Internal Revenue Service
U.S. taxpayers living abroad must report income, pay taxes in accordance with the Internal Revenue Code
Date: January 23, 2023
WASHINGTON — Tax season takes place January 23 through April 18, and IRS Criminal Investigation (IRS-CI) reminds U.S. citizens and green card holders living abroad to follow the same rules for paying taxes as if they were residing in the U.S.
U.S. taxpayers are subject to tax on worldwide income from all sources and must report all taxable income and pay taxes according to the Internal Revenue Code.
Taxpayers residing abroad, including those who are on military duty outside the U.S., are permitted an automatic two-month extension – until June 15 – to file their tax return.
The IRS urges everyone to file their return electronically this year, and if they have a U.S. bank account, choose direct deposit for any refund. Taxpayers living abroad can electronically file or mail their U.S. tax return.
Many Americans living abroad qualify for special tax benefits, such as the foreign earned income exclusion and foreign tax credit, but they can only get them by filing a U.S. return. For further details, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on IRS.gov.
U.S. taxpayers who own foreign financial accounts must report those accounts to the U.S. Treasury Department, even if the accounts don’t generate any taxable income. Taxpayers should file a Report of Foreign Bank and Financial Accounts (FBAR) electronically by April 18, 2023, using the BSA E-Filing System. Visit IRS.gov for more information about reporting foreign financial accounts reporting foreign financial accounts.
U.S. taxpayers must also report virtual currency transactions to the IRS on their tax returns; these transactions are taxable by law just like any other property transaction. Find more information about virtual currency income on IRS.gov.
Taxpayers found to be committing fraud may be subject to penalties including payment of taxes owed plus interest, fines and jail time.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, boasting a more than 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.