Comment by sethx | Hacker News Reader

Comment by sethx | Hacker News Reader

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I am a US citizen, and was born abroad, and live in the EU. I've never lived in the US, nor worked there for a single day of my life. As such, I've never filed income in the states. I never got asked to do so, either. Due to IRS regulation i currently am in tax noncompliance and on the potential hook for what i guess something like 200K in penalties. I work in IT and my dream is to work in the bay area eventually, but I do not see the point of spending ~2k in paperwork to go through the "streamlined procedure" to bring myself into compliance, and then to be liable to report all my income a lifelong and potentially pay taxes in the US as well as i make more than 100k gross/yr. I don't want to move to the US forever, but maybe a few months here and there would be nice. The opportunity cost of doing that is astronomical, though, if i factor in a lifetime of added accounting costs and additional taxes, just for a few months of time spent in an area. Is there anything I can do to make this happen, but not have to hemorrage money? How can i legally work in the US without having to oblige myself to a lifetime of IRS bullshit? I already pay 52% taxes in my country of residence. Any non-US resident who was born abroad is pretty much in my same boat.

Have you looked into Foreign Earned Income Exclusion?

https://www.irs.gov/individuals/international-taxpayers/fore...

"If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($92,900 for 2011, $95,100 for 2012, $97,600 for 2013, $99,200 for 2014 and $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts."

Are you sure about your noncompliance status?

IANAL, but aren't there treaties between the US and all EU countries that avoid any double taxation? You have to pay income tax wherever you live most of the time and conduct your business. You never have to pay income tax twice, in two countries. Unless you obtain your income mainly in the US, you should be exempt from paying US taxes. This is independent of citizenship.

Sorry if I'm missing something, I thought (and have been told) that this is how it works, so I'd be happy if someone else with more knowledge could clarify this.

The noncompliance is not about taxation, its about not reporting income. Every year carries a penalty of 10k. All of this can be reset to 0 by bringing myself into compliance and then it will be pardoned, but from that point on i must comply every year. For now i have a "void all your debt card" which i'd rather keep in my sleeve until i really need it.

I believe you're right about tax treaties.

However I suspect that in the case of a US citizen, that doesn't mean you don't have to officially declare your tax status/income to the IRS each year. Hence the parents worry that he's going to have to trawl back over his entire working life to 'prove' that he doesn't owe any back taxes.

IANAL, but am from the UK, lived in the US for a few years and have had to deal with moving back and forth.

If you are making 100k+ a year, why aren't you willing to cough up 2k to get some sound tax advice and realize your "dream?" You may be covered by a tax treaty and owe nothing. It's just paperwork.

A lifetime of paperwork. Thanks, but no thanks.

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