• IRS Push to Educate Overseas Taxpayers

    By Virginia La Torre Jeker J.D.

    05-08-2016

    The Internal Revenue Service (IRS) has been making a huge effort over the past several years to educate US persons abroad. Typically these will be taxpayers with overseas assets and financial accounts. The IRS website contains many resources for US taxpayers with offshore holdings and international interests.

    As I have mentioned before, I believe as time marches on, it will become more and more difficult for taxpayers to assert "non-willfulness" with respect to their tax noncompliance. This is so, in part, as the IRS education of Americans abroad continues to roll-out at great speed. Often, one of the major reasons given by noncompliant taxpayers for their offshore-related tax noncompliance is that they "did not know" they "needed to file a [tax return / FBAR / Form 8938....]".

    The latest IRS educational tool of which I am aware is a webinar, available on demand, covering the topic "Foreign Earned Income for U.S. Overseas Taxpayers". It is almost one hour long and is available here. The webinar is available only in English, which of course, will not be of any great help to the numerous US taxpayers abroad who do not have a firm grasp of the English language. It is clear to me that not only are the US tax rules exceedingly complex when it comes to the overseas taxpayer, but many US tax subjects living abroad simply lack a good command of the English language to navigate the IRS website and other aspects of the tax "system".

    Nonetheless, the IRS webinar can clearly help many persons abroad to understand their filing duties. The webinar covers the basics of the Foreign Earned Income Exclusion including:

    • The requirements for claiming the foreign earned income exclusion
    • Identifying which form to use, Form 2555 or 2555-EZ
    • Specifying the information to include on the Form 2555 (or 2555-EZ)

    You can learn more about the "Foreign Earned Income" and "Foreign Housing" Exclusions at my blog posts below:

    1. Foreign Earned Income Exclusion: What is "Earned Income"?
    2. An Often Overlooked, but Common Mistake in Taking the Foreign Earned Income & Housing Exclusion
    3. International Workers - Shipmates, Pilots and Crew - How to Determine Foreign Earned Income
    4. Late Tax Returns - IRS Denies Foreign Earned Income and Housing Exclusions
    5. IRS Announces Disappointing 2016 Foreign Housing Cost Amounts
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  • The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.

Virginia La Torre Jeker J.D.

Virginia La Torre Jeker J.D., is based in Dubai. Virginia has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has over 30 years of experience specializing in the international aspects of US tax, including FATCA. She has been quoted in the New York Times and Newsweek, and is regularly quoted in many local news articles and publications."

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