Back Taxes

Back taxes are unpaid federal or state taxes from a previous tax year. The balance may include the original tax owed, penalties, and interest.

Why it matters for U.S. expats

Living abroad does not prevent the IRS from collecting back taxes. However, filing missing or corrected returns and claiming eligible expat tax benefits may reduce the amount owed.

Unresolved back taxes can lead to IRS collection action, payment demands, tax liens, and, in serious cases, passport restrictions.

Common questions

1. What are back taxes for U.S. expats?

Back taxes are overdue taxes from previous years that remain unpaid to the IRS or a state tax authority.

2. Can U.S. expats owe back taxes if they paid tax in another country?

Yes. Paying foreign tax does not automatically remove U.S. tax liability. Eligible expats must claim relief such as the Foreign Tax Credit on a U.S. tax return.

3. How can U.S. expats find out whether they owe back taxes?

They can review IRS notices and account transcripts or prepare any missing returns to determine the correct balance.

4. Are back taxes the same as unfiled tax returns?

No. An unfiled return is a missing filing, while back taxes are unpaid tax liabilities. A taxpayer may have one or both problems.

5. Do penalties and interest accrue on back taxes?

Usually. Interest runs from the original payment deadline, and failure-to-file or failure-to-pay penalties may also apply.

6. Can the Foreign Tax Credit or Foreign Earned Income Exclusion reduce back taxes?

Potentially. Eligible taxpayers may claim these benefits on qualifying prior-year returns, subject to the rules for late elections and amended filings.

7. Can U.S. expats use the Streamlined Filing Compliance Procedures to resolve back taxes?

Eligible non-willful taxpayers may use the procedures to correct certain offshore filing failures. Tax and interest remain payable, although some penalties may be waived.

8. Can U.S. expats set up an IRS payment plan for back taxes?

Yes. Taxpayers who cannot pay in full may qualify for an installment agreement that allows them to pay over time.

9. Can unpaid back taxes affect a U.S. passport?

Yes. The State Department may deny, revoke, or restrict a passport after the IRS certifies a seriously delinquent federal tax debt.

Related forms

• Form 1040: Filing a U.S. tax return from abroad
• Form 9465: Requesting an IRS installment agreement
• Form 14653: Using the Streamlined Foreign Offshore Procedures

When to get help

Consider professional advice if you:

• Have not filed one or more required U.S. tax returns.
• Received an IRS notice or collection letter.
• Cannot determine how much tax, interest, or penalties you owe.
• Need to claim expat tax benefits on a prior-year return.
• Cannot pay the full balance immediately.
• Are unsure whether your non-compliance was willful or non-willful.
• Are concerned about liens, levies, or passport restrictions.

Bright!Tax can prepare missing returns, assess available penalty relief, and help you choose the appropriate route back into compliance. Get started with Bright!Tax.

Related Bright!Tax guides

• Need to File U.S. Taxes Late? What Expats Need to Know
• What Happens If You Miss the Tax Deadline?
• What to Do If You Have Never Filed a U.S. Tax Return
• Streamlined Filing Procedures: A Step-by-Step Guide

Official sources

• IRS: Filing past-due tax returns
• IRS: Payment plans and installment agreements
• IRS: Streamlined Filing Compliance Procedures
• IRS: Penalties and interest

Reviewed by

Katelynn Minott, CPA & CEO

Last reviewed

June 2026