Tag Archives: U.S. tax comliance

Tax compliance for U.S. citizens living outside the United States

The United States of America – A Nation of Forms

The meaning of U.S. citizenship

As it stands, there are a number of normal investments  prohibited to U.S. citizens living abroad. U.S.  citizens living abroad will likely find it much more  difficult to find an accountant or tax prep person to help them  with their taxes. There are at least three reasons:

 1. Paid Tax Preparer Registration Required – Effective for  the 2011 tax year, the IRS is requiring all “paid tax preparers” to register with and pay a fee to the IRS. For many this will require the taking of an exam.

(Whether this can be applied to preparers outside  the U.S. or not, it will certainly reduce the number  of  people  willing to take this on.)

 2. Professional liability – Who would  want the risk of making a mistake? I  know at least one Canadian CA who will not take American clients. Who would want the problems? In addition to  the 1040, there is the problem of the FBAR, the new 8938 form, the appropriate RRSP election form, and a  host of possible  other forms (see below).

3. Too much work for too little money – The work  is so substantial that, that I expect the minimum fee will be in the range of $1000 (for somebody who has no assets or issues). Although this I small change for some taxpayers, it is clearly too expensive for most taxpayers.

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