You may remember that, roughly six months ago, the IRS announced its intention to terminate the Offshore Voluntary Disclosure Program (OVDP). The Offshore Voluntary Disclosure Program originally launched in 2009, and since then 56,000+ taxpayers used the program to comply with tax laws. September 28, 2018, is the closure date for this amnesty program, which is now only three weeks away! Find out what expats need to do to prepare.
#1: Understand Whether or Not You Are Compliant
Americans must file Federal Tax Returns annually no matter where they reside. Even if you have lived outside of the country for many years, but have not renounced your citizenship, you will need to file tax returns annually. This includes disclosing your foreign assets, foreign accounts, or overseas investments to the IRS. If you are compliant – that’s great! No need to do anything. If not, or if you know someone who’s not, you’ll need to proceed to step #2.
#2: Determine If Your Non-Compliance is Willful or Not
If you are not compliant, is it because you were hiding money in an offshore account to evade paying taxes? This happens rarely, but if you are willfully avoiding tax compliance, you need to use the OVDP as soon as possible! We recommend speaking with your attorney to prevent any legal surprises and ensure that the OVDP is the best route for you. But hurry! The Offshore Voluntary Disclosure Program is closing September 28, 2018.
If you’re non-compliant because you weren’t aware of the filing requirement, you can use the Streamlined Filing Compliance Procedures or “Streamlined Filing” (for short) to become compliant penalty-free. This is often the best option for expats who are years behind on their taxes. However, even if you’re in this situation, you’re going to want to take quick action. The IRS is lenient toward those who come forward voluntarily, but if they notice your non-compliance before you have taken action, they are much less sympathetic.
#3: Get Caught up on Your Expat Taxes
Whether you attempt your expat taxes on your own or hire a professional, become compliant as soon as you can. Once compliant, it is much easier to stay compliant in the future! Don’t forget to check for the thresholds for additional filing responsibilities such as FBAR or FATCA; or, if you’re self-employed, other forms and filing requirements may apply.
Have Questions About Becoming Compliant With Your Taxes?
Contact Greenback today, and we’ll help you find the information you need.