EK: is the potential tax liability too great for US pilots?
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EK: is the potential tax liability too great for US pilots?
Attached is a link to an article from today's National newspaper.
It details the tax liability of US citizens living overseas.
US pilots are further at risk as the IRS are auditing American pilots at Emirates one by one. It looks as if the IRS has a copy of the EK seniority list detailing nationality and rank, date of hire.
Uncle Sam’s demands on tax go far and wide | The National
It details the tax liability of US citizens living overseas.
US pilots are further at risk as the IRS are auditing American pilots at Emirates one by one. It looks as if the IRS has a copy of the EK seniority list detailing nationality and rank, date of hire.
Uncle Sam’s demands on tax go far and wide | The National
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Not sure what you mean with the potential tax liability being too great
The tax responsibility as a US citizen hasn't changed at all! It is the same as it always has been, as a matter of fact, the amount of money that you can deduct for the tax exemption has been increasing steadily.....! This is very simple, don't cheat on your taxes, declare your foreign accounts to the IRS, don't pretend to be smarter than everyone else, have a professional that is well versed into foreign income do your taxes and there will be no issue
The tax responsibility as a US citizen hasn't changed at all! It is the same as it always has been, as a matter of fact, the amount of money that you can deduct for the tax exemption has been increasing steadily.....! This is very simple, don't cheat on your taxes, declare your foreign accounts to the IRS, don't pretend to be smarter than everyone else, have a professional that is well versed into foreign income do your taxes and there will be no issue
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BTW....., this is NOT only for US citizens, citizens from all western countries should expect similar additional scrutiny from their governments on the issue of income earned abroad......!
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BTW....., this is NOT only for US citizens, citizens from all western countries should expect similar additional scrutiny from their governments on the issue of income earned abroad......!
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Here's the bread and butter from the US IRS on expat income. It's actually pretty straight forward. There's no secrets about it. As mentioned above, it's when you try to pull a fast one on the government that you actually start getting tangled up on grey areas and such.
IRS Publication 54.
The whole document is a good read (mandatory read if you are a US expat, IMHO), but pay special attention to Chapter 4 - Foreign Earned Income Exclusion/Deduction.
IRS Publication 54.
The whole document is a good read (mandatory read if you are a US expat, IMHO), but pay special attention to Chapter 4 - Foreign Earned Income Exclusion/Deduction.
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The USA fought the War of independence, much in order to avoid paying tax to the UK, and yet now it taxes its citizens whom work overseas; whereas the UK does not. The irony should not be lost upon us. :wrygrin:
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While it is a stress inducing thought to be audited by the IRS, I'm speculating that the guys who file with 'reasonable' (subjective obviously) numbers will be okay...
There are however US passport holders who have another national identity (& passport) closer to their heart who do not file at all...or materially understate their earnings....this is low hanging fruit ...and has extremely serious consequences for those individuals. We are talking about a felony offense., big fines etc.
It's gets interesting if and when you do get audited - if you lie to a Federal Officer - now you are talking about jail time.
What has probably brought this about (I have heard that they had a team from the IRS in payroll for two weeks in March) - is that if you do get audited, which has happened to EK pilots - there is a system whereby if you are in a spot of trouble you can mitigate the punishment by providing information to the IRS that would help them catch bigger fish and more revenue...
...perhaps explaining the development .
Get an accountant and file...it's the only way.
f.
There are however US passport holders who have another national identity (& passport) closer to their heart who do not file at all...or materially understate their earnings....this is low hanging fruit ...and has extremely serious consequences for those individuals. We are talking about a felony offense., big fines etc.
It's gets interesting if and when you do get audited - if you lie to a Federal Officer - now you are talking about jail time.
What has probably brought this about (I have heard that they had a team from the IRS in payroll for two weeks in March) - is that if you do get audited, which has happened to EK pilots - there is a system whereby if you are in a spot of trouble you can mitigate the punishment by providing information to the IRS that would help them catch bigger fish and more revenue...
...perhaps explaining the development .
Get an accountant and file...it's the only way.
f.
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If you do your homework....and just don't lie then basically the first 100,000 is tax free. But some people, get bad tax advice. Flew with one fo who said he doesn't file...just like he is unemployed. Those are the people that need to be worried.
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There is another way/exit
Just renounce citizenship at any given time when they knock on your door and/or declare yourself a sovereign citizen as the 350000 others have done (while living in the USA)
Last edited by Boeingrestricted; 30th Mar 2014 at 08:49. Reason: addition
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The irony of your post is that if you renounce US citizenship; it's an automatic IRS audit of the previous SIX years...
... And then what...move to Turkey?
Ehh not...i like youtube
f.
... And then what...move to Turkey?
Ehh not...i like youtube
f.
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The point is,...
Don't look at the details look at the bigger pics. The target was and is always the people, to enslave 'em etc. etc. (look at some 'revelations' made by George Carlin and others). Turkey is now setting a precedence regarding U tube which, if successful will lead to other restrictions and eventually be followed by other Nato members under different guises (popa/pipa or Acta the one recently discussed among all nations in DXB = Internet regulatory laws) .
You have various tools at your disposal, that's all I wanted to point out. If you love the US(or any other nations for that matter) and nationalism is important to you, hey then just pay .
But you can get around them if individualism and people in general are important to you irrespective the nationality (divorce, renounce and get married later with your wife for the citizenship etc etc if its important to you)
You have various tools at your disposal, that's all I wanted to point out. If you love the US(or any other nations for that matter) and nationalism is important to you, hey then just pay .
But you can get around them if individualism and people in general are important to you irrespective the nationality (divorce, renounce and get married later with your wife for the citizenship etc etc if its important to you)
Last edited by Boeingrestricted; 30th Mar 2014 at 09:30. Reason: correction
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The auditing issue appears to be TCOs (tax compliance officers), hired guns by the IRS not allowing the Foreign Resident Tax exclusion. Guys are having to send in flight plans to their attorney to prove the time that they were not over international waters or US airspace. There is no logic to it at all, but when did the IRS ever operate with logic. So it appears that the time one is over international waters or US airspace, one loses the foreign exemption. 
Solution? No one seems to have one. Eventually, it will get kicked upstairs to an IRS agent, who has the ability to settle. Settling usually ends up being a lot less than a full out, with attorneys, appeal process.
Solution? No one seems to have one. Eventually, it will get kicked upstairs to an IRS agent, who has the ability to settle. Settling usually ends up being a lot less than a full out, with attorneys, appeal process.
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@what_goes_up
New Zealand citizens are taxed on ALL their overseas earnings if they have an enduring relationship with NZ. The definition of this 'enduring relationship' is far reaching and a look at the IRD website will show what a minefield it is.
Any Kiwis working in this part of the world should have a good look at how their personal circumstances stack up with the IRD's interpretation of things or they could have a surprise in the future.
New Zealand citizens are taxed on ALL their overseas earnings if they have an enduring relationship with NZ. The definition of this 'enduring relationship' is far reaching and a look at the IRD website will show what a minefield it is.
Any Kiwis working in this part of the world should have a good look at how their personal circumstances stack up with the IRD's interpretation of things or they could have a surprise in the future.
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Ah good little tax slaves giving to your Master. All Governments will get more and more intrusive and greedy no matter where you are a "Citizen" in the western world.
Whilst Turkey has some very restrictive ideas surrounding the Internet (current leader is a Psychopathic Despot), and it will get worse, it is a **** LOAD better than the Middle East(Dubai/AbuDhabi from personal experience)!
Whilst Turkey has some very restrictive ideas surrounding the Internet (current leader is a Psychopathic Despot), and it will get worse, it is a **** LOAD better than the Middle East(Dubai/AbuDhabi from personal experience)!
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Do not try to spread fear with the statement that all western pilots have to pay tax on earnings made overseas. In the UK, having had a professional tax return specialist, the tax man wrote to tell me not to file any returns anymore. The reason for this is, I do not make my money in the UK, nothing I have in the UK is making money above the taxable income band and it costs the inland revenue time and money to process a return that gives them nothing.
If you want to hold a passport for your democratic USofA, then you have to pay for it and will continue to pay. Have a look at the US national debt clock, the US is in deep poo and they need you to keep paying them wherever you are so they can continue to generate revenue which is spent, but not on paying off the debt.
If you want to hold a passport for your democratic USofA, then you have to pay for it and will continue to pay. Have a look at the US national debt clock, the US is in deep poo and they need you to keep paying them wherever you are so they can continue to generate revenue which is spent, but not on paying off the debt.