While living in the Southeast Asian region, it’s easy to forget about U.S. tax obligations, especially if the taxpayer’s income is deemed “minimal.” Let’s first re-visit our tax filing requirements, where an excerpt is noted right on the last page of one’s U.S. Passport, “All U.S. Citizens working and residing abroad are required to file and report on their worldwide income. Consult IRS Publication 54 …”
Tax practitioners may U.S.e the standard deduction as the filing threshold. For tax year 2024, single statU.S. filers can claim $14,600 standard deduction. Therefore, if one can maintain and produce supporting documentation that the tax year’s income is below the standard deduction threshold, the taxpayer may opt to not file a U.S. Income Tax Return. However, it’s good practice to still file a tax return U.S.to show the U.S. Revenue Authorities that your income is below the standard deduction and should generally yield a $0 tax liability. However, if a taxpayer’s worldwide income exceeds the standard deduction, one should prepare and file a U.S. Income Tax Return. Failure to file can lead to penalties and interest and this results in a delinquent statU.S., whether for paying or filing.
Furthermore, there are varioU.S. considerations for having consistent annual U.S. Tax filings. Two U.S. immigration-related examples come to mind, 1) petitioning family members for U.S. immigration, and 2) renouncing one’s U.S. Citizenship. For both scenarios, the U.S. government requires evidence of U.S. tax filing compliance.
While there are several avenues to remedy a delinquent statU.S., let’s focU.S. on the following two examples:
- File the missing years as soon as possible, and pay any tax owed (preparers can compute estimated penalties and interest or taxpayers can wait for IRS assessments and notices); or
- Go through an IRS Amnesty Program (for eligible U.S. Taxpayers, one may qualify for the Streamlined Foreign Offshore Procedures).
The Streamlined Foreign Offshore Procedures stipulate specific eligibility and filing requirements. Some of these are that the failure to file and pay was non-willful, the taxpayer mU.S.t meet the non-residency requirement of being physically outside the United States for at least 330 full days for the last three years and filing of FinCEN’s (Financial Crimes Enforcement Network) Form 114, also referred to as the Report of Foreign Financial Accounts, among others.
Our team can assess and help determine if the Streamlined Foreign Offshore Procedures would be a suitable approach for delinquent tax filers.
ABOUT ARANCEL CONSULTING
Arancel Consulting is a boutique U.S. Tax and Consultancy firm based in Manila, Philippines. The firm specializes in U.S. Expatriate Tax Compliance, U.S. Tax Consultancy, and U.S. BU.S.iness Management Services. The firm partners with Enterline Partners for U.S. immigration referrals and consular services.
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Copyright 2025. This article is for information purposes only and does not constitute legal advice. This article may be changed with or without notice. The opinions expressed in this article are those of Enterline & Partners only.
