I Live Overseas and Missed the June 15 IRS Tax Return Deadline. What Now?

While U.S. taxpayers living in the United States received a one-month filing extension in 2021, taxpayers living abroad still needed to meet the normal June 15 deadline. So, what if you mistakenly assumed that you had another month to file? Or, what if you simply forgot or got too busy to file? Virginia tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains:

Overseas U.S. Taxpayers Should File or Request an Extension as Soon as Possible

If you live overseas and you inadvertently missed the June 15 income tax filing deadline in the U.S., you should file your return or request an extension as soon as possible. However, in doing so, there are a few important considerations you will need to keep in mind.

For example, if you owe tax, you are now liable for interest, and you may be liable for various penalties as well. As we have discussed previously, these penalties can be severe. Filing for an extension can relieve you of some potential liability; however, you will still face penalties if you are late, and you will need to pay at least a portion of what you owe when you file for an extension.

When filing late, you should not attempt to backdate your return or payment check in an effort to avoid this additional liability. This is a form of tax fraud. When dealing with the Internal Revenue Service (IRS), it is generally best to pay what you owe—although you may have options if you do not have the financial means to do so.

Even if you are owed a refund, you still have an obligation to file your tax return on time. While you might not owe a penalty, failing to file could still lead to an audit or other consequences.

Don’t Forget About the Foreign Asset Reporting Requirements

In addition to the income tax filing requirement, many overseas U.S. taxpayers are subject to foreign asset reporting requirements as well. There are two main sets of requirements: (i) those under the Foreign Account Tax Compliance Act (FATCA); and, (ii) the FBAR filing requirements under the Bank Secrecy Act. The FATCA and FBAR filing requirements apply to different sets of foreign assets, so overseas taxpayers may need to file under FATCA, the Bank Secrecy Act or both.

Similar to failing to timely file income tax returns, failure to timely comply with the FATCA or FBAR filing requirements (or both) can result in steep penalties. While these are limited to financial penalties in most cases, overseas taxpayers who are suspected of intentionally failing to report their foreign assets can potentially face criminal penalties as well. If you have missed the deadline to report your foreign assets to the IRS or the Financial Crimes Enforcement Network (FinCEN), you will want to discuss your voluntary disclosure options with an experienced Virginia tax lawyer promptly.

Contact Virginia Tax Lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group

Kevin E. Thorn, Managing Partner of Thorn Law Group, is a Virginia tax lawyer who represents overseas taxpayers in all IRS-related matters. To request a confidential consultation, please call 703-752-3752, email ket@thornlawgroup.com or contact us confidentially online today.