The tax filing deadline is approaching for a portion of the 8 million U.S. citizens and green card holders residing outside the United States.
The Internal Revenue Service (IRS) has issued a new notice aimed at these millions of American taxpayers and green card holders living abroad, urging them to file their tax return by June 17. It is vitally important to meet this deadline to avoid possible fines and financial penalties.
Of the aforementioned 8 million U.S. citizens and green card holders residing abroad, about 500,000 fulfill their tax obligations by filing a tax return with the IRS each year. That said, there is less than a week left for all these people who have tax obligations in the United States to comply with them by filing their tax returns for the 2023-2024 tax year.
IRS Assistance for US Citizens and Green Card Holders Residing Abroad
It is important to note that every American citizen or green card holder has tax obligations with the IRS, even living outside the country.
Being abroad can make it difficult to file taxes, since there is no IRS office nearby to receive assistance in case of doubts or need for help. However, the U.S. tax agency offers the option of contacting by phone at 1-267-941-1000 for guidance and support in this process.
U.S. citizens are responsible for paying taxes on their overseas income, no matter where they reside. On the other hand, legal permanent residents in the United States, that is, green card holders, are responsible for paying taxes on their international income. In addition, certain foreigners who spend a specific amount of time in the United States may also be subject to federal taxes in the country.
Consequences of Not Complying with Tax Obligations
If a person does not file his tax return for one, two or more years and then returns to the United States for good, he will face consequences from the IRS. Late filing penalties may be charged for each month of late filing, in addition to interest on unpaid taxes for the months or years in arrears.
It is important to keep in mind that if a tax refund or a tax credit is expected, it cannot be obtained until all the corresponding returns are filed and the corresponding taxes are paid.
In addition, a history of not filing tax returns, even living abroad, can pose a major obstacle when applying for bank loans or mortgages.
Who Should Consider the IRS Physical Presence Test?
Proof of physical presence must be submitted by all those people who live and work abroad, or who are there for personal reasons. this test can also help you avoid paying U.S. income taxes on your foreign income.
If you live in a country that has a tax treaty with the United States, the physical presence test can also help you reduce or eliminate double tax burdens on your income.
Also, if you are an American retiree with retirement payments coming from the United States but you reside abroad the proof of physical presence will also help you to pay income taxes in the United States on your social security benefits.