Job Discussion Forums

Glenski · Joined: 15 Jan 2003 Posts: 12844 Location: Hokkaido, JAPAN

ted has it right. No double taxes unless you make over a certain amount (which changes every year and is around the figure he cited now). And, if you make more than that as an EFL teacher, please show us the way!

Sgt Killjoy · Joined: 26 Jun 2004 Posts: 438

and some countries have a tax treaties with the US so that if you pay taxes in one country, you can claim it as a credit on your US taxes. That of course only applies if you are making above the exclusion limit.

Gregor · Joined: 06 Jan 2005 Posts: 842 Location: Jakarta, Indonesia

Well, this brings up a question I have regarding taxes.
We're planning on returning to China, so we're not going to live here after all, but my wife wants me to get current and do the back-filing and square myself with the IRS, just the same (she likes to cover all bases, bless her).
But what should I do? I quit filing income taxes way back in 1986 ('85 was my last year). Never had any problem with it. Then I left the country in 1991. Stayed away for a while, came back and moved around a lot and in 1997 I left again, that time for good (until the couple months I've been back but as I've said, I'm returning to China next week, so whatever).
I have no forms of any sort for that entire 20-year period. I can't prove that I made any amount of money in all that time. Jobs I had in America had taxes taken out, and I never kept pay stubs. Jobs I've had abroad, I have no idea. I am completely clueless about taxes in any place (I've been married since 2003, so it's possible that my wife has kept me square with the Chinese government - we DID buy a home there, after all).

While I suspect that I have just dug a hole for myself which I cannot get out of, I find it hard to believe that I'd be the only one in such a predicament (not TOO bad - I COULD just stay away from the US).

What's amazing here is that when I got back, I opened a bank account in my and my wife's names, and we got driver licenses. But no one from the IRS has contacted me. I've just been sitting here in the same place (marked on the license) for six or seven months now, and still, nothing. Is it because I live in a ranch house with a bunker in rural Oregon (true, BTW!)?
What can I do to square things? I'm sure there's no way I'd owe money for any of that period, but I'd have no way to prove that. Suggestions? I'm tempted to just go throw myself at the mercy of the IRS and serve whatever jail time I need to serve and call myself square from then on...

jr1965 · Joined: 09 Jul 2004 Posts: 175

Gregor,

I suspect that you'll be fine--unless you have quite a bit of $$$ in a US bank account but haven't paid taxes in a while. THAT would send up a red flag for the IRS, and you can bet that eventually, they would contact you.

If you've been out of the country and making money abroad, but not enough annually that the IRS could expect you pay domestic (US) taxes, then don't sweat it. You haven't done anything wrong. A lot of people don't realize they have to file from abroad, even if they're not making over $75,000. If you want to get all in order, contact an accountant; he or she can probably even do the paperwork for you.

DainaJ · Joined: 26 Jul 2006 Posts: 62

DainaJ · Joined: 26 Jul 2006 Posts: 62

I looked up more information. Here are some sites for info.

Expatriation Tax (for people who want to terminate their US residency for fed. tax purposes):
http://www.irs.gov/businesses/small/international/article/0,,id=97245,00.html

What to do if you didn't file
http://www.irs.gov/businesses/small/article/0,,id=108327,00.html

At least this is slightly encouraging:
http://www.irs.gov/businesses/small/article/0,,id=122721,00.html#5

Will I Go to Jail?

A long-standing practice of the IRS has been not to recommend criminal prosecution of individuals for failure to file tax returns, provided they voluntarily file, or make arrangements to file, before being notified they are under criminal investigation. The taxpayer must make an honest effort to file a correct return and have income from legal sources. A letter from the IRS concerning taxes is not a notice that a taxpayer is under criminal investigation.

The IRS helps to get people back into the system as part of its long-term plan to improve voluntary tax compliance. The IRS wants to get people back into the system, not prosecute ordinary people who made a mistake. However, flagrant cases involving criminal violations of tax laws will continue to be investigated.

Sgt Killjoy · Joined: 26 Jun 2004 Posts: 438

If the IRS decides to audit you then you can not claim the foreign income exclusion.

I would suggest visiting your local irs office for tax forms for 2005, 2004, 2003. 2006 won't be out before the first of the year. Anymore than 3 years back is not a problem, really.