The $105k-ish number is just the amount of foreign income that is exempted (hence, upon which one would owe no taxes). Technically, anyone subject to US tax law is supposed to file a return every year, even if no tax is owed and no refund due. I could easily see IRS going after someone living abroad who had committed no real crime other than not filing a return.
Re:Tax Protester FAQ
by yellow_postit on Wednesday November 04, 2020 @06:51PM
(#24994310)
And can’t forget about filing the FBAR to the Treasury Department.
That, too, of course. There's a reason every time I've seen an American abroad ask a question about filing taxes that the answer is literally always "You need to find yourself a specialist accountant to help you with this."
One reason for that global reporting req is to account for capital gains in domestic trading accounts, or other transfers of property. This is not unique to the US, but other countries don't necessarily piggy-back this in your standard income tax filing.
There are provisions to prevent double-taxing beyond the foreign income threshold because of treaties between the US and other countries. I'd speak to a professional at least the first time you file internationally.
What is unique to the USA is: charging citizens tax on money they earn when they live overseas and forcing overseas banks to hand over details, in some cases of non USA citizens, to USA IRS
Re:Tax Protester FAQ
by kingosticks on Thursday November 05, 2020 @08:21AM
(#24997978)
To be a bit more specific, it's charging citizens tax on money they earn from overseas when they live overseas i.e. nothing to do with the US at all. Your comment could be interpreted to mean just taxing income from US investments while living abroad, for example (which would be more reasonable, but still over-reaching). Taxing worldwide income is also done by a few other countries but only the IRS has the bizarre extra reach into overseas banking data (that I know of, at least).
Sorry mate.
That may be strictly true. But you must file tax returns. I met a women here in Aotearoa who had not stepped foot in the USA for thirty years and never thought about the taxes.
Facing extradition or loosing every single thing she owns. Or both.
Re:Tax Protester FAQ
by kingosticks on Wednesday November 04, 2020 @07:05PM
(#24994395)
How you use the exclusion (and the credit, if necessary) isn't the point. The point is protesting the idea of of being subject to US tax when you do not have any US income.
[1] https://www.irs.gov/individuals/international-taxpayers/fore...
[2] https://www.irs.gov/businesses/small-businesses-self-employe...
[3] https://travel.state.gov/content/travel/en/News/passports/pa...