IRS Provides Some Peace of Mind to International U.S. Taxpayers

U.S. citizens and dual citizens residing outside the U.S. are usually required to file income tax returns  and may be required to file form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) ( “FBAR”).   Over the past few years, the U.S. government has been aggressive in pursuing those taxpayers who neglected their obligations to file these documents.  Many taxpayers, however, were unaware of their obligations to file income tax returns and FBARs.  They became very nervous about the consequence of their failure to file.  The IRS, in FS-2011-13 (December 2011), provides a summary of requirements for filing income tax returns and FBARs.  FS-2011-13  also announces that the IRS will not impose penalties in all cases.  Thus, the info in FS-2011-13 should provide some, though maybe not complete, peace of mind to international U.S. taxpayers.

The IRS will not impose  failure to file or failure to pay penalties on taxpayers who owe no US. tax.  In addition, if the IRS determines that a failure to file an FBAR was due to reasonable cause, it will not impose an FBAR penalty.

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