US Citizens Living in a Foreign Country

Okay, you are no longer living in the U.S.A. You moved all your assets and belongings to a foreign country and you intentions are to never return.

The fact is that the U.S. law states that all citizens must file an income tax return on their worldwide income, regardless of where they live.

You may be asking yourself some of these questions:

Why file a tax return?

What problems can the IRS or the U.S. government give you for not filing a return?

What is at risk for not filing?

How can the IRS get information about me, my business and my income?

Here is some food for thought.

  1. You get married to a foreign person, and you and your new spouse want to travel to the U.S. to see your family. One of the requirements for your spouse to obtain a U.S. visa, is for you to produce copies of your past 3 years of tax returns.
  2. You decided to return to the U.S. You have not filed a tax return for years. What will the IRS say when you start filing returns again? How do you answer the question; how were you able live and feed yourself?
  3. You made some money and you want to invest some of this money in the U.S. stock market or U.S. banks. How do you explain where the money came from? Better have the paperwork ready to prove what you say.
  4. The statute of limitations on tax returns starts when the return is filed, so if you do not file a return when does the timing for the statute of limitations start? The answer could be never.
  5. You did well in your foreign country and would like to return to the U.S., buy a home and put money into bank accounts. How do you prove where the money came from? Will the government think maybe it is drug money?
  6. While living in a foreign country, you gain a large amount of wealth and would like to leave your wealth to your family members who are also living in the U.S. How do they explain their inheritance? What problems will they have? Could they be faced with your non-compliance penalties and taxes?
  7. Passport renewal. At present you are not required to present copies of your prior years’ tax returns to the embassy to renew your passport, but with new and advanced technology, could this soon be a requirement?
  8. Your child wants to go to college in the U.S. He or she may need some assistance. Will you have to prove your income? Will you have to produce copies of your past tax returns?
  9. You have not filed a tax return for years. You have met all the minimum requirements for Social Security and now you want to receive your Social Security benefits.
  10. If you are working in a foreign country, you can exclude from tax $107,600 of earned income. The key here is “exclude”. Before you can exclude it, you first must include it by filing a return. If you do not file a tax return to exclude the income, you risk losing the exclusion. If you lose the exclusion, the IRS can include it in taxable income. Why take the chance? File a return.

U.S. Tax International has more than twenty years specializing in serving U.S. citizens living abroad. These

Contact Us

For clients located in Costa Rica, U.S. Tax International is conveniently located in Rohrmoser, just a few blocks north of the United States Embassy. We can be reached at the phone numbers below or by e-mail at

Plaza Rohrmoser, Second Floor, Unit 38, Geroma, San José, Costa Rica

M-F: 8am-5pm, S-S: Closed