Problems With Us Irs

[tutsiwarrior]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

Edited December 7, 2006 by tutsiwarrior

[Farma]

I think one of the mods mentioned he's a retired IRS man.

[smilingjim]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

1)What is the problem?

2) Are you a US passport holder?

3) have you ever filed US tax returns?

[tutsiwarrior]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

1)What is the problem?

2) Are you a US passport holder?

3) have you ever filed US tax returns?

just the requested info, please...these items to be discussed with the advisor...

[lanny]

I am a CPA, still licensed in the US and I help expats with tax matters.

Just because you don't live in the US doesn't mean you don't have to pay taxes or deal with the IRS. See my article on US taxes here on TV.

The mods won't let us put ads or email addresses, so you will need to PM me. I think I can help.

[toptuan]

just the requested info, please...these items to be discussed with the advisor...

If it's a potential legal mess, I'd find that ex-IRS TV member.

If it's a lesser problem than the above, spend $29 and get TaxCut software (downloadable), from H&R Block (easily Googled). In addition to great tax-return software, it connects you with a tax advisor (you get one free consultation as part of the package). If it's even a lesser problem, the great on-line tax assistant tools might help you.

I get no kick-backs; just used the product for over 10 years with great results.

[toptuan]

Just because you don't live in the US doesn't mean you don't have to pay taxes or deal with the IRS.

Don't you still have to make out and send in your annual tax returns even though your income may not be taxable by the US IRS?

Is there a minimum income threshhold at which you don't have to do even this much?

[lannarebirth]

I think one of the mods mentioned he's a retired IRS man.

PM "PeaceBlondie". I think he mentioned he's a former IRS auditor. Be aware you have a lot more rights than you used to since the "Taxpayers Bill Of Rights" became legislation. The IRS IMO is a perpetual pain. They make a detrmination you've done something wrong, or owe them money, and then it's up to you to prove them wrong in a specified period of time, set by them. if they don't hear from you, they assume they're correct and penalties and interest accrue. DON'T IGNORE IT!

[lopburi3]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

1)What is the problem?

2) Are you a US passport holder?

3) have you ever filed US tax returns?

just the requested info, please...these items to be discussed with the advisor...

Perhaps if you had asked for an advisor we would have been able to understand better?

//Edit: See you did have it - just my eyesight not able to read it - sorry.

[lannarebirth]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

One problem with the US, is that they tax global income despite your residency or "offshore" status. That one doesn't reside there or work there, does not make one immune from US taxes. If you earn income anywhere, they expect you to file and show why you don't owe taxes using criteria and laws that are in place. Two of the past four years I've had to set those people straight. If you don't they'll assume their assumptions are correct and really mess with you. Good Luck.

[tutsiwarrior]

thanks for all your replies. If the IRS indeed has a legitimate claim I intend to attend to my responsibility. However the problem is with a tax return filed for 2001 and I am now hearing about it for the first time and penalties and interest have been accruing for the past 4 years???!!!

yikes...

[toptuan]

They make a detrmination you've done something wrong, or owe them money, and then it's up to you to prove them wrong in a specified period of time, set by them. if they don't hear from you, they assume they're correct and penalties and interest accrue. DON'T IGNORE IT!

Well said. I had two audits introduced by two very nasty letters that threatened huge fines and penalties. In both instances, some ignorant auditor thought they'd really found a cash-cow violation to bring big penalty money into IRS coffers.

However, also in both instances, I was able to quote their own crystal-clear regulations back to them and they backed down. Still had to take the time and effort to educate their own staff about their own regulations. They gave me very limited time to get my evidence together and respond to them (something like 10 days). However, they took their own sweet time to respond back to me (something like one or two months, I had to sweat out the resulting ruling).

Happened over 10 years ago, but still get mad every time I think of the lost time and energy it cost me.

Edited December 7, 2006 by toptuan

[toptuan]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

One problem with the US, is that they tax global income despite your residency or "offshore" status. That one doesn't reside there or work there, does not make one immune from US taxes. If you earn income anywhere, they expect you to file and show why you don't owe taxes using criteria and laws that are in place.

To keep the picture balanced, there is a generous "foreign income exemption" that's part of the whole picture, right? Something like $80,000? Is that accumulative or per year? Anyone know?

Edited December 7, 2006 by toptuan

[TerryLH]

$80k = per year

The USA Embassy has people to help with tax stuff, but it may only be in the couple of months prior to 15 april. Probably worth a call to ask them.

Not sure if the USA Consulate offers a similar service.

Forms are available at the Embassy and Consulate pre tax date. Also easily downloaded.

Edited December 7, 2006 by TerryLH

[autonomous_unit]

There is a "foreign earned income exclusion" that is per year. It only applies to salary/wage or fees for services rendered... it does not apply to "passive income" like interest, investment income, rental income, etc.

There is talk about some people in Congress wanting to eliminate this exclusion, and I also think they've changed the way it works so that your exclusion cuts out the "lower" tax tiers but the remaining income is taxed at the same progressive tiers that it would be if you had been taxed on all income. (For example, a person excluding all but $10k of earned income would pay tax on the $10k at the rate of 28% instead of 10%, using 2005 rates.) I think somebody may have posted about this before...

Another thing that can be surprising is that you may have to file "self employment" tax schedules to figure out your equivalent of social security tax when you have a foreign employer (one who does not play with the IRS, issue a W2, etc.)

There is also a foreign tax credit that can offset the "taxes owed" amount but this has to be adjusted by the foreign earned income exclusion, e.g. if you were able to exclude 90% of your income then you cannot get credit for the corresponding foreign paid taxes on that excluded income. For many people who have much excluded foreign income, the standard deduction is better than trying to itemize the foreign tax credit, from what I understand.

Note, I am not a tax expert. All I know is what I learned while struggling with my own returns.

[Dakhar]

All this mumbo jumbo is why I use an accountant.

Even then, I send my papers off with my fingers crossed.

I have had the IRS deny me tax credits on college tuition. My accountant said, "Lets argue the case...."

My brother an atorney said, if you argue the case, a lot of times the IRS pulls out the microscope and tweezers, and make your life a living hates....

So I opted not to argue with the IRS.

[chingching]

To the OP, did u by chance file for Social security. I was fine with the IRS, until I filed for SS Disability. Suddenly I got a letter from them saying I owed them $70,000 and what did I think about that. I replied that I disagreed completely and couldn't fathom where they got their figures. They sent a second letter saying I needed to file a return and send it within 20 days from the date they mailed it to me. I was in the Philippines and I didn't get their letter for 30 days. Without further discussion they brought me to US tax Court. where I am now. I got a letter from the U.S. tax Court sent Oct 24 setting a trial date of March. Also saying they expect us to stipulate as much as we can, so the Court needs to decide only items in dispute, and to try to reach a settlement. So they gave us 4 months to hash things out, but I still do not even know who the opposing counsel is.

[tutsiwarrior]

To the OP, did u by chance file for Social security. I was fine with the IRS, until I filed for SS Disability. Suddenly I got a letter from them saying I owed them $70,000 and what did I think about that. I replied that I disagreed completely and couldn't fathom where they got their figures. They sent a second letter saying I needed to file a return and send it within 20 days from the date they mailed it to me. I was in the Philippines and I didn't get their letter for 30 days. Without further discussion they brought me to US tax Court. where I am now. I got a letter from the U.S. tax Court sent Oct 24 setting a trial date of March. Also saying they expect us to stipulate as much as we can, so the Court needs to decide only items in dispute, and to try to reach a settlement. So they gave us 4 months to hash things out, but I still do not even know who the opposing counsel is.

nope...it's a dispute about what I owe from a 2001 tax return (they say about 6 x the amount I paid) and the interest and penalties resulting therefrom accumulating over the last 4 years...didn't have any advice about the matter until today...

I'm oiling up the heavy ordnance...they ain't takin' me alive...

[Buckwheat]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

The 2006 foreign earned income exclusion was increased to $82400

For salaries derived from a foreign source (Thailand for example) the first $82400 is tax exempt.

If you have a USG (military, gov. service etc) or an IRA you are subject to tax at current rates.

Nope, I'm not a tax guy....just someone who is doing the two step with the IRS right now.

Edited December 7, 2006 by Buckwheat

[tutsiwarrior]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

The 2006 foreign earned income exclusion was increased to $82400

For salaries derived from a foreign source (Thailand for example) the first $82400 is tax exempt.

If you have a USG (military, gov. service etc) or an IRA you are subject to tax at current rates.

Nope, I'm not a tax guy....just someone who is doing the two0step with the IRS right now.

this might explain why some congresspeople want to restructure taxation for permanent expats...the poor guys in Iraq gettin' their asses shot off have to pay full tax on their measly GI salaries...any relief for them? no way...just tax the shit out of the expats to equalise...to make it a fairer, kinder world...

filthy hypocrites...

[Buckwheat]

it is a bit strange to have tax problems in the US when one hasn't lived there in 20 years and has no dependants, property or otherwise any connection with the place, hence my confusion...

anyone?

edit// the subject line should read US IRS, ie United States Internal Revenue Service...

The 2006 foreign earned income exclusion was increased to $82400

For salaries derived from a foreign source (Thailand for example) the first $82400 is tax exempt.

If you have a USG (military, gov. service etc) or an IRA you are subject to tax at current rates.

Nope, I'm not a tax guy....just someone who is doing the two0step with the IRS right now.

this might explain why some congresspeople want to restructure taxation for permanent expats...the poor guys in Iraq gettin' their asses shot off have to pay full tax on their measly GI salaries...any relief for them? no way...just tax the shit out of the expats to equalise...to make it a fairer, kinder world...

filthy hypocrites...

Military pay in designated combat zones are tax exempt, if I'm not mistaken.

[bri1guy]

I have heard there is a Over the internet Overseas specialist who can do your taxes and knows all the loop holes in this type of filing, sorry I don't have anymore info on it but is a search away on the internet and can save you many headaches if it is done by someone else. Next year mine will be done by someone as this and all the folling years to come.. Good luck

[lanny]

I see that a number of people have misconceptions about the US tax situation. Maybe I can help clear the air.

First, the IRS has no access the US Tax Court. They cannot, and have no reason to, go to tax court. They have the administrative powers to assess and collect taxes. Taxpayers who disagree with their assessments may have access to tax court.

The "poor guys in Iraq gettin' their asses shot off" don't have to pay taxes on their pay. All enlisted personnal may exclude all their pay while in a combat zone or in a military hospital being treated for combat injuries; officers get a partial exclusion. And various "allowances," which often make up about half of the total pay, are not taxable at any time.

Social security is not a problem for anyone working for a foreign employer. If you work for yourself, and file Schedule C, you are liable for this tax, though.

There are no permanent representatives of IRS at the embassy in Bangkok or the consulate in Chiang Mai. I believe there are two representatives in Singapore, who come to Bangkok periodically, but they have no authority to resolve cases.

I have been in contact with OP but I don't know all the details and cannot make specific comments. I will note, however, that IRS cannot simply wait 4 years and then assess additional taxes. They are limited by the statute of limitations to three years from the due date or the date actually filed (if later.) Once assessed, they have ten years to collect.

The law requires IRS to send you some very specific notices before they can attempt to collect. You do not have to actually receive these notices -- as long as IRS sends them to your "last known address" you are considered to know their contents. Your last known address is the address on the return being adjusted, a later return, or a notice of change sent to them. Registering your address with the Embassy does not give IRS a new address, you must send it directly to them.

[Buckwheat]

Jeez Lanny,

Great post.....where were you when I got cornholed by the IRS???

[PeaceBlondie]

Military pay in designated combat zones are tax exempt, if I'm not mistaken.

It depends on exactly, literally, what the law passed by Congress says (subject to interpretation, court rulings, etc.). In my first year as an auditor, I had to disallow combat pay exemption for a US Marine who was having babies passed to him on the roof of the US Embassy in Saigon, April 29, 1975. The law didn't cover that, and it didn't cover being on the boarding party of the SS Mayaguez. The Marine and his mother cursed all the way to the cashier, and I didn't blame them.

[Buckwheat]

I had to disallow combat pay exemption for a US Marine who was having babies passed to him on the roof of the US Embassy in Saigon, April 29, 1975. The law didn't cover that, and it didn't cover being on the boarding party of the SS Mayaguez. The Marine and his mother cursed all the way to the cashier, and I didn't blame them.

I can't for the life of me figure out the Saigon scenario....the Mayaguez was (we say) in international waters, they say it was not. It was not a combat zone and there was no war or conflict declared with the NK, so no combat pay was probably a correct call.

[tutsiwarrior]

thanks lanny...helps to clarify things a bit...

[Mike45]

I am a CPA, still licensed in the US and I help expats with tax matters.

Just because you don't live in the US doesn't mean you don't have to pay taxes or deal with the IRS. See my article on US taxes here on TV.

The mods won't let us put ads or email addresses, so you will need to PM me. I think I can help.

Lanny

I have looked but I can not find your article on US Taxes. Can you tell me where it is?

Thanks

[lanny]

I am a CPA, still licensed in the US and I help expats with tax matters.

Just because you don't live in the US doesn't mean you don't have to pay taxes or deal with the IRS. See my article on US taxes here on TV.

The mods won't let us put ads or email addresses, so you will need to PM me. I think I can help.

Lanny

I have looked but I can not find your article on US Taxes. Can you tell me where it is?

Thanks

Look at http://www.thaivisa.com/thailand_us_tax.0.html

[billaaa777]

How about this! Nice thread!

I am a CPA licensed in the State of Florida and I have resided in Pattaya for the previous three years. The following is the IRS’s web site that will answer most of you questions, that is if you don’t mind reading IRS manuals and instructions. Ha, Ha, Ha.

http://www.irs.gov/publications/p54/ch04.html#d0e2202

Here are some helpful hints when dealing with the IRS.

A) The most important factor to remember when dealing with the IRS, is they function off “PAPER TRAILS.” Any transaction or potential transaction that will be reported to the IRS or the IRS could have access to in the future needs to some how be covered in your tax return. Almost all of your problems with the IRS can be avoided by covering your paper trails.

File a return each and every year.

C) Keep wire transfers back to the US under $10,000.00 US. If you’re doing multiple wires use different sending and receiving banks and have those accounts linked to a main account at another bank.

D) The Foreign Earned Income Exclusion is a great asset if utilized properly. Make sure your profession meets the IRS guidelines to take full advantage of the exclusion.

Good luck dealing with the IRS. PM if you live in Pattaya and need additional advice.