New Plan of IRS for U.S. Citizens Residing Overseas

Last updated on September 25, 2012

The IRS has announced its new plan for U.S. citizens residing overseas where they can get current with their tax filing. Those taxpayers who haven’t been able to pay taxes in the past may find it easier to get back into the good books of the IRS.

The new procedure will help taxpayers who have low tax compliance. The submissions taxpayers file under the new procedure will be reviewed by the IRS to evaluate the level of compliance. Those taxpayers who do not owe large amount in tax debt may find their review expedited and receive freedom from IRS penalties, liens and levies.

Taxpayers who have not paid taxes for years and have a huge tax debt are not eligible for this procedure. The new plan is aimed at encouraging tax compliance in U.S. citizens who are residing overseas.

“Today we are announcing a series of common-sense steps to help U.S. citizens abroad get current with their tax obligations and resolve pension issues,” said IRS Commissioner Doug Shulman.

The procedure will also allow resolution of problems relating to foreign retirement plans due to tax treaties, tax laws etc. The IRS will accept cases that have low compliance rate.

It is to be remembered that taxpayers who file under this procedure will be required to share information relating to taxes for the last three years. They will also need to file delinquent FBARs (Foreign Bank and Financial Accounts) for the last six years.

The new plan will come into effect from September 1, 2012.