8 International Tax Tips and Advice for U.S. Citizen Expats

8 U.S. Expat Tax Advice Tips for International Citizens (2025)

Expat Tax Advice Tips for International Citizens  

As we enter another tax season, many U.S. expats across the globe will learn for the first time that even if they live overseas, they are still required to file U.S. taxes. Unfortunately, many attorneys and tax professionals unnecessarily fear-monger international expats and other Americans abroad about the ‘dangers’ they will face if they are out of compliance — when in fact the IRS has developed several international tax programs available to safely get taxpayers into U.S. tax compliance. Whether the taxpayer is a new expat or has been living overseas for several years and only recently learned that they may have missed some of the requirements when filing annual U.S. taxes, we have compiled a list of eight (8) important expat tax strategies for international Americans.

*Golding & Golding first published this article in 2022 and has since updated and expanded the list.

Expats are Required to File Taxes, FBAR, and FATCA 

The United States follows a worldwide income tax model. That means taxpayers are taxed based on their U.S. person status and not their country of residence. Therefore, U.S. expats who are still U.S. persons for tax purposes — U.S. citizens, lawful permanent residents, and foreign nationals who meet the substantial presence test — are still required to file annual IRS tax returns. In addition, expats are also required to file international reporting forms such as the FBAR and Form 8938.

Which Foreign Accounts Are Reportable?

There is a misconception that only foreign bank accounts are reportable to the U.S. government on international reporting forms such as the FBAR, but there are many different types of foreign accounts that are reportable — and there are several international reporting forms that a taxpayer may have to file with the IRS. Some other common international reporting forms include Form 3520 (foreign gifts, inheritances, and trusts) Form 8621 (Passive Foreign Investment Companies, PFIC), and Form 8938 for foreign accounts and assets (FATCA).

Different Tax Forms, Different IRS Due Dates

Not all tax returns and international reporting forms are due to be filed on the same day. For example, U.S. expats typically have until June to file their tax return and October to file the FBAR (while it is still on automatic extension). Other foreign tax forms may require the filing of an extension IRS Form 4868 or 7004.

Treaty Election Still Requires International Reporting

For some U.S. expats who live in a foreign country that is a treaty country, they may be able to make a treaty election to be treated as a foreign, non-resident alien for U.S. tax purposes. This could minimize or eliminate their U.S. tax liability.  Noting, that even though the taxpayer may not have to report their foreign-sourced income, they are still required to file the international information reporting forms each year.

A Treaty Election May Exempt FBAR

Taxpayers may also consider whether if they make an election they are still required to file the annual FBAR. The IRS takes the position that it is still reportable, but in the recent case of Aroeste, the court concluded that a taxpayer living in Mexico qualifying under a treaty election to be treated as a non-resident alien was not required to file the FBAR.

Report Gross Income and Foreign Taxes (not net income)

Taxpayers who earned foreign income and paid foreign taxes may be able to claim foreign tax credits against their U.S. tax liability on their foreign income. But, taxpayers should be careful to report their gross income along with the foreign tax credits separately on Form 1116 — and not just report their net income (gross income minus taxes paid,) because the latter will result in a higher U.S. tax liability.

Under the Exclusion, Still Have to Report

For taxpayers who qualify for the foreign earned income exclusion, it is important to note that the exclusion means that the taxpayer has to file Form 1040 along with Form 2555 to claim the exclusion. In other words, even if the U.S. taxpayer earns less than the annual exclusion amount, they are still required to file a Form 1040 and claim the exclusion–they cannot just simply avoid filing, because the IRS will not be aware that the taxpayer falls under the exclusion amount which could lead to substantial tax debt and ultimately having their passport denied or revoked.

Is Your Lawyer Falsely Representing They Are a Board-Certified Tax Lawyer Specialist?

While both CPAs and attorneys may handle tax matters, a Certified Public Accountant (CPA) or Enrolled Agent (EA) is not the same as a tax attorney.

The roles of non-legal tax professionals (CPA and EA) are different than the role of an Attorney. Beyond these designations, some tax lawyers are also licensed as Board-Certified Tax Law Specialists, which means they are licensed by at least one State Bar’s Board of Legal Specialization. Recently, we have had taxpayers let us know that they had engaged in an initial consultation with a law firm that claims to have Board-Certified Tax Lawyer Specialists on staff — only to learn that there are no attorneys at the firm who are licensed as a Board-Certified Tax Attorney Specialist by any State Bar in the United States.  The firms claim they are “Board-Certified Tax Law Specialists” because they may have a CPA on staff. Preposterous.

The only way to become a “Board-Certified Tax Law Specialist” is for an attorney to complete additional years of specialized tax education, pass a rigorous examination, and officially receive the designation from the State Bar. Many CPAs have no background at all in tax and just because a lawyer obtains a CPA designation does not mean they can call themselves “Board-Certified.”

Why is this important?

Board certification is not easy to achieve. Obtaining a specialized designation is quite difficult and clients can be confident that their attorney has completed the necessary training and testing. Designations are earned. How can you trust an attorney who is lying about their background? If a lawyer is willing to make false claims about these types of designations, then perhaps they are also willing to take some unethical leaps with billing?

Late-Filing Disclosure Options

If a Taxpayer is out of compliance, there are various international offshore tax amnesty programs that they can apply to safely get into compliance. Depending on the specific facts and circumstances of the Taxpayers’ noncompliance, they can determine which program will work best for them.

*Below please find separate links to each program with extensive details about the reporting requirements and examples.

Streamlined Filing Compliance Procedures (SFCP, Non-Willful)

The Streamlined Filing Compliance Procedures is one of the most common programs used by Taxpayers who are non-willful and qualify for either the Streamlined Domestic Offshore Procedures or Streamlined Foreign Offshore Procedures.

Streamlined Domestic Offshore Procedures (SDOP, Non-Willful)

Taxpayers who are considered U.S. residents and file timely tax returns each year but fail to report foreign income and/or assets may consider the Streamlined Domestic Offshore Procedures.

Streamlined Foreign Offshore Procedures (SFOP, Non-Willful)

Taxpayers who are foreign residents may consider the Streamlined Foreign Offshore Procedures which is typically the preferred program of the two streamlined procedures. That is because under this program Taxpayers can file original returns and the 5% title 26 miscellaneous offshore penalty is waived.

Delinquent FBAR Submission Procedures (DFSP, Non-Willful/Reasonable Cause)

Taxpayers who only missed the FBAR reporting and do not have any unreported income or other international information reporting forms to file may consider the Delinquent FBAR Submission Procedures — which may include a penalty waiver.

Delinquent International Information Returns Submission Procedures (DIIRSP, Reasonable Cause)

Taxpayers who have undisclosed foreign accounts and assets beyond just the FBAR — but have no unreported income — may consider the Delinquent International Information Return Submission Procedures. Before November 2020, the IRS was more inclined to issue a penalty waiver, but since then this type of delinquency procedure submission has morphed into a reasonable cause request to waive or abate penalties.

IRS Voluntary Disclosure Procedures (VDP, Willful)

For Taxpayers who are considered willful, the IRS offers a separate program referred to as the IRS Voluntary Disclosure Program (VDP). This program is used by Taxpayers to disclose both unreported domestic and offshore assets and income (before 2018, there was a separate program that only dealt with offshore assets (OVDP), but that program merged back into the traditional voluntary disclosure program (VDP).

Quiet Disclosure

Quiet disclosure is when a Taxpayer submits information to the IRS regarding the undisclosed foreign accounts, assets, and income but they do not go through one of the approved offshore disclosure programs. This is illegal and the IRS has indicated they have every intention of investigating Taxpayers who they discover intentionally sought to file delinquent forms to avoid the penalty instead of submitting to one of the approved methods identified above.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and/or other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.