
CNBC reports that the US Congress will be handing the Internal Revenue Service (IRS) $79,6 billion through the Inflation Reduction Act — not only for tech modernization but also for more tax enforcement. What does that mean for American taxpayers living overseas?
As of July 29, the IRS had a backlog of 10.2 million unprocessed individual returns. Taxpayers were trapped in this outdated, paper-based system because Congress has systemically underinvested in the IRS.
That $79,6 billion is more than six times the current annual IRS budget of $12.6 billion. Treasury and IRS officials say they expect this funding will allow them to automate more of this process so that returns can move through more swiftly.
The bill also states that a whopping $45.6 billion will be for tax enforcement, and make no mistake, enforcement is the main directive from Democrats to the IRS.
The goal is to make the IRS tougher and faster at collecting and making you pay. 87,000 IRS agents will be hired, an army to amplify tax-enforcement efforts and catch up on tax returns.
A Congressional Budget Office (CBO) analysis predicts that the hiring of all those agents would result in more than $200 billion in tax dollars taken from Americans over the next decade. And further analysis indicates that money would come from IRS audits against families making less than $200,000 a year.
What does this mean for the American living outside the U.S.? That your tax return, if you file on paper or answer a letter from the IRS, will soon be processed faster. This is advantageous, for example, for receiving refunds or confirmations as a result of your tax return.
Contact Americans Overseas for more information on the current withholding arrangements offered by the IRS. These kickback repentance schemes have so far had the rule that one can file penalty-free returns with a limited number of years in the past. It is not clear when these schemes will end, however, it does sometimes give the opportunity to still receive Economic Impact Payment.
Get well-informed. In the Americans Overseas knowledge center, you’ll find lots of objective information about applying for an SSN and tax liability.
It also contains information on several repentance schemes, including the Streamlined Procedure, which allows you to return to the tax system penalty-free.
Do you have more questions about the IRS tax enforcement bill? Contact Americans Overseas, and we’ll be happy to help, with no obligation and no cost.
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Understanding the US tax system, the obligations, and all the additional terms can be difficult. Especially if one lives outside of America. Is your question not answered? Contact us.
U.S. citizens and resident aliens who live abroad are generally required to file a federal income tax return and pay taxes on their worldwide income.
Read more... about Who is required to file taxes in the US?Yes, US citizens are required to file taxes on their worldwide income, regardless of where they are living.
Read more... about Do US citizens living abroad still have to file taxes in the US?Received an American check? You can cash your check in the following ways: cash the check at your own bank, transfer to another person (endorsement), cash checks using an online service or cash the check by another bank.
Read more... about How can I cash my US check?US citizens living abroad may be required to file Form 2555 and/or Form 1116 to claim the foreign-earned income exclusion.
Read more... about Are there any special tax forms required for US citizens living abroad?FBAR (Foreign Bank Account Report) filing is the requirement for certain U.S. individuals and entities to report their foreign financial accounts to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury. The FBAR filing requirement applies to U.S. persons who have a financial interest in, or signature authority over, one or more foreign financial accounts if the aggregate value of those accounts exceeds $10,000 at any time during the calendar year.
Read more... about What is FBAR filing?