Resources for International Taxpayers
- A U.S. citizen or resident alien working, living, or doing business abroad or receiving investment income from abroad.
- A U.S. entity doing business abroad or receiving investment income from abroad.
- A foreign individual working, living, or doing business in the United States or receiving investment income from the United States.
- A foreign entity doing business in the United States or receiving investment income from the United States.
Topics on this page include:
- Frequently Asked Questions
- Advocating for International Taxpayers
The Taxpayer Advocate Service is Here to Help
Common questions from international taxpayers include:
I’ve heard that some taxpayers give up their American citizenship or status as long-term residents (i.e., taxpayers who have held a green card during at least 8 of the last 15 years) for federal tax purposes. Is that true? What do I need to know about that?
Q. How can I find out if I’m required to file a U.S. tax return and whether my income is subject to U.S. income tax?
Q: I don’t have a U.S. income tax liability. Does that mean I don’t have to file a return with the IRS?
- You’re a U.S. citizen or resident, a domestic partnership, a domestic corporation, domestic estate, or trust, and
- You have a financial interest in or signature authority or other authority over any financial account in a foreign country, if
- The aggregate value of these accounts exceeds $10,000 at any time during the calendar year. Read these FAQs to find out more.
Q. Once I file any required FBARs, can I assume I’ve reported everything I’m required to report about my foreign accounts or other assets?
|Situation||Option for Tax Compliance|
|You properly reported all your income and paid the tax on it, but recently learned you should have been filing FBARs.||
File the delinquent FBARs according to the instructions and attach a statement explaining why they’re late.
The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and you haven’t previously been contacted about an audit or a request for delinquent returns.
|You didn’t file certain required information returns such as Form 5471 for controlled foreign corporations (CFCs) or Form 3520 for foreign trusts, but you reported and paid tax on all your taxable income with respect to all transactions related to the CFCs or foreign trusts.||
File the delinquent information returns according to the instructions for the form and attach a statement explaining why you are filing them late. (The Form 5471 should be submitted with an amended return showing no change to income or tax liability.)
|You are a non-resident U.S. taxpayer and you didn’t file returns, but the returns have low risk factors (including tax owed in an amount such as $1,500/year).||File delinquent tax returns, including delinquent information returns, for the past three years; delinquent FBARs for the past six years; and additional required information regarding compliance risk. You must pay any federal tax and interest due at the same time of the submission. The IRS website has more information about this option.|
|You have undisclosed foreign accounts and unreported income or you are seeking protection from criminal prosecution, or both.||Consider asking the IRS to accept you into the Offshore Voluntary Disclosure Program (OVDP). OVDP offers a civil settlement structure in which taxpayers pay an offshore penalty in lieu of other penalties that may be assessed for offshore noncompliance. The OVDP also offers protection from criminal prosecution. If you are preliminarily accepted into OVDP, you must submit certain information, including eight years of amended tax returns, FBARs, and information returns as well as information about your offshore accounts. In addition, you must submit full payment of the tax and interest due, and certain penalty amounts. You may enter into the OVDP and later elect to opt out of the civil settlement structure of the program. In such situations, the IRS will determine if penalty mitigation is appropriate.|
|You have an interest in a Canadian RRSP or RRIF and you either (i) didn’t make an election on Form 8891 to defer paying tax on the investment income earned by the fund until you receive distributions or (ii) didn’t file annual information returns on Form 8891.||Consider asking the IRS to accept you into the Offshore Voluntary Disclosure Program (OVDP).|
Q. I’ve heard that some taxpayers give up their American citizenship or status as long-term residents (i.e., taxpayers who have held a green card during at least 8 of the last 15 years) for federal tax purposes. Is that true? What do I need to know about that?
From the 2012 Annual Report:
From the 2011 Annual Report:
- International Issues (five specific problems affecting individuals and businesses)
Back to top