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Bay Area Estate And Tax Planning Law Firm
Estate Planning
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Why are so many Americans living abroad frustrated with the IRS?

| Jul 27, 2020 | Estate Litigation |

Reportedly, about 70% of all Americans who live outside the United States have a problem with the country’s taxation scheme.

Bottom line: They don’t think they should be required to pay taxes at all.

There are approximately 9 million Americans residing abroad, so that stated discontent amounts to a sizable amount of grousing and condemnation aimed toward the IRS.

Candidly, the tax agency doesn’t much care. In fact, it doesn’t care a whit, being focused only with its mandate requiring most Americans to annually file tax returns based on worldwide income.

The massive amount of complaining coming from overseas links with the duty to file taxes even for many Americans who have but a single foreign account and arguably not much in it.

Moreover, filings often proceed in tandem with additional reporting duties (the Foreign Bank and Financial Account report – the often-referenced FBAR – is but one example) that filers find invasive and onerous.

Notwithstanding widespread expat discontent with the U.S. tax scheme, most affected individuals begrudgingly comply with all exactions in a timely and accurate way.

A small minority take their discontent to an extreme level, though. Reportedly, close to 3,000 Americans renounced their U.S. citizenship during the first quarter of this year. Respondents in a recent polling of expats collectively tossed considerable ire at the IRS, with about 20% stating that they “were seriously considering” surrendering their passports. Taxation burdens were frequently cited as catalysts for that motivation.

Many foreign filers fear that, despite good-faith reporting efforts, the IRS might still be targeting them for improper filings and even alleged efforts to unlawfully avoid tax payments.

Expat filers with questions or concerns might reasonably seek to consult with a proven estate planning attorney commanding an additionally relevant background as a certified public account and tax adviser.


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