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ladelfina · 06-11-2006, 04:13 AM

I'm making a wild guess that 80-90% of Americans working overseas are subject to local income taxes, which in many cases are higher than they would be in the US. I'm not sure why the IRS doesn't do a straight foreign tax credit thing like they do with investments to balance the equation.

Not only are you subject to US tax abroad, but even if you leave for good and renounce your American citizenship, the IRS can claim continued taxes on your worldwide income for as long as 10 years afterwards, if they feel you are doing so for "tax avoidance" reasons. So they assert. How they can prove (or how an individual could disprove) this, I am not sure, nor am I sure what resources they would bring to bear in terms of collection.

06-11-2006, 04:13 AM	#15
ladelfina Thinks s/he gets paid by the post Join Date: Oct 2005 Posts: 2,713	I'm making a wild guess that 80-90% of Americans working overseas are subject to local income taxes, which in many cases are higher than they would be in the US. I'm not sure why the IRS doesn't do a straight foreign tax credit thing like they do with investments to balance the equation. Not only are you subject to US tax abroad, but even if you leave for good and renounce your American citizenship, the IRS can claim continued taxes on your worldwide income for as long as 10 years afterwards, if they feel you are doing so for "tax avoidance" reasons. So they assert. How they can prove (or how an individual could disprove) this, I am not sure, nor am I sure what resources they would bring to bear in terms of collection.