Filing US Taxes

So I've been researching things and I know if I ever moved to the UK I would have to file US taxes. But I don't understand why.

I know the U.S. would tax me on what I earned worldwide but why? If I don't live in the country, work in the country or spend my money there, why would they want a tax return from me?

It just doesn't seem...right?

Because that's how the US works. They tax on a worldwide basis. Being a US citizen has many privileges. This is one of the responsibilities that comes along with being a citizen. There are tax treaties with many countries (including the UK) that means you avoid double taxation.

Oh ok. Thank you! Double taxation was going to be my next question.

I still don't think someone living in the UK should have to file a US tax return, especially if they aren't working, living or using the US for anything, but I guess that's just the way things are.

I still don't think someone living in the UK should have to file a US tax return, especially if they aren't working, living or using the US for anything, but I guess that's just the way things are.

Yeah, it doesn't seem right, but unfortunately it is the way things are.

Even someone who is an 'accidental US citizen' has to file US taxes every year (i.e. someone who was born in another country and who has never set foot in the US, but is a US citizen through their parents; or someone who happened to have been born in the US to foreign parents, but has never actually lived there).

Being a US citizen has many privileges.

Only one privilege of relevance to US citizens overseas: The right to enter, live and work in the USA. That's it - can't think of anything else.

Only one privilege of relevance to US citizens overseas: The right to enter, live and work in the USA. That's it - can't think of anything else.

You don't think voting is a privilege?

Our passports also provide us with a lot more international mobility than many other countries. Just in terms of ease of travel for leisure, we have it really good.

Our passports also provide us with a lot more international mobility than many other countries. Just in terms of ease of travel for leisure, we have it really good.

But a British passport is better!

http://www.telegraph.co.uk/travel/travelnews/10928261/Britain-tops-list-of-worlds-most-powerful-passports.html

You don't think voting is a privilege?

Our vote is dispersed over every state and district and so has little effect. Our representatives feel free to ignore our concerns. For example, they know all about the serious negative consequences of FATCA for us but they do nothing about it.

I think voting should be based on residence not citizenship.

Remember Florida in 2000? I do believe the absentee ballots were a deciding factor in the end, hanging chads notwithstanding. And we all know what that led to......

Our vote is dispersed over every state and district and so has little effect. Our representatives feel free to ignore our concerns. For example, they know all about the serious negative consequences of FATCA for us but they do nothing about it.

I think voting should be based on residence not citizenship.

Are there any countries that allow voting based on residency?

I have a proposition.

If I promise to never, ever vote in a US election again, on penalty of $10,000 per candidate voted for on the ballot and/or 3 years in jail, will the IRS promise that I never, ever have to file a US tax or information return again?

Are there any countries that allow voting based on residency?

Yes. The UK allows Irish and Commonwealth citizens living in the UK to vote in all elections. It also allows EU citizens to vote in local and European parliament elections.

There are many countries that forbid non-resident citizens from voting. UK citizens are not allowed to vote if they have been gone from the UK for more than 15 years.

Even the USA allowed voting by resident aliens in the past:

http://en.wikipedia.org/wiki/Right_of_foreigners_to_vote_in_the_United_States

I have a proposition.

If I promise to never, ever vote in a US election again, on penalty of $10,000 per candidate voted for on the ballot and/or 3 years in jail, will the IRS promise that I never, ever have to file a US tax or information return again?

Not everyone wants to give up their right to vote, though.

I didn't say everyone had to give up their right to a vote, just those like minded individuals who would prefer to instead of filing tax and information returns. But in fairness to you, it was a flippant comment.

It's been a while since we had a serious debate on this site about US expats having to file returns, and the pros and cons. When it last occurred, there were a different group of posters who frequented the site. Only a few of us were around then. It would be interesting to hear the views of those newer to the site who may not have had an opportunity to voice their opinions.

We have all heard the reasons for filing, but what are the benefits of filing to the expat community?

Filing tax and information returns allows us the benefit of returning to work and/or live in the US without problems, although not filing can not (to my understanding) prevent us from returning. But as far as I know, all other countries will welcome back their expats who have not paid tax on foreign source income while abroad (for the obvious reason all the others have RBT).

We have the right to vote, but is that a benefit derived from filing tax returns?

There is the great urban myth about US persons who are in danger will be saved by the US Marines. A quick check of the US Department of State site will dispel that thought quickly, although in certain circumstances it may happen, at a price. (I'm thinking of past events in Lebanon where a US Navy ship was sent in to evacuate US Citizens, but so did the French and the British.) But did they inquire as to an individual's tax status before boarding was allowed?

And also, there's.......................well, I can't think of any other benefits.

The standard reply is "but only 15 to 20% of expats will owe any tax to the US". That's true. You may not pay any tax for 15 years, but if you sell the house you bought in London 15 years ago, there's a likely hood you would be paying tax to the US that year. What benefit do you derive from that tax paid?

The most valid reply is "I want to keep my US passport, and having to file returns is the price I pay as a US expat".

Serious comment (for a change), but it would be interesting to hear thoughts from those who may have never voiced an opinion on this topic before.