Tax Expert Claudemir Ramos Explains How Expats Can Avoid IRS Penalties

Living abroad doesn’t exempt US citizens and permanent residents from their tax obligations to the Internal Revenue Service (IRS). However, many expatriates are unaware of these requirements, inadvertently becoming non-compliant with the IRS and subject to penalties, including criminal charges. To delve deeper into this issue, we’ve invited an expert in the field to shed light on potential solutions.

Claudemir Ramos, an expert with over a decade of experience in Brazilian law, brings his expertise to the American market through his company, CR Accounting & Consulting LLC. Renowned in the Brazilian accounting field, he extends his influence by providing valuable insights through influential articles on tax regulations in both countries, helping to disseminate knowledge about tax rules to a wider audience.

Our specialist notes that US-born individuals or green card holders living abroad may qualify for the IRS Streamlined Filing Compliance Procedure. This program enables them to fulfill tax obligations without penalties for late filing, provided the lack of compliance was due to unawareness.

Tax obligations include filing annual income tax returns for global income, submitting FATCA Form 8938 for foreign financial accounts meeting specific thresholds, disclosing ownership in foreign corporations exceeding 10% via Form 5471, reporting investments in foreign funds with Form 8621, declaring third-party gifts over $100,000 with Form 3520, and disclosing foreign bank accounts or assets over $10,000 with Form 114 – FBAR.

Qualification for the Streamlined Foreign Offshore Procedure includes living outside the US for at least 330 days in one of the last three years and certifying that failure to file taxes and FBAR was due to an honest lack of awareness of US tax laws.

If you qualify for the program, you will need to submit the last three years of overdue tax returns, the last six years of FBAR, a comprehensive statement explaining asset acquisition, and payment of calculated income tax due with applicable interest.

Seeking personalized assistance tailored to individual tax situations and professional guidance from experts like Claudemir Ramos is vital to understanding the complexities of tax filing statuses.