You moved to another nation/give up your citizenship, can the IRS still get you?

[Anonohmon]

So, apparently from my understanding, is if you want to avoid paying taxes, the only option is to move to another nation. And, you have to give up your citizenship to the USA, because as a citizen, the gov would still expect you to pay even if you live in another nation and are a citizen there. If you still have US citizenship, they will want you to pay.  

So, with that being said, if they think you should have paid something, would they try coming after you if you're in another nation and are no longer a citizen?

I really suppose it depends on which nation.

Like Germany or the UK vs Belarus or Russia.

I'm sure Russia, maybe Belarus would tell the USA to "kindly fuck off" if the USA was like "hey, can you kindly ask one of your new citizens to give us money please or hand them over so we can lock them in prison please thanks? "

But would Germany or the UK or any of the US allies? If the US said they have suspicion that one of their new citizens, might owe taxes on crypto currency.


Keeping in mind, you are now paying the new countries asked taxes for whatever they say they want and are not violating any of their laws.

I might be overthinking this but I'm asking for a friend. This friend which is definitely not me, doesn't even know if they "owe" anything or not but doesn't think they do since they had a ton of losses and didn't make much of anything.... and it's impossible for them to really find that out as they didn't keep records of every little petty trade they made. And the IRS being unforgiving, even if you owe 5 cents, will then charge interest every day for these small cents you owe, and then try to arrest you or at very least take all your stuff over a few dollars of taxes that is clearly an unintentional error.

So the person doesn't know, the IRS might not ever know, but if they did ask. I'm just wondering the likelihood of a nation handing over a new citizen to a nation of which they are no longer a citizen of?

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[Mbitr]

The US tax system is pretty unique and if you want to avoid paying any taxes in the US after you ‘leave’ you will have to pay an ‘exit tax’ to the IRS.

If you are a citizen of the US, but living/working abroad your income will still be subject to US Income tax laws.
The only way around this is to renounce US citizenship and pay ‘ an exit tax’ !!

https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-about-international-individual-tax-matters

[zasad@]

I can remind you of a story about a Russian businessman who was a US citizen and broke the law. He then did not have time to change citizenship and failed the deal as a US citizen, but forgot to pay taxes.
Oleg Tinkov will pay a $ 506 million fine for the settlement of tax claims in the United States
https://time.news/oleg-tinkov-will-pay-a-506-million-fine-for-the-settlement-of-tax-claims-in-the-united-states/
This is the founder of one of the largest banks in the Russian Federation - Tinkoff Bank

[odolvlobo]

Consider the plight of a child born to parents who were in the U.S. temporarily (legally or not). That child is a U.S. citizen, whether they want to be or not, and they must pay U.S. taxes.

Furthermore, if the person opens an account at a bank and the bank finds out that they are a U.S. citizen, it will pass their information to the IRS.

In addition, the person may not be able to open a bank account because many banks do not allow U.S. citizens to have accounts.

[avikz]

It depends on couple of things,

1. Which country you are moving in and if that country is an ally of US or not.
2. If you have taken up dual citizenship or completely given away US citizenship. If dual citizenship is active, you still have to pay taxes based on the certain number of days you have stayed in US
3. If the country is not an US ally, do they any agreement for handing over criminals/frauds made in US. A lot of countries actually do have this in place
4. How much money you actually owe to IRS

It's best to consult with a criminal lawyer specialized in financial  crime.

[Anonohmon]

The US tax system is pretty unique and if you want to avoid paying any taxes in the US after you ‘leave’ you will have to pay an ‘exit tax’ to the IRS.

If you are a citizen of the US, but living/working abroad your income will still be subject to US Income tax laws.
The only way around this is to renounce US citizenship and pay ‘ an exit tax’ !!

https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-about-international-individual-tax-matters

I'm assuming an exit tax is only applicable in the event you actually have money in a bank or some sort of financial institution.

[Anonohmon]

To give more info.

My friends situation is that they have no idea how much money they owe, the IRS does not know about this money because it's simply potential taxes owed during anonymous crypto trades, maybe. As far as the gov is concerned, they owe nothing because they aren't aware that anything even exists.

However, if in the future, crypto makes lots of holders now millionaires, in order to cash out, tons of money would be owed, that's not the problem. The problem lies in when the gov says "how did you get all of this" and it's stated that it was bought during the bear market (like this current one, and this is a hypothetical for the future) BUT you can't prove what you bought from it, and you might have owed money from like kind crypto trades.

So... because of that, and the fact the IRS is out to get innocent people just trying to make it out of poverty. The only solution is to revoke citizenship and move to another nation if crypto ever makes one a millionaire because they wont just accept you paying them taxes they ask for and move on. they'll try to make it like you're a criminal and you have to risk going to prison if you lose a legal battle at worse, or, pay crap tons of fees at best.

[Mbitr]

I'm assuming an exit tax is only applicable in the event you actually have money in a bank or some sort of financial institution.

This form may help - 8854

https://www.irs.gov/pub/irs-pdf/f8854.pdf

I’m no US tax expert by any means, by have a look at this form- it may give you a few answers?

[odolvlobo]

I'm assuming an exit tax is only applicable in the event you actually have money in a bank or some sort of financial institution.

You must pay tax on unrealized capital gains on all property if your income or net worth are above certain thresholds.

https://www.irs.gov/individuals/international-taxpayers/expatriation-tax

[Findingnemo]

To give more info.

My friends situation is that they have no idea how much money they owe, the IRS does not know about this money because it's simply potential taxes owed during anonymous crypto trades, maybe. As far as the gov is concerned, they owe nothing because they aren't aware that anything even exists.

If the trades associated with any if the centralized exchanges then IRS will know about the earnings made through the cryptocurrency so you have to pay whatever the tax needs to be paid or else you ( friend) will be in trouble because on many occasions US forced many tax evaders who moved to EU to handover them to US because they committed tax evasion but the scenarios or different when people moved from other countries especially from 3rd world countries EU government denied the request of respective governments.

If the person has to move to another country yet then its better to consult the financial advisor who may guide better because they know the laws and probably the loopholes if there is any.

[Poker Player]

I'm assuming an exit tax is only applicable in the event you actually have money in a bank or some sort of financial institution.

You must pay tax on unrealized capital gains on all property if your income or net worth are above certain thresholds.

https://www.irs.gov/individuals/international-taxpayers/expatriation-tax

Apart from that, his friend should be taxed for the trades made.

To give more info.

My friends situation is that they have no idea how much money they owe, the IRS does not know about this money because it's simply potential taxes owed during anonymous crypto trades, maybe.

OP, what you comment has already been discussed in other threads, and it is not a rare situation. There were people who got Bitcoin when it was worth little and now find they have a large capital.

I already commented that it is preferable to act before the capital becomes very large because when it is already large and you have no way to prove where it comes from you run into a problem, and the solutions are two:

1) Pay lawyers and tax advisors to help you to legalize it, which will have high costs and you cannot trust 100% that you are not going to have problems with the justice.
2) Go to another crypto-friendly country, which also has costs. It also has emotional implications.