Giving up your U.S. passport by renouncing your citizenship now costs you more than ever ($2,350 today, $450 previously). But, this year you could have it cancelled by the IRS as a penalty for your tax delinquency reaching a $50,000 threshold, along with incurring numerous additional fines that continue to be increased.
If you are a U.S. expat or if you manage a global mobility program with U.S. expats, this 2016 tax filing season could lead to an increase in compliancy issues as the IRS has made great strides in its global information gathering and auditing. FATCA requires businesses around the globe to report all assets held by Americans, and while it was aimed at big time cheaters, the law has made tax filing a little more difficult and scary for expats.
To avoid penalties and fines, clean up your data through your compensation accumulation program and heed these 4 tax tips.
Toward the end of 2015, the U.S. signed several unprecedented international agreements regarding the digital exchange of information and began receiving massive amounts of overseas account information from FATCA partner countries. This could very well be the year your account information is sent to the audit-hungry IRS. To make matters worse, aside from the onerous penalties associated with non-compliance, the IRS has added a new weapon this year for punishing tax-delinquent expats. Starting in 2016, if your tax delinquency reaches a $50,000 threshold (to be adjusted for inflation), you could potentially have your passport cancelled.