Do you have a Green Card or an expired Green Card? You’re considered a US person for tax purposes. Even when you now live and/or work outside of the United States of America. This may put a huge burden on people living abroad. They are faced with a double tax liability with additional costs, considerations and administrative burden.
You have to file taxes. The US has a different tax system than most countries in the world. The tax system, CBT (Citizen Based Taxation), is a tax system based on citizenship, not on residentship. Whether filing will result in you paying actual taxes in the US depends on personal circumstances, and double taxation treaties made with the country in which you live and or work. Not filing taxes in the US is a criminal offense.
If your green card expires, you are still required to pay taxes in the United States. This obligation stops when you turn in your Green Card and file your exit tax return with the IRS.
If you fail to file a return, FBAR or pay taxes owed, you may be subject to penalties and interest. Additionally, the IRS may flag your account and initiate collection proceedings.
It is therefore imperative that you remain compliant with your US tax obligations, even if your green card has expired.
We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother. When we heard about this for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?).
It is (unfortunately) true that there is an additional American tax levy. But there’s no information from local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.
That’s why we started this initiative to help people from all over the world by providing proper information to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations. If you have more questions about your Green Card and the US tax obligation you can contact us at Americans Overseas.