Americans living abroad are required to file a US tax return every year, reporting all of their global income. No other developed nation requires expats to file in this way.
American expats often have to file a foreign return too, and understand how the two different tax systems converge.
Furthermore, expats are subject to additional US reporting requirements relating to foreign registered financial accounts, investments, assets, trusts, and businesses. In the age of digital international finance, the IRS can verify the information that expats provide when they file, as well as see what (if anything) hasn’t been reported.
Most expats don’t end up owing any US tax, as they can claim the Foreign Earned Income Exclusion or the Foreign Tax Credit when they file. If they don’t file and claim these provisions though, then they are considered to owe US tax on their worldwide income.
Expats with complex finances often seek the assistance of an expat tax attorney, to minimize tax payable, and avoid penalties. In particular, expats who wish to implement legal structures to minimize taxes payable, and expats who have been contacted by the IRS and require assistance responding, benefit from employing an expat tax attorney.
The majority of expats on the other hand, including expats who are behind with their US tax filing, won’t benefit from employing an expat tax attorney rather than an expat tax specializing CPA when filing their US taxes from abroad, however complex their finances.
How to choose an expat tax attorney?
The critical factors to consider when choosing an expat tax attorney are their experience with the issue that you require assistance with, and their track record of success.
It’s both appropriate and right to ask them about their experience in depth, and to ask for references from their past clients. They should also confirm their fees up front.
The top five expat tax attorneys in 2020
“If you are a U.S. citizen or resident alien, your worldwide income is subject to U.S. income tax, regardless of where you reside.” – the IRS
1 – Philip Hodgen (https://hodgen.com/)
Philip Hodgen established Hodgen Law back in 1991 to provide international tax advice. Having lived abroad in both South Africa and New Zealand previously, he has international experience as well as legal expertise. He also provides a wealth of first-rate international tax information on the Hodgen Law website.
2 – Stewart Patton (https://ustax.bz/)
Based in Belize, Stewart specializes in helping American expats around the world in structuring their offshore businesses and investments so as to legally minimize tax. With over 15 years of experience, Stewart offers both prepackaged services and individual consultations.
3 – Sean and Jenny Kay Golding (https://www.goldinglawyers.com)
Sean and Jenny Kay have a combined 35 years of experience helping Americans with international tax compliance issues. They specialize in helping Americans with complex situations become compliant, whether they have or haven’t already been contacted by the IRS.
4 – Monte Silver (https://www.silvercolaw.com/)
Monte helps Americans abroad with compliance issues, and particularly American expat business owners. Monte has achieved a measure of fame in the expat community recently due to his ‘David and Goliath’ lawsuit with the IRS seeking to overturn two taxes (GILTI and the Transition Tax) on foreign registered business income that were introduced as part of the 2017 Tax Reform.
5 – Anthony Verni (https://www.vernitaxlaw.com)
Anthony has 20 years experience representing Americans and American-owned businesses in compliance and tax cases with the IRS. Anthony can help in any and every situation, however challenging, including criminal prosecution cases.
The vast majority of expats can become and remain compliant with their US tax filing and reporting with the assistance of an expat tax specialist CPA firm, rather than an attorney. This includes the many Americans who have missed filing one or more US tax returns from abroad, who may qualify for an IRS amnesty program such as the Streamlined Procedures.
Employing an expat tax attorney is advisable in certain circumstances though, most often for expats with complex financial situations in terms of offshore assets, accounts, and investments who either want to more efficiently structure their holdings, or who have been contacted by the IRS.