IRS Penalties for #Expats

Summary

The United States has a unique tax system that requires citizens and green card holders to file and pay taxes annually, regardless of their global location. This citizenship-based taxation differs from most other countries' residency-based approach and carries significant financial consequences for non-compliance. Failing to file a US tax return can result in penalties from the IRS, including a 5% charge on unpaid taxes per month, potentially escalating to a maximum 25% penalty. Expatriates and US citizens living abroad must be aware of these obligations to avoid substantial financial repercussions.