Almost every day I’m asked the following question. “What if I just left the country? The IRS is so hard to deal with and I owe them so much tax, maybe I oughta just leave.” Usually such a comment is more the product of exasperation and frustration, but I wanted to take the time and answer it here.
Leaving the United States to avoid your tax problem is not an option. Americans are taxed on their world wide income. That means if you retire to Panama and live on your Social Security and you get some sort of job while there, you have to pay tax to the United States. That means the IRS.
That’s not the only issue. The IRS would likely issue a levy on your Social Security earnings and may even take further steps to locate and seize other assets in the U.S. I have even handled cases for foreign diplomats who temporarily resided in the U.S.; failed to file U.S. non-resident tax returns and were then being pursued by the IRS after moving back to their home country. One case that comes to mind, the client was living in Africa and the IRS was still chasing them!
I ran across a nice blog by a gentleman by the name of Mark Nestman. He has a nice asset protection article dealing with some of the same issues discussed in this post. Go check it out. If you have problems with the IRS and want help, give us a call tollfree at (888) 438-6474. We represent taxpayers throughout the United States.