Owe Back Taxes? Lose Your Passport
BY Ben Steverman
March 30, 2016 7:00 AM EDT
Updated on March 30, 2016 11:00 AM EDT
The roughly 8 million Americans who live abroad automatically get a couple additional months each year to file their taxes. Dont expect them to be grateful.
Filing to the Internal Revenue Service from overseas is more confusing, complicated, and expensive than it is for Americans at home (and that's saying something). Unlike almost every other country in the world, the U.S. demands its citizens pay taxes on all foreign income. They must file even if they have lived and worked abroad for decades, and even if theyre already paying hefty taxes to the countries where they reside.
Now it's getting worse. In an effort to fight tax evasion, the IRS recently began forcing expatriates to report not just their income, but additional information on savings and investmentsrules that have made it harder to open bank and brokerage accounts overseas. More ominously, the IRS and the State Department are also implementing a provision approved by Congress in December that could revoke the passports of Americans who owe too muchraising the prospect of being stranded abroad on account of poor arithmetic.
A lot of people are very, very angry about the whole situation, said David McKeegan, co-founder of Greenback Expat Tax Services, which specializes in U.S. international tax preparation. For Americans abroad, he said, Its very easy to feel like youre a criminal [for] doing normal things.
Here are several of the biggest problems U.S. citizens face:
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http://www.bloomberg.com/news/articles/2016-03-30/owe-back-taxes-lose-your-passport