Do US expats and green card holders need to be IRS compliant?

by Daria Vovk
Jul 1, 2024

Living abroad as a U.S. expat or greencard holder comes with certain responsibilities, including the need to be compliant with the Internal Revenue Service (IRS). Here are some reasons why it is essential for U.S. expats to fulfill their tax obligations:

  1. Legal Obligation: As a U.S. citizen or resident alien, you are required by law to report your worldwide income to the IRS, regardless of where you live. Failure to do so can result in fines, penalties, and even legal action.
  1. Avoid Penalties: Failure to comply with IRS regulations can result in steep penalties and interest charges. By staying compliant, you can avoid unnecessary financial burdens and legal consequences.
  1. Maintain Good Standing: Staying compliant with the IRS helps you maintain a good standing with the U.S. government. This can be beneficial if you ever decide to return to the United States or need to access government services while living abroad.
  1. Avoid Audit Triggers: Non-compliance with IRS regulations, such as failing to report foreign assets or income, can raise red flags and increase the likelihood of being audited. By being transparent and compliant, you can reduce the risk of triggering an audit.
  1. Access to Tax Benefits: By filing your taxes appropriately, you may be eligible for various tax benefits, credits, and deductions available to expats. Taking advantage of these opportunities can help you save money and maximize your financial resources.
  1. Avoid Legal Consequences: Failing to disclose foreign financial accounts or assets can result in severe legal consequences, including criminal charges in some cases. By being compliant with IRS regulations, you can avoid potential legal troubles in the future.

What if you are not IRS compliant?

            The stress of non-compliance is very real

            The stress of becoming compliant is also real

The consequences and stress you feel is usually far greater than the reality. The key to resolving this stress is to take action and become compliant.

There are real solutions to solve this problem and eliminate this stress. The team at US Global Tax are experts in this field.

Non-compliance with the Internal Revenue Service (IRS) can have serious consequences for U.S. expats. If you find yourself in a situation where you have not been compliant with IRS regulations, there are steps you can take to rectify the situation and mitigate potential risks. Here are some solutions for U.S. expats and greencard holders facing non-compliance issues with the IRS:

  1. Voluntary Disclosure: If you have failed to report foreign income or assets in the past, voluntarily disclosing this information to the IRS can help you avoid harsh penalties and legal consequences. The IRS offers various voluntary disclosure programs that allow taxpayers to come clean about their non-compliance and rectify the situation.
  1. Amnesty Programs: The IRS periodically offers amnesty or forgiveness programs for non-compliant taxpayers, such as the Streamlined Filing Compliance Procedures. These programs provide a pathway for expats to become compliant with reduced or no penalties and the potential for avoiding criminal prosecution.
  1. Seek Professional Help: The team at US Global Tax are experts in resolving your not compliance problem and will tailor a solution specifically for you.

US Global Tax –

Or contact us personally on [email protected] or [email protected], or 09 373 2949

  1. File Past Due Returns: If you have failed to file tax returns or report foreign income in previous years, it is essential to file past due returns as soon as possible. By proactively addressing your non-compliance, you can demonstrate good faith to the IRS and mitigate potential penalties.
  1. Communicate with the IRS: Open communication with the IRS is vital when resolving non-compliance issues. If you receive notices or correspondence from the IRS regarding your tax obligations, respond promptly and cooperatively. Ignoring IRS communications can result in escalated enforcement actions.

The team at US Global Tax deal with these issues regularly and have expertise and experience in managing these on behalf of our clients.

  1. Stay Compliant Going Forward: Once you have resolved your non-compliance issues with the IRS, it is crucial to stay compliant going forward. Keep accurate records, report all income, and fulfill your tax obligations to avoid future non-compliance issues.

In conclusion, non-compliance with the IRS can have serious consequences for U.S. expats, but there are solutions available to rectify the situation. By voluntarily disclosing information, participating in amnesty programs, seeking professional help, filing past due returns, communicating with the IRS, and staying compliant in the future, expats can address their non-compliance issues and mitigate potential risks.