GoKunming Forums

expats paying taxes....

AlexKMG (2361 posts) • 0

Pretty sure the IRS does and prefers going after the small fry. If you have been getting away not filing returns while in China as a US citizen, then suggest you don't ever file again, as your audit risk will be astronomical on the next return you file. However, if you didn't file but owed no taxes, there won't be any penalities. If you did have tax due, back tax penalty rates pile up at an avg of 150% plus monthly compounding. It can become very expensive as Geezer mentioned. And yes, this tax policy is pretty nonstandard and ridiculous, but won't change the fact it exists and is law and will remain so for the foreseeable future.

Xiefei (532 posts) • 0

OP, Geezer is right about the need to file and the forms.

Even if you don't get audited and fined, failing to file can come back to bite you down the road. Want to get a green card for a foreign spouse? Let's just take a look at the last five years of your tax record. Want to come home in a few years with a nice chunk of cash? Audited.

Besides, you probably won't owe any tax anyway.

AlPage48 (1252 posts) • 0

The US government does not care about your plans. If you are a citizen you are expected to pay. Period.
There are people born in Canada who have dual citizenship simply because one of their parents was an American. They have never worked or even lived in the USA, yet the American government now expects them to pay taxes to the US government.
Many of those people are now renouncing their American citizenship.

Xiefei (532 posts) • 0

@goldie: It's ultimately your decision, but if you really don't want to file, you may want to look into renouncing. The US government is using strong arm tactics to force banks around the world to report on the transactions and holdings of US citizens. They basically have the power to go after your money wherever you put it.

There's also a new law, which hasn't been tested yet, that gives them the power to revoke your passport if you owe more than $50,000 to the IRS.

Think that's a big number? If you fail to file the Fincen disclosure forms (aka FBAR) to disclose overseas holdings, they can fine you a percentage of your balance for each year you fail to file. A couple years of missed filings can easily lead to fines beyond your total net worth.

A few people have also said that the IRS is only after big fish. I have no idea where they got that. They have a series of analytics they run through a random selection of returns to trigger an audit. They've been falling behind recently because of funding issues, but if you end up in that pile, they'll go after you even for a few hundred bucks.

Haali (1176 posts) • 0

you 'could care less' - so you care somewhat? At least get the phrase right if you are going to use it.

goldie122 (645 posts) • 0

Thanks Haali... I didn't know you were the English police on the forums. My mistake. I should have said, I couldn't care less. But since you brought it up, your last post had some grammatical error...

"Anybody know any good spots to see blossom in the city? I was thinking of trying Daguan park, do they have blossom there?"

Your last sentence is not quite right.

Xiefei... how can the US go after or even know about my bank accounts in China?

bucko (689 posts) • 0

Alien's suggestion is very wrong and I don't recommend you follow his logic.

You should file every year. You are not taxed on income you earn here unless it exceeds $150,000 per year. Higher if married.

If you have plans to return toi the US, you will be in a lot more trouble explaining why you did not file tax returns while living abroad, most likely incurring penalties once back in the US. It is not worth the hassle screwing with the IRS.

You are required to file taxes where ever you live every year if you are an American citizen, period.

I file $0 every year, along with my expat declaration form. Costs me 30 minutes a year to do it. No big deal.

Xiefei (532 posts) • 0


"Xiefei... how can the US go after or even know about my bank accounts in China?"

In recent years the US has gotten a lot of Swiss and offshore banks, which once made secrecy the focus of their business model, to disclose records tied to US citizens. They did this by threatening to freeze a portion of any money these banks had in the US if they didn't comply.

Recently, the US has been setting up similar deals country by country. China signed on in 2014, apparently motivated by the promise that US banks would share the same information on Chinese account holders.

The Chinese banks don't seem to have responded yet, but sooner or later, they just might send all our files to Uncle Sam.

There are other ways for them to find out as well, especially if you're sending or receiving money between said account and one in the US.

The fine for failing to do the FBAR (FinCen) filing is a large percentage of the account balance for each year you failed to file. If you let it slip a few years, it can easily grow to multiple times your net worth.

AlPage48 (1252 posts) • 0

@goldie, you asked
"Xiefei... how can the US go after or even know about my bank accounts in China?"
To add to his very complete answer, remember also that we foreigners have our passport ids attached to our bank accounts. It's a pretty simple task to strip out all the American accounts into a computer file to send to the IRS.

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