# US tax filing for someone living in NZ



## thenoobies (Oct 7, 2021)

Hello everyone, recently I received a mail from ANZ my bank, asking for my IRD and IRS tin number. It was then I realised I had forgotten to file my tax for many years. Last time I filed my tax to IRS was on 2016. Considering the currency in NZ compared against USD, my tax to US is always 0. Now I am quite nervous really, I don't know what to do. I am afraid of penalty and how much would that be since I myself is struggling here let alone getting an accountant for me. The cost was around 200 USD which is almost 400 in NZD. I've never set foot on mainland America as well. Any ideas how can I fix this? Should I call IRS? Thank you.


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## Bevdeforges (Nov 16, 2007)

You've got a couple of options here. To get square with the IRS, should you wish to do so, there is this: Streamlined Filing Compliance Procedures | Internal Revenue Service
Basically, you file the current year plus three years back and (if required) 6 years of back FBARs, offer a simplified "excuse" (seriously - keep it really simple) and you're back in their good graces as long as those back filing show that you didn't owe anything (or not much).

The other option is to just let sleeping dogs lie. The information your bank asked you for is for their files and will never be submitted to the IRS. If your accounts with them are below certain limits (last I knew it was $50,000, but that could have changed) they probably won't even report the existence of your accounts. If you've never set foot in the US and have no intention of so doing in the near to mid term, this is the simplest and easiest approach. The Streamlined Compliance stuff can wait until you have some compelling reason to take advantage of some of the benefits of your US citizenship.

Frankly, if you owe nothing in taxes (or only very little, like a couple hundred $$ or so), they don't have the time, capability nor the interest in seeking you out. You're far from the only person living overseas who would be taking this approach.


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## DJr (Jan 6, 2022)

thenoobies said:


> I've never set foot on mainland America as well. Any ideas how can I fix this? Should I call IRS? Thank you.


What am I missing? you have never set foot and yet you have to report bank accounts and IRS...


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## Kingdragonfly (Apr 29, 2021)

First time I noticed this thread. Honestly I'm so sick of dealing the US government that I'm going to renounce my citizenship when I get stable.

Even a retired American, with no US job, and have zero US bank accounts, and no financials at all in the US, it's almost a certainty you should be filing a "Report of Foreign Bank & Financial Account (FBAR)" yearly.

From below: "*penalties for not filing FBARs are more stringent than those for not filing tax returns ... the lowest level penalty *(by pleading ignorance, and the Treasury believes you)* ... is $10,000 for each year that an FBAR wasn’t filed *"

This is not (directly) tied to the IRS, but rather the Treasury Department Financial Crimes division. The USA is the *only* country in the world that requires you to do this. Not even China is this invasive.

Nearly every country and financial institutes in the world, including New Zealand, and all NZ banks, has treaties allow the IRS / Treasury Department directly attach (take) your assets (money) without any prior warning.

I indirectly knew someone who fell afoul of the IRS / Treasury, and the first time they were aware they were in trouble was when they showed up at any ATM, and couldn't withdraw any money.

And you're guilty until proven innocent.

Luckily, and strangely for the US government, it's on-line and free.

From FBAR Penalties Explained

Any American with one or more foreign financial (such as bank, brokerage or pension) accounts that have an total balance of over $10,000 in them at any time during the tax year, or anyone with control over such an account or accounts (for example as a signatory), is required to file an FBAR.

FinCEN Form 114 should be filed each year that a person qualifies. Note that the $10,000 minimum is per person, not per account, so someone with ten offshore financial accounts each containing $1,001 dollars at the same time at any time in a year would exceed the threshold and so have to report all of their foreign accounts on an FBAR.

*When is the FBAR filing deadline?*

Prior to 2016, the FBAR filing due date was June 30th of the following year. However since 2016, the FBAR filing date has been aligned with federal income tax return filing dates, so April 15th of the year following the tax year, however an automatic extension is granted until October 15th, making this the true FBAR filing date.

*What are the penalties for not filing an FBAR?*

As FBARs are filed to FinCEN rather than to the IRS, penalties for not filing FBARs are more stringent than those for not filing tax returns. There are several levels of penalties, depending on whether the IRS (which has the delegated authority to enforce FBAR violations) considers that failure to file was willful or non-willful.

The lowest level penalty for non-willful failure to file is $10,000 for each year that an FBAR wasn’t filed. If the IRS deems that failure to file was willful on the other hand, the penalty is $100,000 or 50% of the balance of the account at the time of the violation. A possible prison sentence may also apply. The penalties are the same for knowingly and willfully filing a false FBAR.

For many years, the IRS has applied FBAR penalties per unreported account per year, so someone with three foreign financial accounts who non-willfully missed filing FBARs for three years would be fined $90,000. However, some recent lawsuits have upheld the idea that the penalty should be applied per year only, so in the same situation the total would be $30,000.
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