# FR resident, US dual citizen tax declaration



## SPGW

Born in USA, has lived his adult life in FR, has never had any communication from US IRS and is wondering what to do about the US tax declaration obligation? He has a US SS number but not a Taxpayer Identfication Number (from what he has found on line you need a TIN to make any progress). If the years go by and he does nothing, what are the consequences? Should he pro-actively contact a bureau who deals with overseas residents?
Any advice welcome!


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## Bevdeforges

OK - first things first. A US SS number IS a Taxpayer Identification Number. There are a couple of numbers that can be used for non-citizens who don't have a US SS.

But basically, your friend is well off the IRS radar and can simply continue to do and he has been doing all these years. The IRS rarely, if ever, contacts US citizens overseas - unless perhaps they have become notorious for their wealth or professional status (case in point: Boris). 

I take it that he doesn't travel back and forth to the US - because that could be a problem for him if he doesn't have a US passport. But only if the Immigration official (or the airline) notices the US birthplace - which they often don't do. But even then, communications between US government departments is pretty non-existent and it's unlikely the IRS would get involved.


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## SPGW

Perfect. Thanks Bev. He does have a US passport btw, and has been back a couple of times in the last 25 years.


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## Harry Moles

As a general rule, your friend should keep on doing what he's not been doing - staying out of the US tax system.

The only good reasons for him to begin filing are to collect the $3,200 stimulus payment, if that's still possible and he's desperate for the cash, or if he's expecting a possible inheritance with US assets. Otherwise leave it alone.

I assume that French banks are aware of his US citizenship (due to place of birth on his ID) - if not, they will be eventually. When that happens he may be subject to FATCA reporting and possible restrictions on what type of investment products are offered to him.

One last but important thing. I assume that your friend is a French citizen? If he does not have dual citizenship, there are some ways in which the US government could hurt him if it ever found him and decided that he owed it a lot of money. The odds of this happening are low, but it's theoretically possible.


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## SPGW

Thanks for the additional points - yes he’s also a French National, and it was the French bank knowing his US birthplace that triggered the question. It looks like having a US SS number is enough to confirm he is « in the system » as far as FATCA goes.
One other consideration is, if he was ever to go and live/ work in the US, would there be any issue with never having filed in the US? In theory we suppose the IRS would have access (if needed) to his French filing history through the tax agreements between Fr and US, and if all is in order, there shouldn’t be a problem.


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## Bevdeforges

SPGW said:


> if he was ever to go and live/ work in the US, would there be any issue with never having filed in the US?


Oh yes, very definitely. I was assuming he was at or near retirement age. But if he might consider returning to the US to live, he'll need to make amends on his filing situation.


SPGW said:


> In theory we suppose the IRS would have access (if needed) to his French filing history through the tax agreements between Fr and US, and if all is in order, there shouldn’t be a problem.


Actually, you'd be surprised how little chance there is of the IRS and the Fisc "comparing notes" on an individual taxpayer like that. In fact, the US is rather well known for NOT being terribly open to sharing taxpayer information. With the IRS as short staffed, under funded and having such laughable computer systems as it is, they simply don't have the ability to search out those who simply haven't filed. That could obviously change over time depending on funding levels and whether or not the government over there can get its act together on IT systems. But no one is holding their breath on that.


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## Harry Moles

SPGW said:


> It looks like having a US SS number is enough to confirm he is « in the system » as far as FATCA goes.


That doesn't really put him "in the system" in any meaningful way - the IRS does not currently look at FATCA data to find people who aren't filing FBAR or tax returns. One day in the future they might develop that ability, but at present they don't have the resources. FATCA is an expensive joke.



SPGW said:


> if he was ever to go and live/ work in the US, would there be any issue with never having filed in the US?


He might be asked why there were no previous returns on file. He would have a range of possible answers to choose from, some truthful, some not. If he were serious about planning a move to the US it would be advisable to come into compliance beforehand, as the amnesty program for non-residents is better than for residents.



SPGW said:


> In theory we suppose the IRS would have access (if needed) to his French filing history through the tax agreements between Fr and US, and if all is in order, there shouldn’t be a problem.


The IRS would have no such information unless they were to begin a serious investigation and make specific requests from the French authorities. Whether your friend had or had not filed in France would have no bearing on the fact that he failed to file in the US.


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## SPGW

All good info thanks.
Is there a risk of late fees, penalties and interest accumulating if he does nothing?
How do you get into compliance prior to making a first declaration as a resident?
He has no plan at all for this to happen, so maybe crossing that bridge when it comes is the best approach ( ie do nothing now).?


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## Bevdeforges

SPGW said:


> He has no plan at all for this to happen, so maybe crossing that bridge when it comes is the best approach ( ie do nothing now).?


Probably the best way to go. Depending on how far in the future he might decide to return, the laws may have changed. 

But just for reference, any "late fees" are based on a percentage of how much tax is due on the late returns. Living overseas, he may very well owe nothing (based on the Foreign Earned Income Exclusion and/or the Foreign Tax Credit mechanisms for avoiding double taxation) so x% of 0 is still 0. 

Don't wait until he has moved to get into compliance. If he starts thinking seriously about returning to the Old County, he should look into the Streamlined Compliance Procedures - U.S. Taxpayers Residing Outside the United States | Internal Revenue Service - well before making the move. The "domestic" program for this includes penalties, whereas the program for overseas residents (at the time of filing for the program) pretty much absolves you of everything as long as you have not "willfully" avoided filing or paying large amounts of taxes that would have been due even with the tax treaty provisions.


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## Harry Moles

I have nothing further to add, really.

Well one thing. Until such time as your friend decides to prepare for a move to the US, his only concern is keeping that US citizenship secret from French banks. If he's had existing accounts for many years this shouldn't be too difficult, but it may be difficult to hide the US birthplace on his ID when opening a new accounts somewhere. (Since he has an SSN, it's not the end of the world if he is identified as a US person, though it could limit the investment options offered to him, depending on the institution.)


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## SPGW

Agreed. No point trying to hide it, and yes, there will be some investment limitations.
Thanks again for all the input.


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## Harry Moles

SPGW said:


> Agreed. No point trying to hide it, and yes, there will be some investment limitations.
> Thanks again for all the input.


Plenty of point to hiding it - if one can. This is tricky in Europe if you've got birth country on your national ID, though.


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