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ssmmss · Aug 8, 2009, 12:31 PM

I am aware that US citizens are subject to taxes on their worldwide income. However, if I do move overseas, wire all my net worth abroad and stop paying taxes including not paying taxes on a substantial capital gain, what can the IRS do:
1) Can they follow me abroad?
2) Can they confiscate my money in a foreign account?
3) Can they confiscate property in my name abroad?
4) Let's say I decide to visit the US every once in a while, would I be arrested and how would they know?

tickle · Aug 8, 2009, 12:44 PM

Are you going over on your passport ? Are you going to work over there ?

I think your best bet is to hire an immigration attorney and get all of this straightened out. I think there are lot of obligations you have to meet such as basically renouncing your US citizenship and that would effect your old age security benefits if you didn't come back at least every six months as we have to here in Canada if we want to live abroad and still maintain our benefits.

What country do you intend on settling in ? That would make a difference as well.

Tick

MukatA · Aug 9, 2009, 10:53 AM

If your worldwide income exceeds the filing requirement, you are required to file the tax return.
Filing U.S. tax return does not mean that you will owe the U.S. taxes. Chances are you will not owe any tax, or you will owe a small amount.
With your tax return you can file Form 2555 Foreign Earned Income Exclusion and/or Form 1116 for foreign tax credit. Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income

You should not plan on not filing the tax return. Even if you miss a single return, on which you may not owe any tax, IRS will compute your tax without any foreign income exclusion or foreign tax credit. On stocks sales, it will assume your cost basis to be zero. That means according to IRS you will owe a big amount. Then with interest and penalty it will become a huge amount. And may be at that time you are not in a position to sort it with IRS. You may not even have enough record to defend yourself. Then IRS will certain try to go after your worldwide assets.

AtlantaTaxExpert · Aug 10, 2009, 08:48 AM

Further, if you have no formally renouned your U.S. citizenship, then the country in which you are living may have the obligation, under a tax treaty with the U.S. to act as an agent for the IRS to collect any taxes due as specified by the IRS, which, as noted by Mukata, will be calculated using the worst possible set of assumptions available.

BOTTOM LINE: Go ahead and file! With the combination of the Foreign Income Exclsuion (Form 2555) and Foreign Tax Credit (Form 1116), you may owe NOTHING.