The International Schools Review Forum

I have a friend who's been out of the US for 10 years, This person hasn't filed taxes for the majority of that period, but feels a need to make amends and start afresh. This person has been teacher the whole time and not earned anywhere near the US tax threshold (I'm not from the US, so just going by what I've read). This person has a few odd bits of tax paperwork, but most of it is lost, and can't be got again. What are this person's options to straighten things up?

I didn't file taxes the first 5 years I was overseas. When I decided to come clean, all that was necessary was for me to file the past due returns. Since I never approached the FEIE cutoff, I did not owe any back taxes and therefore did not have to pay any additional fees.

Unless your friend has US income (investments, a side job, etc.) it should be relatively painless to clear everything up.

No, pretty sure they don't have any income in the US.

Print each years tax forms, and the individual instructions, sit down for a long Saturday, fill them out, and then mail them. Just estimate the numbers if you dont have records.Assuming you had no tax liability there are no additional fees or interest.

Be sure the person qualifies as a bona fide resident of another country for each tax year as it is possible to teach overseas and not pass the test. I had a friend who spent all of her December, April, and summer breaks in the US. Based on how much time she spent at home the IRS decided her foreign income could not be excluded. Her tax bill was brutal.

You may suggest to your friend that if there is a year they dont meet the test for the Foreign Income Credit, that they may want to think really hard about how long they were out of the country so that they would qualify for the foreign tax credit. Any liability from that far back (10 years) is going to be very devastating given interest and penalties. I would review and make sure all the math comes out.

It's actually even easier than the previous posts have indicated. As of 2012, the IRS has a "streamlined" process to help overseas non-filers rejoin the fold. Unless they have reason to think you're hiding millions offshore, the IRS will settle for returns from the last three years. The details for the policy can be found at https://www.irs.gov/individuals/interna ... procedures.

I did this a few years ago after a decade of non-filing, and it worked like a charm.

Cheers,

I wouldnt use that program, youre giving up some rights and putting a target on yourself for the future. If the LW has limited information anyway, its not going to be any significant burden to file standard returns for all years.

I've used turbo tax with success. It is probably more trouble than actually filling out the paperwork though.