Suppose I am a 34 year old US citizen. Suppose I graduated from college when I was 24 and I worked in the USA for the following 10 years. Now I move to country A, I get a job in country A, I become a citizen of country A, I plan to retire in country A, I do not own any asset in the USA and I never want to live in the USA again.

Question 1: Why should I file a US tax return every year?

Question 2: What will happen if I never file a US tax return again?

Thank you.

Answer 1: Because it's the law.
Answer 2: You'll be hunted down by the IRS like Leona Helmsley and locked away in Camp Cupcake like Martha Stewart, or assassinated like al-Awlaki.

Because you are required to do so by law.

Nothing will happen as long as you don't set foot on US soil again. Otherwise you might be detained at border control if you are identified as a tax evader.

You are legally obliged to file taxes each and every year, no matter where you live, if you wish to retain your citizenship. Given the FACTA dragnet, I wouldn't recommend just not filing and hoping you don't get caught. If you haven't been filing over the last ten years, you're liable for the last 7 and, should you be brave enough to google 'FACTA expat IRS penalties', that should explain why. You're only option is to renounce if you don't want to file taxes yearly.

That's not entirely true if I am to understand what the ramifications of FACTA are. If the IRS wants to pursue you, they will and it won't be much fun. Two kinds of people you don't mess with...immigration and tax folks as both can make your life a living hell with very little effort.

I am not 34 years old and I am not a US citizen. But let's continue the game anyway. Let's say we are talking about Joe.

Everything is true except for a few major details.

So Joe left the USA in the summer of 1993.
He filed a US tax return for the year 1993 because he had worked in the USA during the first half of 1993 and he has a good conscience.

Now Joe has not filed a US tax return since 1993.
That's like 18 or 19 years!
He has gone back to the USA on numerous occasions (on average once a year) and he has never run into any problem.
Actually, since he's become a citizen of country A, he has travelled to the USA with his Country A passport... which might be against US law...

Ok. Joe wants to come clean.
Can he?
(His income in country A has always been below 100K)

If what you said is true that you "never want to live in the USA again," why don't you just make an appointment with the US Embassy in Bern and give up your citizenship?

FACTA: Wiki

If he's a citizen of another country, (depending on which country of course), as far as I am aware they can't do shizzle It just means that he will live his life as a fugitive

If you never plan to go to the US again, dump your US citizenship, problem solved (unless your tax laibility in previous years is above $150k or so, or have assets above a certain amount, in which case you need to continue filing for a few years).

Tom

There is no filing deadline for income tax return under US laws if you do NOT owe any tax. So, do a few returns for all the years Joe was supposed to file income tax and see what comes up. If he had no liability in all years, then just file all the return and he'll be clean

Ummm, it's FATCA!

Tom

Yes, you might (or might not) be fined. You can easily ask the IRS these kinds of questions. You would have to refile for the 'forgotten' years. It doesn't matter if you earn no income, you still have to file.

I don't know the entire story about Joe but, yes, he's in some serious shiite particularly for entering the US under a passport other than the US passport (seriously, as a dual holder myself, it can get complicated but the penalties are very serious if you get busted so I stay within the lines). As for non-filing...still, I recommend Joe speak with a good tax lawyer as there was an amnesty program me offered before FACTA got rolled out but that has passed and the hunting has begun. I don't know what kind of paper trail he's left in CH but...chances are, they will catch up eventually. Good luck to Joe.

Geez, and here I am panicking over forgetting to file a visa form for the green card before leaving the US thinking of all the worst-case issues....

They won't let you give up your american citizenship until your tax liability has been taken care of....

LOL...I always wondered if was dyslexic. I think I like FACTA better as FATCA just makes me think of fat californians....

It's the 21st Century. Neary every valid passport has an eChip. Those that don't are expiring. Immigration systems are linked globally. If you're a USC and you try to enter under another nationality... you WILL get caught. I guarantee it.

As I said, I am not Joe and I am not a US citizen.
Joe is a US citizen (as well as a citizen of Country A).

It is true that I never want to live in the USA again, but Joe might want to go back some day. Thus Joe should file for the last 18 years!!!! Joe paid lots of income tax in Country A and Joe never made more than 100K per year. We strongly believe that Joe has no US tax liability.

So Joe should download 18 years of tax forms, fill them all and send them to the IRS. I'd like to see the face of the IRS agent who will open the envelope...

Does "Joe" remember his SSN?
Job security.

Nonsense.
Absolute nonsense.
My kids have Canadian passports and USA passports. They always travel with their Canadian passports, whether they are going to Europe or to the USA. They never had any problem. Same when they drive from Canada to the USA.

But to be on the safe side, I will advice them to use their US passports when they go to the USA...

I think this all depends on Joe's appetite for risk taking

I mean if you wanna be straight with the IRS, Joe needs to file his taxes, if he wants to take the risk for whatever little amount he might owe than that's Joe's choice.