Is expat a dirty word for home country tax officials

Becoming an expat used to be straightforward, no matter what individual motivation caused an individual to leave the home country.

Over the past few decades, citizens of many world countries who felt the need to roam simply got up and went. Entry to most popular destinations was relatively straightforward, and the UK’s membership of the EU made moving to favourites such as France and Spain as easy as moving to the next town. Those relocating due to work purposes had everything taken care of by their employer, including the provision of an excellent salary and a string of perks. Most importantly, expats weren’t seen by their countries of birth either as freeloaders or bottomless pits of money as regards taxes.

Nowadays, expats could well be forgiven for thinking they’re pariahs easily blackmailed by their home country’s lawmakers, taxmen and other officials, all of whom are out to milk them of their hard-earned savings. Others are more or less abandoned by their country’s diplomats, leaving local lawyers to pick up the pieces of shattered lives, and in some countries they’re regarded as necessities until they’re no longer needed. Expats are being blamed for the failings of host country governments or, even worse, being hit on by corrupt officials desperate for even more tea money. Many thousands in Europe weren’t even allowed to vote for their futures despite false promises by their government.

The latest expat sector at risk from rapacious officials are the US expatriates all across the world who’re not aware they’re liable for US taxation on their pensions, wages and investment incomes. Some 362,000 US citizens living overseas are now having their requests for passport renewals denied by the authorities as the IRS believes they owe it money. This, despite the fact that not having a passport with its current visa is the fastest way to ensure deportation, refers to those who do owe back taxes as well as those who’ve never, ever heard a word from the IRS.

According to the media, the IRS is well-known for struggling to send mail to overseas addresses. A report in 2015 revealed a specific problem for US expats overseas, in that the US taxman’s data systems aren’t programmed to recognise international addresses, leaving many notices undeliverable. During the previous year, the IRS sent out some 855,000 tax demands and admits it has no idea whether any were actually received. Presumably, the first time the expats concerned will find out is when they attempt to renew their passports, by which time it’ll be too late.