Returning to US- IRS question

[swissie]

Over the weekend, after 2 years, have met a US Buddy of mine by accident. I noticed immediately, that his health has deteriorated dramatically. He agreed.

His wish: Cruise around one last time with a Motor Home (with chauffeur) in Arizona, where he grew up and spent a good part of his life. Fine !

He sees a problem: He has (since 1996) never filed any Tax-Returns in the US. He tells me that this is a MUST for any US-Citizen, no matter where he lives. He mentioned something like "My foreign income was always below the amount, that actually would have to make me pay taxes in the US, that's why I never filed any returns". (?)

Now he is afraid, that upon entry to the US, instead of cruising around in a Motor-Home in Arizona for 3 months, he will spend 3 months in an IRS interrogation facility !

Could something like this realistically happen?

I can't, but there are quite a few US-posters here, that might be able to shed a light on it.

Cheers.

[maprao]

After January they will not renew his passport if he has not been filing. You have to file every year regardless of what you are earning. Currently anything below 96500 and if you stay out of the USA is tax free

[Rob13]

He can do a streamline reporting for the past three years. Not a big problem, just a headache and a long weekend and problem is solved. Also if he has bank accounts over seas with more than $10.000 combined he has some forms to fill out. He can do all the filing after he returns to the US if he goes back before the new Passport/Tax laws take effect. After that, I'm not sure what will happen.

https://www.irs.gov/Individuals/International-Taxpayers/FAQReStreamlinedFilingComplianceProceduresNRNFTPs

[taxout]

"After January they will not renew his passport if he has not been filing."

No, the new law is nowhere near that broad. It restricts renewal of a passport only if you owe the IRS over $50,000 AND the IRS has given notice of a levy or lien in respect of the delinquency.

http://thomas.loc.gov/cgi-bin/cpquery/?&dbname=cp114&sid=cp114SczUN&refer=&r_n=hr357.114&item=&&&sel=TOC_1419708&

As to the Section 911 Earned Income Exclusion, remember that you must claim the exclusion on your tax return, it's not automatic. No tax return, no exclusion.

[TerryLH]

"After January they will not renew his passport if he has not been filing"

It doesn't appear that's entirely accurate. (See below.) It looks like you'd need to owe them around 50k plus before they'd go after your passport.

U.S. government will be able to deny new passports or revoke ones held by people with serious tax debts

Congress is poised to enact a law denying or revoking passports for U.S. citizens who haven’t paid their taxes.

Under a new law expected to take effect in January, the State Department will block Americans with “seriously delinquent” tax debt from receiving new passports and will be allowed to rescind existing passports of people who fall into that category.

The list of affected taxpayers will be compiled by the Internal Revenue Service using a threshold of $50,000 of unpaid federal taxes, including penalties and interest, which would be adjusted for inflation.

The rule has been passed in similar versions by both the House of Representatives and the Senate. It is part of a highway-funding bill, H.R. 22, that is before a conference committee.

Congress is expected to pass it in early December.

Full story: http://www.wsj.com/a...port-1447971424

.

[CaptHaddock]

After January they will not renew his passport if he has not been filing. You have to file every year regardless of what you are earning. Currently anything below 96500 and if you stay out of the USA is tax free

Flatly untrue that every American citizen has to file. Filing requirements are here:

https://www.irs.gov/publications/p554/ch01.html

[Langsuan Man]

If he is only going to be in the US for three months, why worry about it

The IRS does not have black lists at ports of entry nor do you go into any police data base

The procedure for the IRS notifying you is via your last known address and the proceedings can take months or even years and the only thing that they can do quickly is freeze your bank accounts, which doesn't sound very likely based upon the information given by the OP

Now if the OP's friend is thinking about obtaining Medicare coverage while in the US, that is a whole different ball game

Now he is afraid, that upon entry to the US, instead of cruising around in a Motor-Home in Arizona for 3 months, he will spend 3 months in an IRS interrogation facility !

It's the IRS, not the CIA, they don't have interrogation facilities, just like there are no death panels as a result of the Affordable Care Act

Where do these urban legends come from I wonder

[swissie]

If he is only going to be in the US for three months, why worry about it

The IRS does not have black lists at ports of entry nor do you go into any police data base

The procedure for the IRS notifying you is via your last known address and the proceedings can take months or even years and the only thing that they can do quickly is freeze your bank accounts, which doesn't sound very likely based upon the information given by the OP

Now if the OP's friend is thinking about obtaining Medicare coverage while in the US, that is a whole different ball game

Now he is afraid, that upon entry to the US, instead of cruising around in a Motor-Home in Arizona for 3 months, he will spend 3 months in an IRS interrogation facility !

It's the IRS, not the CIA, they don't have interrogation facilities, just like there are no death panels as a result of the Affordable Care Act

Where do these urban legends come from I wonder

Thanks ! Now, with the threat of detainment upon entry is removed, I am sure the ol' boy will enjoy his trip.

Cheers.

[gk10002000]

The IRS may and I think will likely ask him a lot of questions. He may not have had to file a tax return is his income was below the required limit ~ $10,000. While his foreign income may have qualified for the foreign income exclusion, the fact is he still earned the money and the IRS is very likely to demand he file and update his returns. If one doesn't file for the income exclusion, you don't get it. The IRS probably will assume and in their often nasty way may assume that you did not want to claim the exclusion. It is not the IRS' job to help you lower your taxes or claim exclusions. And, that is just the Federal point of view. He may have to settle up with a state or argue with states as to what he owes them or what state he is or was a resident of.

Oh and now that he is coming back to the USA, the Affordable Care Act AKA Obamacare is in effect and he will be required to enroll in that or get insurance somehow. So he has some things to consider.

My friend and co-worker recently had to settle with the IRS as he had not filed tax returns for 8 years. He was always a USA employee and always had taxes taken out from W2s at work so he paid a lot of taxes, he just never filed. Filipina wife, messy divorce, wife burned the house down, he was working on the road, etc. Anyway, hired a tax accountant, did some forensics, met with the IRS and he ended up getting several thousand dollars in tax refunds that were owed him. A pain in the butt for sure, but he got it worked out.

[NeverSure]

My friend and co-worker recently had to settle with the IRS as he had not filed tax returns for 8 years. He was always a USA employee and always had taxes taken out from W2s at work so he paid a lot of taxes, he just never filed. Filipina wife, messy divorce, wife burned the house down, he was working on the road, etc. Anyway, hired a tax accountant, did some forensics, met with the IRS and he ended up getting several thousand dollars in tax refunds that were owed him. A pain in the butt for sure, but he got it worked out.

The IRS is actually pretty good if you work with them. I would actually schedule a meeting with them and work out a deal. I've seen them even forgive back taxes by making a settlement for far less including allowing payments with someone who couldn't pay.

What they hammer people for and what one should be afraid of is owing big taxes and lying on a return, or skipping out owing big money, etc. That can result in prison time.

If he doesn't actually owe any money and can basically substantiate that, they can waive the need to file and do an "interview filing" as they want to clear the decks too. Don't think that they want to assign an agent to spend tons of time digging into this from their end to try to prove something that isn't there.

He'll feel a lot better if he contacts them himself and gets this settled. He'll be surprised how decent they really are.

Cheers.

[zierf1]

Something like $95k+ is tax free. If you're super worried, get your wife to open you a "stealth" bank account.

[JohnOFphon]

Hey if he needs a driver and will pay my airfare, let me know.

[Nomyai]

If he is only going to be in the US for three months, why worry about it

The IRS does not have black lists at ports of entry nor do you go into any police data base

The procedure for the IRS notifying you is via your last known address and the proceedings can take months or even years and the only thing that they can do quickly is freeze your bank accounts, which doesn't sound very likely based upon the information given by the OP

Now if the OP's friend is thinking about obtaining Medicare coverage while in the US, that is a whole different ball game

Now he is afraid, that upon entry to the US, instead of cruising around in a Motor-Home in Arizona for 3 months, he will spend 3 months in an IRS interrogation facility !

It's the IRS, not the CIA, they don't have interrogation facilities, just like there are no death panels as a result of the Affordable Care Act

Where do these urban legends come from I wonder

There are death panels. They just arent called death panels!

[Rhys]

Only matters if you draw ssi.

[gk10002000]

Something like $95k+ is tax free. If you're super worried, get your wife to open you a "stealth" bank account.

But one needs to pay attention to the times involved. One has to be out of the USA for most of the calendar year. You can't be out 6 months one year and 6 months the next. For example, can't be out from July to December say 2014, and out from January to June 2015. You get something like only 30 days you can be gone or you need 11 continguous months, something like that in any calendar year.

[gk10002000]

And if he is getting a USA State issued Driver License, most states have stricter requirements to get a Driver License. They require things like having to show two bills with your name and address on it. They have to be current bills. So if he is driving and wants proper insurance in case of an accident, not sure how he will or wants to handle that.

[Langsuan Man]

And if he is getting a USA State issued Driver License, most states have stricter requirements to get a Driver License. They require things like having to show two bills with your name and address on it. They have to be current bills. So if he is driving and wants proper insurance in case of an accident, not sure how he will or wants to handle that.

The guy wants to travel around the US in a motor home with chauffeur

The friend is worried about getting stopped entering the US, where in the world did a drivers license and insurance enter into the discussion

Is it even possible to keep Thai Visa poster on point or are we going to hear the old refrain I haven't read the entire post but..........

If you haven't even read the initial post don't make a fool of yourself by posting

[gk10002000]

And if he is getting a USA State issued Driver License, most states have stricter requirements to get a Driver License. They require things like having to show two bills with your name and address on it. They have to be current bills. So if he is driving and wants proper insurance in case of an accident, not sure how he will or wants to handle that.

The guy wants to travel around the US in a motor home with chauffeur

The friend is worried about getting stopped entering the US, where in the world did a drivers license and insurance enter into the discussion

Is it even possible to keep Thai Visa poster on point or are we going to hear the old refrain I haven't read the entire post but..........

If you haven't even read the initial post don't make a fool of yourself by posting

Well, that is none of your concern now is it. If you don't like what I wrote, don't read it.