Tax on foriegn made income

[Willy702]

There are some other countries which have similar rules. The concept is simply that it would be easily to shelter your income by just claiming it was foreign earned. Of course there is some greed on the part of the IRS, but in the end its only getting taxes off of highly compensated individuals. Taxes don't even kick in until you make six figures. Further they probably are doing minimal auditing on this so people who make more could easily just check in annually saying they make 50k and I doubt they'd get caught unless they slipped up pretty badly. Beyond that, actions for the IRS would probably be limited to seizing any US assets you might have due to tax court order or trying to convince the country of your residence you are tax cheating scum and hoping they'd extradite you for it.

[cw30000]

Originally Posted by dfloor

The irs website seemed to imply that if I made money while abroad, they would want a piece of it.

How could this be true? that would be plain greedy

Internal Revenue Service

This country and UK tax on worldwide income for their citizen and residents.

[wanneroo]

Originally Posted by killer2021

The USA taxes worldwide income, regardless if you are a resident or not. As long as you are a US citizen, you will pay taxes to the US even if you don't live here. If you don't like it then renounce your US citizenship.

If you haven't figured it out yet, its difficult to renounce US citizenship.

Even then the IRS still says they still own you for 10 years after renouncement.

For most expats, a good tax attorney and accountant should be able to reduce your tax burden to the point it's not a problem.

[wanneroo]

Originally Posted by Willy702

There are some other countries which have similar rules. The concept is simply that it would be easily to shelter your income by just claiming it was foreign earned. Of course there is some greed on the part of the IRS, but in the end its only getting taxes off of highly compensated individuals. Taxes don't even kick in until you make six figures. Further they probably are doing minimal auditing on this so people who make more could easily just check in annually saying they make 50k and I doubt they'd get caught unless they slipped up pretty badly. Beyond that, actions for the IRS would probably be limited to seizing any US assets you might have due to tax court order or trying to convince the country of your residence you are tax cheating scum and hoping they'd extradite you for it.

The irs has a lot of information sharing with other countries so if you claim 50k income year after year and you get audited, you probably wont stand a chance.