US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
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NB: This discussion is a continuation of an older discussion that became to large for our software to handle well. See US expat tax and FBAR: Discussion thread (Ask your questions) Part One.
Does anyone think that the use of my old address is suspicious?
I’ve often thought that long-term expats with no US assets are the perfect targets for identity theft or other scams. I haven’t needed my SSN for anything in almost 25 years, except for passport renewals and US tax reporting.
Maybe I SHOULD ask the IRS if they mail from Estonia?
@ Petlover
Isn’t it great when “no action taken” turns out to be not only easy but the best decision? File it and forgeddaboutit. Enjoy your day. Enjoy your life. You ARE free! BTW, since the letter was sent to the wrong address, who’s to say you ever got it?
Petlover – if you decide to ring the IRS, I wish you luck with your enquiry.
But if it was me I’d leave the IRS to paddle its own canoe and just keep an eye on bank accounts to make sure no unexpected deposits (or withdrawals) appear.
Which is always advisable anyway.
@petlover
I had my identy stolen some years ago when a certain US medical registration board asked me to supply my ssn for the first time, so I am always super suspicious of any info giving.
It coulld be that the IRS are totally inefficient re your old address or it could be a scam.
If you can through to them and it will help then its worth a try, but I would be very cautious of giving any more info if requested until I was sure where it was going.
Okay. I will watch and wait. Just to be sure, I am going to take some basic data protection precautions and make some changes in security protocols. I wonder if I’ll ever hear any more from them….
“The letter says they received my form 1040, they are working on my account, and that they require an additional sixty days to send me a complete response on what action they are taking on my account.”
They might or might not read your form 1040. They just need more time to decide. Those letters used to say 30 days. Although the IRS usually ignores my letters, sometimes they send me one of those like what they sent you. For example I asked them a question in 2010 and they sent one of those letters, so someday there’s going to be a 30 day period when they’re going to decide if they want to read the question that I sent in 2010.
…
‘If I’m not mistaken, posting date is taken as date received.’
It isn’t. For some legal purposes the date is the date mailed, which is unrelated to the date written in the letter. I don’t know if there are some legal purposes for which it means the date written in the letter. But it never means the date received.
…
“Weirdly, the letter was posted from Tallinn, Estonia.”
They change from time to time, sending sea mail from Germany to Japan, or sea mail from the UK to Japan, and then for a while air mail from the UK to Japan, and then sea mail from Estonia to Japan, and then one time air mail from Estonia to Japan.
Sometimes they used to send International Surface Air Lifted from the US, which means it would take one leg by air for example maybe Guam to Okinawa, but the rest of the transit would go by sea.
They do the same thing with other kinds of letters, some of which tell you to reply within 10 days of the date of their letter but of course you need a time machine to do that.
The best news of all is that even if you have to reply within 10 days of their letter, if it legally means within 10 days of the mailing date shown in their postmark, well their postmark doesn’t show any mailing date.
On rare occasions they send something from the US with a date shown in a US postal meter. On even rarer occasions they affix proper postage; otherwise they affix insufficient postage, for which the IRS famously publishes its position that the post office won’t deliver mail without proper postage.
By the way did they address the letter to your correct address? If they did, that’s even weirder.
Oh wait, later you said they didn’t. That’s par for the course.
…
‘Could be some sort of scam if that’s the case.’
We already know the IRS employs scammers. A few have been jailed. Congress passed a law forbidding the IRS to rehire former employees who had been fired for malfeasance, but the IRS doesn’t obey the law. But that has nothing to do with the useless letter that we’re discussing here.
There is a striking difference between the CRA and IRS. I e-filed my Can. tax return this morning.
11 hrs. later the return has been assessed and the numbers posted on my CRA account which is available to me on-line. Rather different from IRS where we haven’t heard sfa after a year.
Thank you, Norman Diamond, for that very detailed answer.
The letter is dated March 14. There is no date on the envelope for when it was posted. It arrived yesterday, so it took six weeks to reach me. Thus 30 of the 60 days they mention have already passed.
The 1040 part of the dual status return was for the part of the year after I expatriated. It was a bunch of zeros because I have no US assets. I can’t imagine what they could possibly need to deliberate on.
“The 1040 part of the dual status return was for the part of the year after I expatriated.”
The 1040 part is supposed to be for the part of the year that you WERE a US person. You might want to recalculate that and figure out if you actually owed some taxes for that part of the year. For this mistake there’s a chance that they might really figure something out and send a real letter.
@Norman Diamond
Oh, that’s right, I confused it with the 1040NR. I filed correctly, just remembered it wrong.
There’s nothing for me to go back and check. I earn wages for a 6-8 hour a week job. My earnings didn’t even warrant filing since I was under the threshold. I have no assets because everything is in my husband’s name, and I have no stocks, bonds, mutual funds or retirement accounts. The whole point of relinquishing was so I could start doing some financial planning without all the US reporting crap.
Like I said, I can’t imagine what the IRS could have an issue with.
@Norman Diamond
There’s a reason I got confused, here’s why:
As part of the final filing procedure I had to send forms to 2 places, Austin and Philidelphia. I sent a completed, signed 1040NR to Austin along with an unsigned 1040 marked as “dual status statement” (as per their instructions).
Going back to check what I did makes this seem even stranger because the letter is from the IRS in Austin, who didn’t technically receive an official 1040 from me. Yet, their letter to me says it is in response to my 1040 filing.
I have no idea wtf is going on….
It sounds like you did it right (as you say, you only remembered wrong). So when the IRS’s letter says Form 1040 instead of 1040NR, the IRS is confused (which is nothing new).
Petlover. File and forget.
We were umder the threshold for both 1040 and 1040nr so opted not to file either of them. Only sent 8854 to Philadelphia.
I bet neither of us has a problem.
I’m reporting here on my on-going saga with the IRS letter I got. My US-resident mother decided to give them a call and to find out more. She didn’t use names or SSNs, so she got these generic responses:
1. It is not uncommon to get such a letter, especially if this may or will, technically, be your final tax form.
2. The IRS looks backwards to see if you should have filed taxes for other years, if all you paperwork is in order, etc.
3. A paper return gets more attention from the IRS that an e-filing.
4. It is possible mail could have come from Estonia (or any one of several European countries).
5. If there is a letter number (each type of letter has a number, usually in the right hand corner of the first or second page) it is much easier to find out what they are talking about. You can do that on line without having to give out your “numbers.”
The last little tidbit was interesting. There are actually several numbers/codes in the right hand corner, so I tried them all on the IRS website and only one showed a horrifying result: non-filer investigations.
@petlover
Thanks for your follow up. That is certainly very useful information for others here.
Try not to worry, there is nothing to be gained by them chasing minnows who don’t owe anything and impossible for them to collect any of their unreasonable demands. I expect you will hear nothing further.
Hi: I am 22 and was born in the U.S. because my parents were there at the time. I lived there when I was four (in 1999) but have only ever been back once since. I am a uni student with little to no assets but I don’t want to get to 60 and find I owe a 7 figure tax bill. Also, the ‘dual citizenship’ saga has given me an excuse to otherwise renounce it.
I understand I have to show I am compliant and complete form 8854 – according to the form there is no option. What do I do, is there another form or should I seek a tax lawyer?
@ New York,
Welcome to Brock! You don’t need a tax lawyer — and likely not even an accountant as your finances are probably pretty simple at this stage of your life.
You don’t have to show that you’re tax compliant in order to renounce. The embassy/consulate isn’t interested in that and does not ask about it, as one’s tax status does not affect one’s citizenship status (or lack of citizenship status). The citizenship aspect (Dept of State) is separate from the tax aspect (IRS). Here’s a page that explains that more fully explains the relationship between Department of State and IRS regarding renunciation.
Regarding forms, there are links to the Dept of State renunciation forms in the Sidebar in the “Important Information” box and also some useful links there for How to Renounce/Relinquish and the Consulate Report Directory.
New York. To confirm what Pacifica said, you can renounce before even thinking about whether to file tax forms and if so which ones. There is NO tax obligation before renouncing.
If you have no US connections, no social number, no passport etc., many of us would advise you to not bother filing any tax forms.
@New York, confirm what Pacifica and Portland said. There’s no need to be tax compliant before you renounce. I renounced first and then dealt with the paperwork after. And if you don’t have an SSN (Social Security Number) then don’t even bother applying for one. You’re not in the US’s tax system so they don’t even know about you. Renounce and forget.
The Excel spreadsheet ‘FBAR Civil Litigation Spreadsheet’ https://drive.google.com/file/d/1QhDAoXDCOQoVjiHiWJN8LTICZWbnDrl2/view in this blog post seems to indicate that there is limited cases of FBAR civil litigation even inside the US?
http://federaltaxcrimes.blogspot.ca/2018/05/data-table-and-statistics-on-fbar.html
Caveat for above, and for what follows, not intended as an endorsement of the blog author or services.
See also powerpoint here;
Presentation on Collection of Title 31 International Penalties (Including FBAR)
http://federaltaxcrimes.blogspot.ca/2018/05/outstanding-presentation-on-collection.html
(not sure why but powerpoint isn’t opening fully in my browser).
From same blog above (again, no endorsement of same) more on recent developments re the ceiling for FBAR penalties;
‘District Court Caps IRS Authority to Assess Willful FBAR Penalty at $100,000 (5/19/18)’
http://federaltaxcrimes.blogspot.ca/2018/05/district-court-caps-irs-authority-to.html
I read a couple of times things like ” renounce and forget about it”. I however received a letter from my bank. They ask me to fill in my SSN, or tell them I am getting one etc. They will transfer all my account details to the Dutch tax office, who will forward everything to the IRS. So how can I renounce and just forget when the banks here are on our Accidental-American-tails?…
It should be simple – renounce and then present them with a copy of your CLN instead. Since that proves you’re no longer a US citizen, they don’t need an SSN. If you don’t have an SSN then the IRS can’t do anything anyway since you’re not in their system.
Thank you Media Fleecestealer. To my surprise the Dublin Consulate informed me an SSN was issued to my name. I have no clue where it came from as I have lived in the Netherlands since I was 2 yrs old. I am in their system…