Who is a U.S. citizen and what are the tax filing implications for a non-resident?
If you don’t reside in the U.S., you may still be a U.S. citizen even if you have never claimed citizenship status and never registered as one. As a non-resident U.S. citizen, you have tax filing requirements each year.
Under U.S. immigration rules, you are a U.S. citizen if any of these conditions apply:
- You were born in the U.S.
- You were born outside the U.S. but both of your parents are U.S. citizens.
- You were born outside the U.S. after November 14, 1986 and one of your parents is a U.S. citizen who resided in the U.S. for five years (two of which were after that parent’s 14th birthday).
- You were born outside the U.S. before November 14, 1986 and one of your parents is a U.S. citizen who resided in the U.S. for ten years (five of which were after that parent’s 14th birthday).
As a non-resident U.S. citizen, you have tax filing requirements to report your non-U.S. investments and holdings. These tax filing requirements include:
- Form 114 Report of Foreign Bank and Financial Accounts (FBAR) - to report combined non-U.S. bank account balances in excess of $10,000.
- Form 3520 Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts - required to report your interest in a non-U.S. Trust.
- Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations - required to report your ownership of a non-U.S. private corporation.
- Form 8865 Information Return of U.S. Persons With Respect to Certain Foreign Partnerships - required to report ownership of a non-U.S. partnership.
- Form 8621 Information Return by a Shareholder of a Passive Foreign Investment - required to report ownership of non-U.S. mutual funds.
Failure to comply with these tax filings may result in penalties of $10,000 per year per form. There are delinquent filing submission procedures available to become compliant with late filings.
If you would like more information on your tax filing requirements as a non-resident U.S. citizen, please contact us.