort it out and we were quote 1000 GBP per person to do it.
The lawyer would have to use the streamlined process to enable you to come into compliance. £1,000 for 3 years of returns, plus the current year is a reasonable charge. You could do this yourself using the free fillable forms from the IRS site.

They said you need a lawyer to argue to the IRS that you haven't been avoiding paying taxes maliciously.
It's most (very) unlikely the IRS would question the returns to the point of needing representation.

1) Is it complicated to start filling in tax return yourself if you have never done so, if so where should we find the forms to do so
Is it complicated? That depends on how comfortable you are with completing strange forms. The forms can be found here:
https://www.irs.gov/forms-instructions
You will need at minimum forms 1040, Schedule B, and either 2555 or 1116 (and its associated form B), and either schedule 1 or 3 for the 1040.

2) are we likely to get fined for not doing so in the past?
If this is your first contact with the IRS,... no. If there is no tax due (thanks to either 2555 or 1116) there can be no penalty.

I would agree with  tubaleiter. You need to consider the implications going forward, and $3,200 (if it's still available), in my opinion, does not even begin to compensate you for future time and effort, or cost if you employ someone, in addition to all the complications financially. For example, do you have a stocks and shares ISA? For the mother to have at least 18 months of US employment (using the US social security / UK DPW Totalisation treaty) is, in my opinion, not worth the extra income from a US SS pension. That limited pension would be based on work income from over 55 years ago. US SS is based on income earned, and only partially (to qualify) on number of years contributions as in the UK.

In this case, and given the mother's age, the only true reason for coming compliance is your conscience and peace of mind, along with any future plans to live permanently in the US.







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Re: Are me and mum/mom in trouble?
« Reply #11 on: January 19, 2023, 12:33:01 PM »
Are you sure you have dual citizenship? Either you were born in the US, or your mother must be over 70  years old.

Yep I am sure, I have two passports, and yes my mother is over 70 years old. Funnily enough I am eligible for dual-citizenship but my older siblings aren't as I believe they changed the law after 1987


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Re: Are me and mum/mom in trouble?
« Reply #12 on: January 19, 2023, 02:47:46 PM »
I keep my finances clean and compliant. Takes less than 2 hours each year (I’d even bet less than an hour) for my returns. I have children so I benefit from the $1,400 per child per year additional child tex credit.  Once the forms have been completed once, it’s easy to use the prior year forms as a guide.

In other words, if you tax situation is aligned with US tax policies, it’s very simple and inexpensive to keep USA citizenship.  A complex tax situation, would unfortunately have to be “cleaned up or reported” and backfiled to enable you to renounce citizenship. Sadly it isn’t as simple as “ooo, this is crap, I’ll just renounce.”  You’d have to go through the motions. I suspect you could not keep your USA passport updated and possibly slip under the radar. Just harder with technology becoming more advanced.


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Re: Are me and mum/mom in trouble?
« Reply #13 on: January 19, 2023, 03:43:24 PM »
I suspect you could not keep your USA passport updated and possibly slip under the radar. Just harder with technology becoming more advanced.

So true - you might want to read this:

https://www.irs.gov/businesses/small-businesses-self-employed/revocation-or-denial-of-passport-in-case-of-certain-unpaid-taxes

Unlikely to happen in the OP's case I admit, but Government Agencies do talk to each other......


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Re: Are me and mum/mom in trouble?
« Reply #14 on: January 19, 2023, 07:39:28 PM »
If you do want to renounce your US citizenship, you could renounce without doing the streamlined tax catchup process if you have less than $600,000 (not sure exact amount) of assests.   you would be a "covered expatriate" and subject to exit tax  but under that limit you would owe no exit tax.  There are Facebook forums were people describe the process and what they did or did not do.   According to people in one of the forums, the waiting list is now back to close to a year with US Embassy in London to renounce, but if you are willing to travel to other US embassies or consulates in Europe it could be done in 3-4 months.   I would thoroughly research your options before renouncing though.


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