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Topic: Failure to file a US tax return is subject to a $10,000 fine for each year.  (Read 4579 times)

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Some people are happy to become US citizens but if they move to a foreign country they find they have to file a tax return each year whether they made any income or not. Failure to file can lead to penalties of up to $10,000 per year for each year.

People can get away from this by formally renouncing their citizenship but before this is excepted by the US government their tax obligation and filings must be current.

This is my understanding after reading this article. It is about US born Canadians who are being notified by the US government of their liability. Some were children when they moved to Canada but they still have to file a return because they have US citizenship.


http://www.timescolonist.com/business/American+hunt+haunting+Victorians/5447340/story.html
« Last Edit: September 28, 2011, 05:09:12 PM by Cheers »


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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #1 on: September 28, 2011, 04:41:11 PM »
Ut oh, I thought that if you made below the threshold you didn't have to file!


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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #2 on: September 28, 2011, 04:44:01 PM »
You don't.


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« Last Edit: September 28, 2011, 05:05:25 PM by Cheers »


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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #4 on: September 28, 2011, 05:16:03 PM »
The big penalty is for failing to file the FBAR, not the 1040.
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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #5 on: September 28, 2011, 05:47:34 PM »
Thanks for posting this, good to know! So only filing the FBAR is necessary, not the 1040?
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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #6 on: September 28, 2011, 06:18:29 PM »
Sorry, but what is the FBAR?
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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #8 on: September 28, 2011, 06:34:56 PM »
Ut oh, I thought that if you made below the threshold you didn't have to file!
You don't.

Not trying to be argumentative, but I thought if you earned any income you have to file, even if you're not going to owe any taxes.


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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #9 on: September 28, 2011, 06:52:21 PM »
Not trying to be argumentative, but I thought if you earned any income you have to file, even if you're not going to owe any taxes.

I was under that impression myself... I guess the best way of finding out would be scouring the IRS website? ???
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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #10 on: September 28, 2011, 06:59:09 PM »
He said whether you have any income or not.  You don't need to file if you have 0 income.

Also, unless it is different because we are overseas, you don't need to file if you make below the income level.  You probably should because you might get money back and/or if you want to return to the US with your spouse you need to.


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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #12 on: September 28, 2011, 07:17:53 PM »
Thank you for the info, LittleMissSarcasm!
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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #13 on: September 28, 2011, 07:18:05 PM »
So according to the 1040 instructions, no you don't need to file of you make under the income threshold.  

If you have any accounts over 10,000 you do need to file the FBAR.

I believe that is what the article was referring in terms of fines btw as it says:

Quote
U.S. legislation allows for fines of up to $10,000 per offence per year for non-wilful failure to disclose financial holdings.

Penalties can reach $100,000 and up to 50 per cent of the value of a holding if the U.S. believes someone was intentionally trying to avoid filing.

Read more: http://www.timescolonist.com/news/American+hunt+haunting+Victorians/5447340/story.html#ixzz1ZGwCG6Q2

Bolding mine. It doesn't say not filing your taxes it says financial holdings, so that would be the accounts Fbar thing.


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Re: Failure to file a US tax return is subject to a $10,000 fine for each year.
« Reply #14 on: September 28, 2011, 07:18:30 PM »
Thank you for the info, LittleMissSarcasm!

 ;D Anytime!
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