IRS Proclaims New Tax Filing Obligations for Specific Expatriated Individuals

Just because you give up your U.S. citizenship doesn’t mean that you get out owing Uncle Sam.

In an effort to get some former citizens to make good on their tax debts, the IRS has introduced a new program to certain former citizens to get relief for their tax debts around Arizona and to come into compliance.

Criteria for Qualification

With the new Relief Procedures for Certain Former Citizens, the IRS will allow those who meet specific criteria to be relieved of the taxes they owe.

To qualify for this program, individuals must have relinquished their citizenship after March 18, 2010, and they cannot have net assets of $2 million or more. They must also owe less than $25,000 in taxes for the six years for which relief is sought, and the debt must not be the result of willful evasion. In other words, individuals can seek relief if they owe the money because of a misunderstanding, not because they were willfully trying to avoid paying their taxes. In many cases, these are individuals who lived in another country for a long time, and they did not know that they were still obligated to file tax returns in the United States.

Only individuals are eligible to file for this tax relief. Corporations and partnerships cannot get this relief, nor can entities like estates or trusts.

Filing for Tax Relief

In order to get tax relief, former U.S. citizens must first file their outstanding tax returns for the previous five years, plus the year that they gave up their citizenship. They must include all the required schedules and other forms with the return.

Should the relief be granted, the person will not owe the tax for those six years, and no penalties or interest will be levied.

No termination date has been announced for this program, which means it will go on indefinitely until otherwise announced. The IRS has said that it will announce a closing date with notice if (or when) the program is to end.

Additional Information

The IRS is trying to help expatriates learn about their tax obligations and how they might be able to qualify for this relief. The agency announced that it plans to host a webinar online to provide information about the process and to offer practical tips about how to apply for relief.

Individuals can also find information on the IRS website, including a Frequently Asked Questions section, and they can call the IRS to speak to a representative.

However, the best thing that you can do to understand your legal obligations and rights is to talk to a tax attorney. The tax code is complicated, and it can be hard to understand what you need to do, even if you are looking at the information the IRS provides and you talk to a representative. The IRS isn’t going to take the time to walk you through all the complexities of your case, and the agents are not responsible for helping you file your taxes or amending your returns. Only an Arizona’s dedicated tax attorney will take the time you need to explain every nuance and every rule that applies to your case, as well as helping you understand what steps to take to minimize your liability and minimize your tax debts.

The tax attorneys at Silver Law PLC are ready to help you if you need to file for tax relief as an expatriate. We can help you understand how the new rules apply to you, and we can put together your application for relief if you qualify. By working with one of our tax lawyers, you will increase your chances of successfully filing for relief. Our attorneys help clients with a variety of issues, including foreign tax reporting, innocent spouse relief, tax audits, amended returns, and civil and criminal tax complaints. Our attorneys have all worked for the IRS, so they have unique insights that they can use to help you. Call us in Arizona today to talk with a tax lawyer about your case.

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