Facts
The taxpayer is a London, England born citizen identified as Amy. Amy was born in the year of 1972 to her father George and mother Ida. George and Ida are US citizens that had once lived in Texas before the birth of their daughter Amy. The two had formerly held jobs overseas as US state department employees. Shortly after the arrival of their daughter, George and Ida moved to England and resided there full time. Their daughter Amy, a British born citizen, had also acquired US citizenship at birth via section 301(c) of the Immigration and Nationality Act (INA). Amy has never visited the US or has any business within US borders. Amy has worked her whole life in England, earning $80,000 per year starting in 1992 as an employee of VW, which grew through annual raises to $295,000 for the calendar year 2021. In 2021, Amy had investments in the British stock market totaling 1 million dollars, Bank Accounts in England, Germany and Switzerland containing 1.5 million dollars, and a passive interest in an advertising firm generating 40,000 in 2021. She had similar income from these activities for the years 2019-2020. Amy has never missed a tax deadline filing British income tax returns in every working year and paid British taxes on all her income. However, Amy has never filed any tax returns of any sort with the US government.
Issues
1. Did Amy have any obligations to file any tax returns of any sort for any year?
2. If yes, what might the consequences of the failures to file be?
3. Finally, is there anything Amy could, or should do, to reduce the impact of any failures?
Conclusion
1. Despite Amy being born in England she still has an obligation to file any tax returns of any sort for any year with the US government.
2. Amy’s failure to meet her tax obligations with the US may result in confiscation of her assets, penalty charges, interest costs, and there is also the possibility of criminal charges placed upon Amy.
