Warning for U.S. Citizens

[wingssail]

Originally Posted by Dockhead

...Concerning mail forwarding -- I don't know a single long term expat without ties to the U.S. who uses a mail forwarding service. I'm not even sure that the IRS accepts that kind of address. I don't use that kind of service because I simply don't get physical mail, not anywhere. I am all electronic with everything. I also don't know anyone who obsessively changes or provides fresh addresses to the IRS. If you think you are keeping up with your filings and payments, you don't expect notices from them. It's probably a good idea to take steps to make sure that you are always reachable by physical mail -- sure. Does everyone do it? I bet less than half, I bet less than 10% of long term expats actually do, so this is a real risk for well-intentioned and law-abiding people...

I'm a little surprised by this, Dockhead, because I never suspected that any expats from the US would not have maintained ties, including a mailing address, in the US. Maybe it's the "without ties to the US" part. I've been out for 25 years but I've kept my ties, and I still have my mailbox in the US and they collect my mail and send it to me wherever I am when I request it. I don't even get my mail scanned; I get the paper (it's vastly cheaper then scanning every thing, although the postage is a bit onerous at times).

I've had tons of interaction with the IRS over the years, mainly due to overseas employment, and at times it has not been timely, but I have always been aware of my tax obligations and never had an IRS issue which was not resolved in my favor. Never. And that includes when I had to creatively do my returns four ways before finding one in which I didn't have to pay.

I had that mailbox for many years before I climbed on a boat and left the US. It never dawned on me to drop that mailbox. I just kept it. And I've never had an issue with the IRS about it being a mailbox company (although the state licensing and voters registration folks want to know where I actually live, but they knowingly accept my last marina address in Seattle which I have not lived at for 30 years, LOL). And I have never lost a mail package although one crossed the Pacific four times before catching up with me.

This has been so simple for me, and seemed so natural, that I thought everyone would do it. I am very surprised that you do not. With all the major paperwork you have to go through already yourself, I think keeping your mail coming would be an easy one.

I don't even want to talk about your filing issues, it sounds horrible. I've always done my own and they wern't too bad. Maybe it's OK not to be rich.

[Dockhead]

Originally Posted by wingssail

I'm a little surprised by this, Dockhead, because I never suspected that any expats from the US would not have maintained ties, including a mailing address, in the US. Maybe it's the "without ties to the US" part. I've been out for 25 years but I've kept my ties, and I still have my mailbox in the US and they collect my mail and send it to me wherever I am when I request it. I don't even get my mail scanned; I get the paper (it's vastly cheaper then scanning every thing, although the postage is a bit onerous at times).

I've had tons of interaction with the IRS over the years, mainly due to overseas employment, and at times it has not been timely, but I have always been aware of my tax obligations and never had an IRS issue which was not resolved in my favor. Never. And that includes when I had to creatively do my returns four ways before finding one in which I didn't have to pay.

I had that mailbox for many years before I climbed on a boat and left the US. It never dawned on me to drop that mailbox. I just kept it. And I've never had an issue with the IRS about it being a mailbox company (although the state licensing and voters registration folks want to know where I actually live, but they knowingly accept my last marina address in Seattle which I have not lived at for 30 years, LOL). And I have never lost a mail package although one crossed the Pacific four times before catching up with me.

This has been so simple for me, and seemed so natural, that I thought everyone would do it. I am very surprised that you do not. With all the major paperwork you have to go through already yourself, I think keeping your mail coming would be an easy one.

I don't even want to talk about your filing issues, it sounds horrible. I've always done my own and they wern't too bad. Maybe it's OK not to be rich.

You use a U.S. address on your tax returns? Do you claim the FEIE? I would be really careful with that. You do know about FBARs, right?

I have never had a problem with the IRS -- touch wood. Never been audited (touch wood three times), never had any claims from them. I am VERY careful, totally honest, keep good records, and have my returns prepared by good professionals. I have never "creatively do[ne] my returns four ways before finding one in which I didn't have to pay"; I always pay.

Nor have I ever missed a critical piece of mail from them. I just understand very well how it could happen to someone. I have been unable to receive mail for years at a time, particularly in the early '90's when I was living in a post-Communist country where the postal system was basically broken down.


As to expats without ties -- there are many of us. I am not totally without ties -- I still own property in tbe U.S. and have U.S. bank accounts. I have an aged father living in the States. But that's about it. Others of us, after 20 or 30 years, have even less ties than that. Speak a different language at home, become part of a different society. It's very common.

[Copacabana]

Originally Posted by Pelagic

For some reason, Canada has recently adopted that same policy

I am British born, Canadian immigrant, non resident for 30 years .

I have always traveled on my UK passport to Canada in the past, but just before Covid when booking flight to Vancouver, I was informed that I needed to enter with a valid Cdn passport..

As it had just expired, delays ran into Covid, so never went

No idea why this law is being enforced, but probably Tax related

I'm not sure this is new Pelagic. I believe it has been the case for many years (decades?). Every time I return to Canada with my kids, they have to present their Brazilian passports leaving Brazil and their Canadian passports arriving in Canada. On the eve of one trip, I discovered their CDN passports had expired. I inquired at the Canadian consulate if they could simply enter Canada as Brazilians. They answer was simply "no, they are Canadians and thus have to enter Canada with a valid Canadian passport."

[belizesailor]

Originally Posted by Pelagic

Is it not also a case with IRS, that you are guilty unless proven innocent and that is is a quota driven Agency?

Yes, if the IRS files a judgement against you then the burden is on you to prove them wrong. Been there, done that. Its a good time to have a well prepared professional CPA. I think they were on a fishing expedition, they discovered we were well prepared and decided to pursue easier prey...especially after my CPA proved they in fact owed me money. Fortunately, they have never come back to try again.

Re quotas. The IRS went thru an overly agressive phase of asset siezures and Ive heard quotas for agents. They still have those powers, but use them with more restraint these days.

On a related note: they can sieze assets internationally. Depends on which country I assume, but they have made significant asset siezures in Belize.

[goboatingnow]

Originally Posted by capn_billl

cool. Which country?

We aren't even allowed silencers in the USA.

I know, it’s hilarious when I vist my in-laws in rural Illinois , he can’t get silencers. I show him my “S” on my license !!!

[wingssail]

Originally Posted by Dockhead

You use a U.S. address on your tax returns? Do you claim the FEIE? I would be really careful with that. You do know about FBARs, right?

I have never had a problem with the IRS -- touch wood. Never been audited (touch wood three times), never had any claims from them. I am VERY careful, totally honest, keep good records, and have my returns prepared by good professionals. I have never "creatively do[ne] my returns four ways before finding one in which I didn't have to pay"; I always pay.

Nor have I ever missed a critical piece of mail from them. I just understand very well how it could happen to someone. I have been unable to receive mail for years at a time, particularly in the early '90's when I was living in a post-Communist country where the postal system was basically broken down.


As to expats without ties -- there are many of us. I am not totally without ties -- I still own property in tbe U.S. and have U.S. bank accounts. I have an aged father living in the States. But that's about it. Others of us, after 20 or 30 years, have even less ties than that. Speak a different language at home, become part of a different society. It's very common.

Thanks for the reply. I am very well aware of FEIE and FBAR rules but I think that with regard to my tax and filing status, disgression would be smart. Thanks for asking.

I will mention that I lived on my boat while working over seas and my periods of overseas employment or physical presense overseas met requirements. I was audited three times in the past; passed each time.

I maintain strong ties to the US, and will continue to do so, out of silly loyalty really, and may need to return there sometime so I am careful to stay clean.

I think if I was going to cut ties, I'd make a full break and change my citizenship.

[Pelagic]

Originally Posted by Copacabana

I'm not sure this is new Pelagic. I believe it has been the case for many years (decades?). Every time I return to Canada with my kids, they have to present their Brazilian passports leaving Brazil and their Canadian passports arriving in Canada. ."

I am pretty sure this enforcement change has happened in the last 15 years

Before that, I always traveled to Canada on my UK pp . I kept the Cdn passport valid and as a backup with me if in North America, but as most of my long stay projects were in Europe and my office based in HK, traveling on British passport was more convenient for EU visa and travel.

I would think it would be awkward and complicated to show varios immigration stops, an exit visa stamp on one passport and have an entry on another for one trip.
Especially if going to other countries after just a few days stop in Canada, which was often the case to visit family.

[Group9]

State taxes can sneak up on you, too. Before one of our long cruises, we sold our house and all our property in a state, moved on the boat and left. We had a large realized capitol gain the next year, and I was very dismayed to find my old state wanting to take their piece of it, simply on the basis that I still had a driver’s license in that state.

Just establishing Florida residency as we passed though, would have saved us a lot of money and headache.