# Late tax returns for expats



## 1786834 (6 mo ago)

Has anyone had much experience with late tax returns? (As in 10-12 years ago). Lived abroad in UK a few years and didn’t know how to submit a tax return back then. Young and stupid I was. Have kept putting it off and now I want to get it sorted but don’t have any of the documents needed. 😩


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## Harry Moles (11 mo ago)

Are you a US citizen? If so, there's no point try to clean up missing returns from that far into the past. The IRS has long since lost interest.


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## 255 (Sep 8, 2018)

@Cassablanca -- Yes, I have a friend that hadn't filed income taxes in over 20 years. She talked to an attorney, and his advice was to file the last 7 years. She prepared all 7 and mailed them separately, about two weeks apart and she never heard a thing from the IRS (she didn't actually "owe" any tax for those 7 years.) She became compliant after that and still hasn't had any issues nearly another two decades later.

The other method, I've seen used is the "streamlined" method: Streamlined Filing Compliance Procedures | Internal Revenue Service . I have read of people using this method, although I don't know anyone personally that has used it. I'm pretty sure this method only requires you to go back 3 years (for both tax returns and the FBAR.) Like my friend, I doubt you'll actually owe anything (unless you are a very high earner.) The F.E.I.E. or the FTC should eliminate you owing in most cases (the exclusion limit is over $100K USD.) Cheers, 255


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## Bevdeforges (Nov 16, 2007)

The US statute of limitations on income taxes is only something like 4 years - though technically, any income not declared doesn't fall under the statute of limitations limit if and when they find out about it. But it would have to be a majorly huge amount of income and/or tax due on said income to draw any sort of attention from the IRS. 

Figure, too, I just recently saw a newspaper article saying that there are still something like 5 or 10 million paper returns from 2020 waiting to be processed in the bowels of the IRS somewhere.


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## Moulard (Feb 3, 2017)

Personally, if you are actually planning to come into and stay in compliance then the streamlined process is, possibly, the better route to take. If memory serves correct, 20 years ago, the compliance process was quite different (not sure if it was the OVDP or a predecessor) and far more punitive that the streamlined process is today and at the time quiet compliance was better than sticking your head up above the parapet.

With streamlined, I understand the most common route to take is to file the current year per normal filing processes, and then prepare the streamline submission of past returns and post it and related documentation to a mailbox (can't go the streamline route). 

Oh.. and for delinquent FBAR I am pretty sure it is 6 years not 3 - but if you maintain local tax records, then you probably have the bank statements etc filed away somewhere that can assist with the filing... many people just make up numbers that are "rounded up" if they do not.


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## 1786834 (6 mo ago)

Harry Moles said:


> Are you a US citizen? If so, there's no point try to clean up missing returns from that far into the past. The IRS has long since lost interest.


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## 1786834 (6 mo ago)

Harry Moles said:


> Are you a US citizen? If so, there's no point try to clean up missing returns from that far into the past. The IRS has long since lost interest.


No

No Aussie. Did my Aussie tax returns but not returns in the uk and unsure how to


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## Bevdeforges (Nov 16, 2007)

Oops, sorry Cassablanca - I initially thought that you might be referring to UK returns, but with everyone answering about US returns figured I'd missed something. Honestly, if no one has contacted you about taxes from 10 or 12 years ago, I'd let sleeping dogs lie. Plus, depending on what sort of income you had back then, you may have been covered by the UK PAYE (Pay As You Earn) program where they just withhold the taxes and you often don't have to file anything.


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## 1786834 (6 mo ago)

Bevdeforges said:


> Oops, sorry Cassablanca - I initially thought that you might be referring to UK returns, but with everyone answering about US returns figured I'd missed something. Honestly, if no one has contacted you about taxes from 10 or 12 years ago, I'd let sleeping dogs lie. Plus, depending on what sort of income you had back then, you may have been covered by the UK PAYE (Pay As You Earn) program where they just withhold the taxes and you often don't have to file anything.



Yes I am referring to my UK tax returns. But I am an Aussie. Just a bit confused. Does each country have a separate return? As in do I need to declare the money I would have earned in Uk on my return in Australia?


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## MyExpatTaxes (10 mo ago)

Cassablanca said:


> Has anyone had much experience with late tax returns? (As in 10-12 years ago). Lived abroad in UK a few years and didn’t know how to submit a tax return back then. Young and stupid I was. Have kept putting it off and now I want to get it sorted but don’t have any of the documents needed. 😩


I'd recommend the IRS Streamlined Tax Amnesty program for you, it's the cheapest, easiest, and safest way to catch up with the IRS. 😊


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## Bevdeforges (Nov 16, 2007)

Cassablanca said:


> Yes I am referring to my UK tax returns. But I am an Aussie. Just a bit confused. Does each country have a separate return? As in do I need to declare the money I would have earned in Uk on my return in Australia?


Normally, you pay income taxes to the country in which you are resident. And for that country you need to declare your "worldwide income." There are a few countries that insist on taxing all their citizens as "tax resident" even when living and working abroad. (Actually the only two seem to be the US and Eritrea.) 

The UK rules regarding "tax residence" are kind of complex, though. Officially, you are supposed to declare your departure from the UK to the tax authorities - at least if you're a UK citizen - and then there are two (or maybe more) different categories you may fall into. 

For the year you return to Australia, I suspect you are expected to declare your UK earnings during the tax year, though there may be a form of "part-year" return for situations like that. But this far after the fact, I wouldn't worry about the UK coming after you.


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## Harry Moles (11 mo ago)

MyExpatTaxes said:


> I'd recommend the IRS Streamlined Tax Amnesty program for you, it's the cheapest, easiest, and safest way to catch up with the IRS. 😊


Nice try, but the OP is an Australian talking about UK tax returns.

Admittedly everyone else thought US citizen because they didn't actually make it clear what they were asking about.


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## Moulard (Feb 3, 2017)

Cassablanca said:


> No Aussie.


Do you have a self-managed super fund? If the answer to that is yes, then you are probably going to want to seek out good professional advise before either quiet compliance or streamlined on a US return. US treatment of Foreign Grantor Trusts is rather toxic and will likely result in a US tax liability for growth in the trust


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## Harry Moles (11 mo ago)

Moulard said:


> Do you have a self-managed super fund? If the answer to that is yes, then you are probably going to want to seek out good professional advise before either quiet compliance or streamlined on a US return. US treatment of Foreign Grantor Trusts is rather toxic and will likely result in a US tax liability for growth in the trust


Everyone is convinced that the OP is American. Apparently, they are not a US citizen.


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## Moulard (Feb 3, 2017)

Yes. I misread the post where they eventually stated they were referring to UK tax returns. Normally it is only US persons who worry about tax returns of that age... so a Pavlovian response so to speak to read into it what was not written.

So with that clarity...

Simply living and working in the UK for "a few years" may not necessarily have made the OP a tax resident of the UK.

Its likely that under the Article 4 tie breaker rules the OP would have remained a resident of Australia if their "Permanent Home" remained in Australia

In which case what should have happened is that they reported their UK income to the HMRC and their global income to the ATO and claimed a foreign tax offset for UK income taxes paid on UK sourced income.

I would presume that income tax withholding happened on UK wages, and thus income tax has been paid (as withholding tends to be at a rate that will meet the tax obligation) and all that is outstanding is the tax return.

I have no idea what it might mean to go about filing a UK return a decade after the fact.


On the ATO side, as far as I am aware they only ever look back 4 years when auditing and a tax payer can only amend a return in most circumstances within 2 years... so on that side I would probably suggest letting the matter slide.


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