Here, what you need to know about the long arm of the IRS.
Imagine opening your mail and finding a bill from the U.S. Internal Revenue Service (IRS) for $48,730.57.
That’s exactly what happened to me during the summer, and I’m not a U.S. citizen. I don’t even own property in the States.
Needless to say, I was shocked. Then I was angry. I suddenly understood first-hand what the estimated one million Canadian residents with U.S. ties are experiencing as the IRS aggressively pursues anyone who has failed to file an American return declaring their worldwide income.
The U.S. is the only country in the Western world that requires its citizens to file returns and pay taxes no matter where they live or where the money is earned. For years, the IRS pretty much ignored people living abroad but now that’s changed.
If you’re a “U.S. person” – a citizen by birth or naturalization or someone who once worked in the country and held a green card – you’re fair game.
Everyone who holds U.S. citizenship, no matter where in the world they reside, is a target. The IRS even went after the Lord Mayor of London, Boris Johnson, who was born in New York City while his father was a student there, thus making him a dual U.S./U.K. citizen. After Johnson sold his London home recently, the IRS demanded a share of the profit. The Mayor protested but finally paid up. He’s now planning to renounce his U.S. citizenship.
Even if the IRS just suspects you’re an American, you may end up with an official letter demanding an exorbitant amount of money. That’s what happened in my case.
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