American Living abroad - Haven't filed taxes for 6.5 years, what do I do?

Posted by Mrf411s@reddit | expats | View on Reddit | 133 comments

Hi all,

I have been living abroad in Germany for the last 6.5 years. For the first 4.5 years I was studying and earning minimal income. For the past 2 years I have been working full-time on a German Contract and earning EURO, not USD. I had no idea up until last year that I had to still file taxes in the US even though I had no income in the USA. I am now trying to understand and gather as much information as possible in order to avoid fines or penalties. I am sure that I am not the only one that this has happened to before. Can anyone help me out or give me some ideas on how to go about this situation?

Would it be possible to file 0 on all previous tax years I have missed and send them to the IRS, simply filling out the forms without a tax consultant? Do I need an international tax consultant?..etc. these questions are going through my head...

P.S. I also plan on staying in Germany long-term and want to keep my US Citizenship!

Anything helps thanks,

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L6b1@reddit

OP, I would use u/tomorrow509 accountant recommendation and spend the $1-2,000 now to resolve. There are usually no penalties and no interest, even on years you actually did owe money (but on a normal European salary this is highly unlikely) as long as you bring yourself into compliance.

The results of the IRS realizing you're not in compliance are not pretty. Unlike the voluntary process, if they have to come after you for compliance, they usually go for the maximum amount of penalities which are calculated per year of missed filing AND per missed FBAR (if they're really nasty they have the option of fining you for each eligible bank account not reported each year instead of just a blanket fine for the missed fbar) and accrued interest, and that's not even touching the higher costs in fees for a increased tax accountant services and maybe even a tax lawyer.

I know someone who ignored it and thought it would never catch up to them. Well after 8 years it did, even though they didn't owe any actual taxes, the penalties, plus accrued interest from unpaid penalities was like $130k. It was an absolute nightmare to sort out.

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tomorrow509@reddit

Yep, not worth the risk if you're overseas long term. I know of a nightmare scenario where a dual Swiss national wasn't even aware of his U.S. tax filing obligation as he was raised in Switzerland but one day found all his finances frozen because he never filed a U.S. return and the IRS took action. Life isn't always fair but it beats the alternative. Mitigate risks when you can.

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WasabiMain9982@reddit

I would love to know more about this case because it is about Switzerland in particular

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tomorrow509@reddit

Apologies I cannot point you to the source. It's something I read online more than a decade ago. It was my motivation for getting current with my U.S. filings.

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WasabiMain9982@reddit

Hey is there a chance we can talk about this maybe on the phone? I am also in switzerland and what interests me is what motivated the IRS to contact that person. Was it out of the blue? Or was it that the bank realized he was a US citizen and wanted some sort of confirmation by the IRS that he is compliant?

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tomorrow509@reddit

I will DM you what I know and where to look for more info about this story.

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amenyves@reddit

Op said they were a broke student, probably making under 1000/month, for most of their time abroad, you really think spending 1-2k for filing back taxes (which amounts to a whopping 0$) is reasonable?

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L6b1@reddit

Yes, for the amount of paperwork and specialized knowledge involved. Professional services require and deserve professional prices.

What you think the accountant should work for free out of the goodness of their heart because OP didn't live up to the requirements to being an adult US person?

You have very unreasonable expectations.

I was in the same situation a few years back. I employed the services of a U.S. based tax accountancy who specialize in expat filings. They enrolled me in an amnesty program that required returns for the previous six years plus the current. I ended up owing no US tax nor were there any penalties. They were upfront about their costs. DM me if you would like to know the company I used.

Edit, quite a few people have DM'ed me and I think I have replied to all. Just remember if you want the referral discount, an email exchange is needed.

CheddarSupreme18@reddit

Would like to know the company as well. Thanks!

Character_Star_5053@reddit

Can you send the information please!

Can you please send the agency info I sent a DM

Plus-Bid-5116@reddit

I sent a DM can you please share the company name

Sent you a DM with info and link.

BonBonTo@reddit

Would you share the name of the company? Thanks!

Done. Check your DMs.

Sharchir@reddit

Would you recommend them? We have a new situation financially and don’t know if we should hire a company where we live specialized in both countries or have the taxes handled separately

I highly recommend them for sorting out your back filing issue. My situation was kind of complex as I worked across 3 countries over the years I needed to cover. I am retired now but still use them for my U.S. filings. For my local filings, I use a local agency.

Any_Marionberry9045@reddit

Sent you a dm asking for the name of the company

Check your messages.

Can you message me the name of company you used?

Done. Check your messages.

TemporaryLunch1070@reddit

Same please! Thank you!

WorkingOwn8919@reddit

is it too late to also request the company name?

Not at all. Check your messages.

polioflies@reddit

Same here please!

SeaminglyNordic@reddit

Me too please!

Recent-Appearance128@reddit

I would like the name as well, please!

Check you DMs for info.

iMegzz@reddit

Hi sorry same, could I know the name?

wannabepopchic@reddit

Could I get the name as well please? 🙏

Unhappy_Wrongdoer@reddit

Same please!

Done

FeeCreepy6330@reddit

Would love the name too; TIA 😀

SurroundOnly4159@reddit

Hii can u dm me the company please

vaultpepper@reddit

Hi, may I please have the name of the company? Thanks!

Horror-Ad2631@reddit

Hi can you message me the name of the company please? Thank you!

dima010@reddit

Could you please message me the name of the company?

Done, check your chat messages.

iiSanAndressLaw@reddit

Please could I get the name

Ok_Employer_978@reddit

Hello! Could you also please send me the name of the company too? Thanks in advance.

Done. Check your DM's

tonidani@reddit

Could you please please send me the name of the company too? Thanks in advance.

Majestic-Animal-9931@reddit

Hi could you message me who you used please?

Done. Check your DM's. Just sent you a link to a company that can help.

Sesumi@reddit

I'm in the same ship, you mind kicking the names my way as well mate?

Far_Ad_557@reddit

Can you send me the name and approximate cost?

Scary-Perspective397@reddit

Hi can you share the company name please

Longjumping_Room6391@reddit

I’d love the name!

103kmb@reddit

Hey, just read this now but if you could still share the contact details that would be great

Check your direct messages.

juicybelugacorn@reddit

Could you share it with me?? Thank you!!

Otherwise_Leek_7789@reddit

Please dm me 💜

Done. 💜

Minimum-Marzipan8388@reddit

Can you please send me the name of the company you used? Thank you!

Hi would you mind please sharing with me the details of the company you used as I am in a similar boat! Thanks.

Waste-Mastodon-1802@reddit

Hello, could you please share with me the name of the accountancy you used? I'm in a similar situation. Thanks a lot!

lozu@reddit

Hi, can you send to me too? Thank you!

yangerang33@reddit

Hi, I know this is 2 years later but would you mind sharing the company you used? Also in a similar boat right now.

tommy138@reddit

Haha I’m in the same boat, also sent a DM

TheSixFoot___@reddit

Did they answer?

Yes

Big_Acadia9640@reddit

Hi, if you're still out there please recommend the company. Thanks so much.

iAmSelfConscious@reddit

Hey can i get the name of the company as well please?

Done. Check your DM's.

theoneandonlyrae@reddit

Hello! Do you think you could message me too?

Done.

BoobyBrown@reddit

Would you mind DMing me with the name of the company you used for this too? 🫠

Medical_Cry183@reddit

Just DM’d you. Thanks :)

Lopsided-Ad-4080@reddit

Would you still need to file a tax return if your income is 0? Can you also please DM the company?

I'm no expert but I think you still need to file. How else will the IRS know you made zilch? I'll DM you but if you're not reporting income, you could probably just file the returns yourself. Best to get professional advice and that's why I'll DM you.

CowlRaven@reddit

Done. Check your chat messages.

MostlyMoneyYouTube@reddit

I've just sent you a DM to get the name of the company you use. Thanks.

Just replied. Hope it helps.

DogLover1353@reddit

Hi could you DM me the name please and their rates? Thank you!

DM'd you. For the rates, you need to check out their site. It all kind of depends on your situation but they are very upfront about it all and very reasonable.

MattzStyle@reddit

dm'ed you too :)

Gaynicorn2@reddit

Sent you a DM!

And I have replied. Good luck with it all. It's not that complicated and the peace of mind (for those worried) is well worth the effort.

Quicksilver5000@reddit

Hello! Could you junior dm me the name please! Thank you

Thank you so much!

2min2midnight@reddit

Hi, could you DM me the company you used? Thank you so much, you are a saint!

Correct_Ad7516@reddit

Could you DM me too pls? Thanks!

Zeek_Seeks_Gains@reddit

What if you’ve still been using American bank accounts the entire time, but make less than $20,000-30,000 a year?

I'm no tax expert but my understanding is any American required to file in the U.S., still has that obligation no matter where in the world they live. It's your birthright. /s

mimimimimichan@reddit

It's your birthright? Sounds more like unfair money grabbing from power hungry leaders to me especially considering other countries do not double tax their citizens living abroad... birthright my a**

Looks like you missed the /s at the end. Still I take your point and outrage. I presume from your reply you're a very wealthy American living abroad.

psychecyclops@reddit

can you DM me too please?

Kalhista@reddit

Could you PM me the company you used?

Competitive_Emu_4725@reddit

Can you please share the firms name? Thank you!

Sent you a DM.

Hi, could you also message me the firm name? I appreciate it!

bronwbears@reddit

I would also be interested in the company you used! I'm in a similar situation

Thanks!!

American-lady@reddit

Hi! Can you please message me the company used? Much appreciated. Thanks

k4ze7@reddit

hey, can you please message me the name of the company you used? thanks.

ambitiousjellyfish@reddit

Can you message me the name of company you used, please?

karbass@reddit

Please share!!

mikesaidyes@reddit

American in Korea. You have to back file the old years by hand, each year, mail them to the IRS address (one big ouch, each year in individual envelopes) in Austin for international, wait like a month or two or more. Then call and check if they’ve been accepted. Once they’re accepted you can do current UPCOMING year online. This is what I did myself.

mmxmlee@reddit

By back filing, do you just mean filling out documents? Or do you mean like send them proof of employment and salary earned?

I have lived and worked in Asia since 2012 and never filled taxes.

Miserable-Couple3987@reddit

OutrageousBig9213@reddit

Hi please message me the company u used. Thank u

Mrf411s@reddit (OP)

Just pm’d it to you!

ManyBeautiful9124@reddit

It’s no biggie. I use online company ExpatFile - they have a website where you enter your details and they estimate your tax return so you can see if you’re entitled to a rebate. I have two kids so I always get something. It more than covers their fee. I highly recommend. If you want to file multiple back returns then email them. If you haven’t recovered your stimulus payments they can get a rebate for you via your return. I’ve used them for the last 3 years. Good luck

braveheartcat@reddit

Was it expensive?

Not really. Their of a couple of hundred dollars is worth the refund you get. If you want they estimate your refund before you have to pay the fee

Thanks so much. I was having a lot of proctastinating due to anxiety over the unknown cost of getting it done (currently very poor 😅) so knowing that ahead of time helps me out a lot.

I’ve used them for three years and they always get me money back, whereas before when I filled on my own I never worked out how to get a rebate, so I’m using them from now on x good luck 🤞

Thanks again. Really looking forward to getting this done & dusted now. I just went on there for the first time and noticed they have a referral program where if you refer 3 people you get $120 and just thought I'd check back with you and see if you'd want to share me your referral code?

Forewarning, we're expecting a baby in a couple months so I honestly might not get around to it for a while yet until things settle down - but it may be worth sharing your referral here anyway in case anyone else stumbles on it in the future like I did 🕺☺️ x

Thanks for checking but don’t worry about it, I haven’t got another 2 people to refer, lol. Congrats on the baby xx

Jaded_Object5284@reddit

Why are you bothering now?

ItalyExpat@reddit

What you're looking for, and what others have hinted at without saying the name, is the IRS Streamlined Filing procedure. It allows you to catch up for the missing years for both your return and FBAR, if necessary.

Webinar explaining it: https://www.irsvideos.gov/business/FilingPayingTaxes/StreamlinedFilingComplianceProceduresAComplianceOptionForSomeTaxpayers

Remember that if you have had $10,000 cumulatively across one or more bank accounts outside the US, even if it's a bank account that you only have signatory rights for, you need to be filing an FBAR annually.

I'd also recommend avoiding the expat-focused tax services primarily because they are your most expensive option and for basic returns like this, you don't need that level of expertise. Reach out to an independent CPA in the State where you last resided and get a quote to have them take care of it. Depending on where you last lived, you may owe State tax as well.

MoonMist4747@reddit

How do they even police this? I have $10,000 CAD in my checking account in Canada. I have zero ties to the USA other than being stuck as a citizen because I can't afford to renunciate at this time. How the heck are they going to know if I just never mention my $10,000 CAD?

Because of FATCA. Your bank reports your foreign account annually to the Treasury dept.

I literally just learned about this bank account shit today. Guess I'll just never save for retirement so that I don't have to pay fucking US taxes on my retirement account. I had 11K in CAD in my account for like a week last year. Now what!?!?

File your FBAR, you're still in time.