US Expat Faces Massive Tax Penalty

US tax bill

A Germany-based US expatriate is facing a $42,000 tax penalty bill after failing to file her US tax returns.

The expatriate—who did not actually owe any tax due the fact that the taxes she has paid in her host country entailed that she did not owe the US any additional payment—received the bill after contacting the IRS to inform them that she had been unaware of the requirement to file a tax return.

The fine, which represents approximately 67% of the expatriate’s annual income, has triggered her to sever her ties with the United States and relinquish her citizenship.

It is anticipated many US expatriates throughout the world will receive similar tax bills as a result of failure to observe FBAR requirements that are in place to prevent tax evasion.

If you are unsure as to which tax returns you should be completing please see our article on the non-resident tax returnor our free guide to your US tax liability.

 

Read the full article: http://www.ft.com/cms/s/0/4e3ab1e6-9526-11e0-a648-00144feab49a.html