Taxes: To hell with it?

I moved to Ireland in 2004 and each year have dutifully filed my taxes. This year I didn't bother and let the traditional April deadline pass, but I see we expats still have until June 15th. A few years ago I actually called the IRS to see was I really going to be burdened with this seemingly irrelevant chore for life. After all, I doubt I'll ever owe anything (and even if I was above the exclusion due to the exchange rate there is no way I could afford double taxation with the cost of living here... I'd much rather earn $30K in the US than €50K here). Anyhow, I was actually impressed with how quickly I was put through to a specialist who informed me that yes, we are indeed bound to file taxes for life.

So what is all this extra useless information building to? Have any of you just said to hell with it? Do you ever worry about repercusions when you visit home or if you were to ever move back? I'd love to hear your stories.

Amen brother but not filing will surely lead to trouble down the line. For example, they have a plan to make passport issuance depending on paying taxes:

http://www.gao.gov/products/GAO-11-272

The only escape is expatriation and even for that you have to be up to date on taxes.

There are an estimated 5 to 6 million Americans living outside the US. The IRS only takes statistics every 5 years on Forms 2555 (FEIE) and Form 1116 (FTC), and the latest is for 2006.

Form 2555 - 334,851 filed (worldwide)

Form 1116 - 2,941,952 filed (total). But only 968,652 were in the general limitation income category. Only 317,831 listed a foreign country.

Of course, there must be many who fall below their respective filing threshold, or have no need to file the above forms.

I would guess there are 1 or 2 people who may be saying to hell with it. With new legislation these figures may change significantly. And, the requirement to file probably won’t change anytime in the near future. As the IRS now states on all such issues, we chose to live in a foreign country. So, no surprises there. (Better the Devil you know,…..?)
 
There's a fuzzy statistic that claims 45% of all Americans living in the US pay no tax to the IRS. That probably won't change.

(Yes, I know: boring old git. Talk about useless information.)

http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96621,00.html

Only two things are a sure thing in life: death and taxes.

I don't mind having to file them. It's not like I have to pay anything, it's just a minor annoyance every year. I do hate filing state taxes, though. I think it's just more red tape. If I file fed taxes which show that I'm out of the country and beneath the exemption earnings, why do I have to file piddley state taxes too?

Well, we do know of one US citizen who's been working in the UK for about 30+ years and has never filed -- nor done the FBAR I imagine.  I don't doubt he's not the only one.

FATCA will find most US persons living in the UK who have not filed.  Penalties for wilful failure can ultimately include jail time, so compliance is the only prudent answer.

Ah yes - I can just see the news:

AP (4/1/2014) FBI agents spread out across Britain this morning to track down thousands of renegade Americans. Sandy Moore was cornered by agents in the Northampton Tesco. She is accused of failing to report her status as treasurer of the local Scout troop in 2008 on US Treasury form TDF 90-22.1. She is also accused of running a cake stand at the school fete and failing to file IRS Form 5471 for Foreign Corporations. Senator Boss Wrinkley said "Millions of hard working American families expect no less. We cannot tolerate these unpatriotic citizens hiding their millions in foreign bank accounts and sipping pina coladas on their yachts." Meanwhile, US Army Core of Engineers has been busy preparing camps to house the millions of former expatriate Americans rounded up so far .....

I don't wish to sound contradictory, but there could be 1 major fault with your mock news flash. Shouldn't that be corps instead of core? I could be wrong. You may have to take appropriate action to correct the situation. If the possible oversight is corrected within a specific time period, it is my (amateur) understanding there will be no penalties involved provided you use the appropriate methodology. You may want to seek professional assistance to ensure its accuracy. According to Senator Boss Wrinkley, "defamation of the US Army from a foreign jurisdiction by an American expatriot could result in legal (or military) action". 

 

Judging from the state of the dams and levees in the US I think you would be pretty safe from the ACoE in the UK. 

Ah yes - I can just see the news:

AP (4/1/2014) FBI agents spread out across Britain this morning to track down thousands of renegade Americans. Sandy Moore was cornered by agents in the Northampton Tesco. She is accused of failing to report her status as treasurer of the local Scout troop in 2008 on US Treasury form TDF 90-22.1. She is also accused of running a cake stand at the school fete and failing to file IRS Form 5471 for Foreign Corporations. Senator Boss Wrinkley said "Millions of hard working American families expect no less. We cannot tolerate these unpatriotic citizens hiding their millions in foreign bank accounts and sipping pina coladas on their yachts." Meanwhile, US Army Core of Engineers has been busy preparing camps to house the millions of former expatriate Americans rounded up so far .....

If only I could laugh at this, unfortunately the IRS doesn't have a sense of humour.  It may well be possible to fly beneath the IRS radar when you are a low earner abroad, but for most US expats the time comes to return to the US and then not filing 1040s and TDF****ing 90-22.1s becomes an issue. For the majority of US expats who pay taxes to HMRC there's going to be no US tax due anyway so why not make sure you avoid the stress of a letter or fine from the IRS by simply filing your taxes?

For the majority of US expats who pay taxes to HMRC there's going to be no US tax due anyway so why not make sure you avoid the stress of a letter or fine from the IRS by simply filing your taxes?

Agreed, in principle -- but some people may never have known it was required, especially those with low incomes. I know ignorance of the law is no excuse but it's frightening to think what else you might not have known about pre-internet.

Honestly, if it wasn't for this forum and all the knowledgable people here, I wouldn't even have thought to search for the tax information.  I would have just thought, "well, I'm not a resident of the States, so I don't have to file taxes since I'm paying them in my new country."  (Nevermind about state taxes)

It may well be possible to fly beneath the IRS radar when you are a low earner abroad,

I agree that you should file. You have no choice, and as guya points out FATCA will make the radar difficult to avoid. I still found Weller’s post amusing (gallows humour?).

We each have our own hobby horses, and mine’s obviously pensions. Given the right conditions, a ‘low earner’ over 65 in the UK could owe US tax, even with UK tax paid and using Form 1116 (their only choice). This occurs between £6,786 and £13,950 ($10,450 to $21,406 at 2010 rates). It’s worse if ISA’s are involved. It must seem ridiculous to people in that situation. As BostonDiner points out, not everyone tunes in to UKY or BritishExpats, even today.

As the IRS now states on all such issues, we chose to live in a foreign country.

Some people are babies when they make that 'choice'!