We have been contact by a lot of ordinary Americans living in Spain, telling us that they have not filed US taxes with the IRS (Internal Revenue Service) since they arrived here. They work in Spain, save their money in the bank and they pay taxes in Spain just as any other resident.

Some have heard from other Americans that they might have problems in the future, but they don’t know what to do about it.

This year American Congress have implemented a law giving the U.S. government the power to revoke passports of those who don’t pay their taxes. The law also allows the government, through the U.S. State Department, to prevent tax delinquents from getting a new passport.

The rule will be applied to Americans with “seriously delinquent” tax debt, people who owe $50,000 or more in unpaid taxes, including penalties and interest.

Americans traveling for humanitarian reasons will be able to ask for an exception if they’re tax delinquent, and the rule does not apply to people who are on an IRS payment plan or contesting a tax case in court.

The proposed regulation has angered some groups, particularly citizens living abroad, who may not receive the IRS’s mail, since the system isn’t set up to deal with expats very well.

As you may know, Americans abroad need their passports for many routine activities of daily life, such as banking, registering in a hotel, or registering a child for school.

Actually, there are 3 ways to  to clean up a tax mess, it is important to remember that the Voluntary Disclosure Program is not the only way for an ordinary American abroad to rectify problems with the IRS. In fact, it is quite often the wrong way to do it.

Everyone has different tax situations and everyone needs personalized advice. If you want our professional advice, please contact us at:

info@ustaxconsultants.es Tel: +34 915194392