The United States is one of only two countries worldwide that requires its citizens to file and pay income taxes regardless of where they reside. Unfortunately, many Americans who end up living and earning money overseas fail to keep up with their related obligations.

In some cases, that can leave a generally responsible, honest person facing serious civil and even criminal consequences. Recognizing the scope and significance of the problem, the Internal Revenue Service has created a special program that provides amnesty to expatriates who voluntarily come into compliance.

Taking advantage of the Streamlined Offshore Filing Procedure is generally quite straightforward and will be worthwhile for just about anyone living overseas who have fallen behind on federal taxes. A quick look at five of the most significant benefits that come with securing amnesty under this system should make that clear.

The Internal Revenue Service takes tax fraud and other criminal activity quite seriously, investigating and prosecuting thousands of cases in the average year. At the same time, many improperly prepared or non-existent tax returns result not from intentional malfeasance but simple mistakes or ignorance of the laws.

This is particularly true of Americans who spend time living and working in other countries. Only the United States of America and Eritrea require that their citizens report and pay taxes on income earned while living overseas. As a result, many Americans who fall in this group end up failing to file tax returns purely because they are unaware of the need to do so.

Fortunately, the Internal Revenue Service has become understanding about this problem and offers amnesty, by default, to just about all those who make this common mistake. In fact, is now possible to file your taxes online in such a way as to automatically qualify for amnesty.

If there were no real reason to worry about filing and paying income taxes as an American expat, many would fail to do so. As most realize, though, the Internal Revenue Service has some powerful tools that it can use to encourage compliance with the tax code.

Expatriates who have failed to file and pay taxes can come back into the government’s good graces by making use of the amnesty program. The five benefits that await most of those who do so concern:

  • Penalties and fees.
  • Simply failing to file a single return on time will subject a taxpayer to significant penalties and fees that keep piling up. The federal amnesty program for expatriates does away with some of these charges and significantly restricts others. Even an expat who might otherwise have been facing thousands of dollars or more in penalties can typically escape paying the tab by seeking amnesty.
  • Levies.
  • Should the total owed to the government rise to a certain level, the Internal Revenue Service will impose levies on property and other assets. Amnesty does away with this threat, in most cases.
  • Negative public records.
  • Tax problems typically become a matter of public record, which can make life inconvenient or worse. Obtaining amnesty will help keep such threats from materializing.
  • Criminal liability.
  • In extreme cases in the past, the Internal Revenue Service has criminally prosecuted expatriates who failed to file taxes while living overseas.
  • Peace of mind.
  • Finally, obtaining amnesty will make it possible to write off all the tax-related concerns that might otherwise have arisen.

For reasons like these and others, many Americans living overseas or who have recently returned home seek tax amnesty every year. While it will always be best to keep up with filing and paying taxes, obtaining amnesty can easily pay off, as well.