What You Need to Know if You Missed the IRS’ June 15 Overseas Taxpayer Deadline

United States taxpayers who live in foreign countries have until June 15 to file their income tax returns each year. While the IRS extended the filing deadline for domestic filers in 2021, it did not extend the deadline for filers living abroad. In this article, Boston international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains what you need to know if you live overseas and are now behind on your U.S. taxes.

1. File Your Return or Request an Extension

If you inadvertently missed the June 15 filing deadline, you should either file your return promptly or request an extension. You do not want to simply ignore the issue, as this can have additional negative ramifications.

2. Calculate Your Interest and/or Penalties

When you miss the filing deadline and you owe tax, you begin to accumulate interest and penalties immediately. These can include a failure-to-file penalty and a failure-to-pay penalty, and they are generally calculated as a percentage of the tax you owe. However, if you have “reasonable cause” for failing to file or pay your U.S. income taxes on time, then you may be able to avoid these penalties. An international tax attorney can help you determine if you have reasonable cause.

3. Pay What You Owe

When you submit your tax filing, you will need to include payment of the interest and penalties you owe. Even if you request an extension, you will still need to include at least a partial payment with your request. The longer you wait, the more interest and penalties you will accrue.

4. Determine if You Need to Report Your Foreign Assets

In addition to having an obligation to file U.S. income taxes, many overseas taxpayers have an obligation to report their foreign assets. If you are subject to the FATCA or FBAR filing requirements (or both), non-compliance with these requirements can also lead to substantial penalties.

If your foreign assets are subject to FATCA, you will need to file with the IRS (most likely using Form 8938). If you need to file an FBAR, you must do so online using the Financial Crimes Enforcement Network’s (FinCEN) e-filing system. However, if you are delinquent on either of these filings, then you may need to consider your voluntary disclosure options instead.

5. Evaluate Your Voluntary Disclosure Options if Necessary

Voluntary disclosure provides a means for U.S. taxpayers to mitigate the consequences of certain tax filing mistakes. There are two main programs—the IRS’s Streamlined Filing Procedures and IRS CI’s Voluntary Disclosure Practice—both of which have very different eligibility criteria, requirements and consequences. In order to determine whether voluntary disclosure is an option you want to consider, you will need to consult with an experienced international tax attorney.

Request an Appointment with a Boston International Tax Attorney

If you live overseas and are behind on your U.S. taxes, you should speak with an attorney promptly. To schedule a confidential consultation with Boston international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, call 617-692-2989, email ket@thornlawgroup.com or tell us how we can reach you online today.