Expat Tax Online

10/06/2026

Tesha has trusted us with her US expat taxes for the past two years, and that means a lot.

Clear communication. Ongoing support. A straightforward filing experience.

That's what we strive to deliver for every client, every year.

Thank you, Tesha, for your trust in our team. We look forward to helping you again next filing season.

Looking for a tax team you can count on year after year? Contact us today 👇
https://www.expattaxonline.com/contact/

10/06/2026

Last year, Lily came to us in a panic.

Lily renounced her US citizenship in 2023.

A friend planning to renounce asked her who she used to do all the “IRS paperwork”.

“What IRS paperwork?”
“You know, your last tax return, the dual status one, the FBAR, 8854 etc.”
“I don’t know what you’re talking about.”

Lily had never heard of an 8854.
Nobody at the embassy mentioned it.
It wasn't on any of the paperwork she signed.

Lily started to panic and started searching.

Then came the second blow.

She should have filed Form 8854!

And, there's a $10,000 penalty for not filing Form 8854 or filing it late.

Bring two years late, Lily didn't want to file at all.

"If filing it means I get a $10,000 penalty, why would I? The IRS haven’t contacted me."

It's a fair question. And one I hear more than you'd think. There are many reasons to officially close the door with the IRS.

We looked at the IRS Relief Procedures first.

For certain former citizens, the IRS has a formal relief programme that can wipe everything clean.

You must file 5 years of back tax returns, plus a final tax return — there's no escaping that part.

But if your total tax liability across those 6 years is $25,000 or less, it's written off completely.
All penalties waived.
The $10,000 Form 8854 penalty gone.

If you owe more than $25,000, you don't qualify — the Relief Procedures are closed to you.

But Lily had filed a 1040 for 2022. That ruled her out.

Important note: filing a 1040-NR does not exclude you from the Relief Procedures.

That left us one option.

Reasonable Cause.

Under US tax law, the IRS can waive a penalty if you can show your failure to comply was due to reasonable cause — and not wilful neglect.

In plain English: "I had a genuine reason. I wasn't ignoring it on purpose."

Lily's case was strong.
✔ The State Department said nothing about Form 8854 at her renunciation appointment
✔ It appeared on none of the documentation she received
✔ The moment she became aware, she came to me immediately

That last point matters enormously.

Wilful neglect means you knew — and deliberately ignored it.

Lily didn't know.

And the moment she did, she acted.

That is the opposite of wilful neglect.

We built her Reasonable Cause statement covering all the important points of our defence

We submitted the late Form 8854 with the Reasonable Cause statement attached.

The $10,000 penalty was not issued.

𝗛𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆:
A late Form 8854 does NOT automatically make you a Covered Expatriate — your historic facts determine that, not your filing date.

Reasonable Cause is a real and effective defence — but it has to be built properly.

And the IRS looks differently at someone who comes forward voluntarily versus someone who waits for a notice.

If you renounced and never filed Form 8854 — you are not out of options.

Get professional help.

Get safely and completely out of the US tax system — on your terms, not theirs.

09/06/2026

💡 Did you know the IRS classifies foreign trusts into two types? And getting that classification wrong can have serious tax consequences for US expats.

When it comes to foreign trusts, the IRS focuses on two categories: foreign grantor trusts and foreign non-grantor trusts.

The key question is always whether it qualifies as a grantor trust. The term grantor is typically used as the owner of the trust. But making that classification requires a deeper dive.

The IRS looks at:

• Who has contributed to the trust
• Who has set up the trust
• Who has the powers to beneficially enjoy the assets of the trust
• Those people that can maybe add or remove trustees from the trust

There is no one hard and fast rule. You are taking everything into consideration to determine whether or not that person can be considered the grantor of the trust and by definition the owner of the trust.

For US expats in Australia with ties to a discretionary trust this distinction matters more than most people
realize.

For more expat tax tips, find us on YouTube 👇
https://www.youtube.com/playlist?list=PLu5UUaGUmvyRsHBDljhpVN4rfTmFDcAUS

09/06/2026

A Treasury audit found that 16,798 people who renounced US citizenship never filed Form 8854.

That's 41% of all CLN holders in the period reviewed.

How does that even happen?

The psychology of the herd.

"I know loads of people who renounced and never did the IRS paperwork.
Nothing happened to them. So why would I bother?"

And so the next person didn't file.
And the next.
And the next.

That's how you get 16,798 people.

A herd of former citizens, all watching each other, all assuming silence from the IRS meant safety.

It didn't.

It meant the IRS was building a list.

And then there are the keyboard "heroes".

In every Facebook group and Reddit thread on renunciation, there's always someone.

"You don't need to file anything. The IRS can't touch you once you've renounced."

"Form 8854 is just the tax industry trying to scare you. Don't fall for it."

"I renounced 5 years ago, filed nothing, nothing happened. Trust me."

No qualifications.
No liability.
No skin in the game.

Just confident, wrong advice — given freely to thousands of people who desperately wanted to hear it.

Here's what's actually happening.
When you renounce, the State Department issues your Certificate of Loss of Nationality (CLN).

The IRS expects a matching Form 8854 — the form that officially exits you from the US tax system and certifies 5 years of compliance.

No 8854? You're on the missing filer list.

The IRS now openly states it is sending notices to expatriates who did not comply with Form 8854 requirements — and imposing the $10,000 penalty where appropriate.

The CLN list and the 8854 filing list are being compared.

The gaps are being contacted.

If you never filed 8854, here's the real problem.

Without it, you can be treated as a Covered Expatriate by default.

That means three things that should keep you up at night:

⚠️ Exit Tax (Section 877A)
The IRS treats you as if you sold every worldwide asset the day before you renounced. Tax is due on the unrealised gains above the exemption.

⚠️ 40% Tax on Gifts and Inheritance to Your US Kids (Section 2801)
Any gift or inheritance you leave to your US citizen children can be taxed at a flat 40% — paid by them, not you. New IRS Form 708 is now in place to collect it.

⚠️ $10,000 Penalty
For failing to file Form 8854 or filing it incorrectly, unless reasonable cause can be shown.

"You thought you were done when you walked out of the embassy."

No. On the tax side, you may have just become a Covered Expatriate — with exit tax exposure, a 40% shadow hanging over everything you leave your children, and a penalty notice on its way.

All because one form was never filed.

Fix this voluntarily before the IRS contacts you.

Get professional help, get compliant, and get safely out of the US tax system.

08/06/2026

𝟱 𝘁𝗵𝗶𝗻𝗴𝘀 𝗽𝗲𝗼𝗽𝗹𝗲 𝗴𝗲𝘁 𝘄𝗿𝗼𝗻𝗴 𝗮𝗯𝗼𝘂𝘁 𝗿𝗲𝗻𝗼𝘂𝗻𝗰𝗶𝗻𝗴 𝗨𝗦 𝗰𝗶𝘁𝗶𝘇𝗲𝗻𝘀𝗵𝗶𝗽
(𝘕𝘶𝘮𝘣𝘦𝘳 3 𝘴𝘶𝘳𝘱𝘳𝘪𝘴𝘦𝘴 𝘢𝘭𝘮𝘰𝘴𝘵 𝘦𝘷𝘦𝘳𝘺𝘰𝘯𝘦)

❌ Myth 1: "You'll have to pay exit tax."
✅ Reality: The exit tax only applies if your net worth exceeds $2 million — or you fail the covered expatriate tests.
Most accidental Americans in the UK don't come close.
For most people, the exit tax is $0.

❌ Myth 2: "It costs a fortune."
✅ Reality: The renunciation fee dropped from $2,350 to $450 in April 2026.
Professional fees to prepare your US tax returns start from $300 per year.

❌ Myth 3: "You can never visit the US again."
✅ Reality: You enter as a visitor — just like many nationalities can.
Thousands renounce every year and visit the US without issue.

❌ Myth 4: "You just renounce and you're done."
✅ Reality: You must be tax compliant and exit the tax system safely.
Renounce without doing this and you risk an exit tax you don't actually owe. If you have US children, you'll can cause havoc for them.

❌ Myth 5: "I'll lose my Social Security payments."
✅ Reality: No, you won't.

Get it wrong and the penalties can be crushing.

This is not a DIY job.

The good news: for the right person, renunciation is genuinely life-changing.

No more annual US filing. No PFIC headaches. No FBAR stress. No bank letters.

Just your life, lived without the IRS looking over your shoulder.

But it has to be done right.

Any other myths you've heard that aren't on this list? 👇

08/06/2026

Where do Americans abroad go when they have US expat tax questions?

Right here. The Expat Tax Online Help group is a free Facebook community built specifically for US citizens and Green Card holders living outside the United States. Whether you are trying to figure out if you need to file, confused about FBAR, or just moved abroad and have no idea where to start, this is the place to ask.

With over 12,440+ members, the Expat Tax Online Help group is a free Facebook community built specifically for US citizens and Green Card holders living outside the United States.

Whether you are trying to figure out if you need to file, confused about FBAR, or just moved abroad and have no idea where to start, this is the place to ask.

With thousands of members from all over the world, you are guaranteed to find someone who has been through exactly what you are dealing with. Real people, real answers, no judgment.

Join us today and be part of the conversation: 👇
https://www.facebook.com/groups/expattaxonline

04/06/2026

Did you know most Americans abroad don't even realize they still have to file US taxes?

The IRS Streamlined Tax Amnesty Program is designed to help US citizens and Green Card holders abroad who have fallen behind on their US tax obligations. It's a simple, penalty-free way to catch up and stay compliant.

In a nutshell, you only have to file your last three years of tax returns, no matter how many years you've missed, and six years of FBARs. The key requirement is non-willful conduct, meaning you genuinely didn't know you still had US filing obligations while living overseas.

Over 60,000 people have already caught up on their US taxes via the Streamlined Tax Amnesty program.

Want to see whether you qualify? Check out the IRS Streamlined Tax Amnesty Program Complete Guide 👇
https://www.expattaxonline.com/streamlined-tax-amnesty-filing/

04/06/2026

Presidents, politics or FATCA?

What's really driving thousands to abandon US citizenship?

Every time I share data like this, someone says "it's Trump" or "it's Biden."

Look at the chart.

Green bars. Red bars. Blue bars. Red bars.

Four presidents. Two parties. Sixteen years.

The numbers keep climbing regardless.

Here's what I think is actually driving it — and it has nothing to do with who's in the White House.

A few things stand out in the data:

→ 2014 is the real turning point. That's when FATCA was fully enforced — requiring every bank on earth to report US citizens' accounts to the IRS or face being cut off from the US financial system. Most banks chose the easier option: stop serving Americans abroad.

→ 2020's record of 6,705 was set despite consulates being closed for most of the year. One embassy in Switzerland had 400 people on the waiting list. The true demand was far higher than the numbers show.

→ 2021's dip isn't a reversal — it's an illusion. Consulates were still largely shut. The demand never went away. It just couldn't be processed.

→ 2026 is on track to shatter the record. Q1 alone: 1,462 — before the renunciation fee dropped from $2,350 to $450 in April. First time ever that demand is high and barriers are genuinely low.

So — presidents, politics or FATCA?

Drop your take in the comments. I'll share my answer (rant) below. 👇

Source: IRS Federal Register quarterly expatriate list · 2026 figure projected*

03/06/2026

🤔 Are you an American living abroad? Your taxes are more complicated than you think.

Most Americans overseas assume their tax situation is simple — until it isn't.

The truth? The US taxes based on citizenship, not residency. That means even if you owe nothing, you may still have filing obligations — including FBAR, FATCA, foreign pensions, and more.

Here's what the guide covers:
✅ When DIY software is enough and when it becomes risky
✅ What expat tax services actually cost in 2026
✅ The red flags to watch for before hiring anyone
✅ Which situations require a specialist (and which don't)

Whether you're a freelancer abroad, a foreign business owner, or someone who hasn't filed in years, the right service depends on your situation.

Read the full guide here 👇
🔗 https://www.expattaxonline.com/best-expat-tax-services-for-americans-abroad-in-2026/

03/06/2026

A funny for Wednesday

An Ode to FATCA (Or: Why Being Born American is Ruining My Wednesday) I moved to the UK when I was just three, I've got a British passport, I drink PG Tips tea. I pay my UK taxes, I queue without complaint, But one thing keeps haunting me — and it's driving me quite faint. I was born in Boston. Ju...