American who hasn't filed US taxes for 30 years

I was having a discussion at work today with a colleague who is married to an American.  I mentioned that I filed my taxes, and she asked me why I did so because her [American] husband has never filed US taxes since moving to the UK (approximately 30 years ago).

The questions that arose were:

1.  Since he moved to the UK about 30 years ago, were there different rules for filing back then, and he might fall under those old rules which mean he's somehow exempt? 

2.  What is the official source saying that US citizens need to continue to file returns even though they are no longer resident in the US?  Is there a specific IRS publication stating this?

(is it this?  http://www.irs.gov/publications/p54/index.html)

3.  He's never gotten any kind of warning letter telling him that he's not been filing - if he was supposed to have been filing for the last 30 years, why hasn't he been penalized/fined/warned/etc?

The questions that arose were:

1.  Since he moved to the UK about 30 years ago, were there different rules for filing back then, and he might fall under those old rules which mean he's somehow exempt? 

2.  What is the official source saying that US citizens need to continue to file returns even though they are no longer resident in the US?  Is there a specific IRS publication stating this?

(is it this?  http://www.irs.gov/publications/p54/index.html)

3.  He's never gotten any kind of warning letter telling him that he's not been filing - if he was supposed to have been filing for the last 30 years, why hasn't he been penalized/fined/warned/etc?

1. I don't know, but i doubt it.

2. US taxes on citizenship not residency. No matter where you live the IRS taxes US citizens on their worldwide income so you have to file a 1040 if you meet the income requirements.

3. IRS hasn't put much effort into tracking down expat Americans who don't file their taxes....this is changing. Your friend has been lucky so far. I would not want to be in his position given the fines imposed for non filing of 1040s and FBARs.

1. I can guarantee that 30 years ago the rules were exactly the same as now, including the filing of FBARS. I believe the obligation to file has been the same since the (US) civil war. FBAR’s weren’t imposed till possibly the 60’s or 70’s (?) Edit: It was the Bank Secrecy Act of 1970. The responsibility is (was) on the taxpayer to understand their obligation. Were there adequate warnings 30 years ago? Well, that’s debateable. Some were lucky (me) and were forewarned of the obligation by an employer, other Americans, etc.

2. See information (i1040) for Form 1040, page 19, Foreign-source income. Or, as you point out, Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. Or, Publication 17, Tax Guide, page 5, U.S. Citizens and Residents Living Outside the United States. The law is the US Tax Code and the Acts of Congress imposing tax on US citizens.

3. The current situation has little to do with what has happened in the past. If they were born in the US and have not renounced their citizenship, FATCA will find them. The current guidance to banks worldwide (2nd issuance of guidelines by the Treasury/IRS) still robustly demands that ANY indication of US Citizenship be reported by the banks to the IRS. There may be other methods of detection as well (passport applications, State Pension applications, etc.).

I can’t imagine anyone being interested in this, but the actual wording for FBAR (I could be wrong) in the tax code is here:

http://www.law.cornell.edu/uscode/html/uscode31/usc_sec_31_00005314----000-.html

  

Thanks a bunch guys; I'll pass the information on to my friend.