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IRS Continues Auditing More US Expats
The 2018 IRS Tax Book reveals that US Expats remain more likely to be audited

Published on June 10, 2019

The IRS recently published its 2018 Tax Book, detailing statistics on the organization's activities in relation to US Tax Returns for 2018. Reviewing the data, US Expat Tax firm Bright!Tax has reported that the information "has confirmed that the IRS continued the trend of auditing a much higher proportion of international tax returns then domestic ones in 2018".

The report notes that "while a total of 0.6% of all individual federal income tax returns were audited during the year, the figure for international returns is nearly six times the overall average, at 3.4%, representing one in every 29 expat tax returns". Bright!Tax explain that this marks a drop on the previous year's statistics, which indicated that in 2017, "5.2% of tax returns filed from abroad were audited".

With June's extended tax deadline for expats fast approaching, the findings reiterate that the IRS has a particular focus on tax compliance for Americans living and earning overseas. June 15 usually marks the extended tax deadline for American expats, although as June 15 is a Saturday this year, the return deadline will be Monday June 17. Bright!Tax advise that "While expats can avoid any problems even if they are audited by ensuring that they file accurately, completely, and on time, expats who do receive an audit letter from the IRS should firstly look closely at what the IRS requires. In many cases it may just be some additional supporting documentation."

The firm goes on to explain that for those overseas Americans who have received an audit letter, "A notice number in the top right hand corner of the IRS letter may indicate the issue. Expats who have to meet with an IRS representative should consider employing a tax attorney to accompany them, and in all scenarios expats should be calm, helpful and courteous whenever dealing with the IRS.

The report comes amidst continued focus on a move to a Residency Based Taxation for Americans living overseas. Last week, Congressman Jamie Raskin issued a statement to the House Ways and Means Committee describing double taxation of overseas Americans as "outrageous".

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