Person Outside of the USA

[VolAgent]

Most countries are like that EXCEPT the US. Their requirement is foll all citizens and residents to file taxes on ALL WORLDWIDE income. Most don't. But thats the way it is written. The IRS has no jurisdiction if a person is resident in another country. They have no way of making them comply with the IRS code.

Not exactly. They can always seize US assets and work with a foreign country to seize off-shore assets.

But you are right, the US is different. Most countries only tax income earned within their borders, the US feels it is entitled to tax income earned by its citizens, regardless of where it is earned.

 

[669comche]

The IRS only has the power to seize US assets.

They cannot place a lien on overseas property etc. and most governments won't/don't help them.

The IRS is so lapse in this that they will even allow citizens and residents that have been overseas to file previous years tax returns without any form of penalty for being late.

Of course, if your Joe Billionaire then they are likely to take a different approach. But for the most part they don't have the ability to pursue you overseas.

 

[BW2010]

"Most countries are like that EXCEPT the US. Their requirement is foll all citizens and residents to file taxes on ALL WORLDWIDE income. Most don't. But thats the way it is written. The IRS has no jurisdiction if a person is resident in another country. They have no way of making them comply with the IRS code. "

[FONT='Calibri','sans-serif']So you are stating that the law and treaties state that they must pay taxes according to the international rules between each country. And that the IRS cannot enforce its IRS laws on a citizen of another country. [/FONT]

 

[669comche]

Its unlikely that they will try to enforce: They just don't have the means/ability to do it.

There is also a set amount that the US cannot tax you on at any rate on your foreign earned income. Its pretty high, although I forget the exact amount. I think its around 90k or something like that.

So if the person makes less than 90k there is no tax liability anyway. Most confuse this with the requirement to file. They still have to file. Its just their tax liability to the US would be zero. (this is presumably why the IRS lets them file previous years returns without penalty)

 

[BW2010]

Wow thanks for the help. You have to keep diging dealing with the US Tax codes. I took the course once and sort of remember the fine details now. Just a matter of reading in the right places. Its the answer I was hoping for! so if the payout for the anunity is under 90K they file 0 if they file a US tax return at all?

 

[669comche]

No.

That exemption applies only to FOREIGN EARNED INCOME.

The annuity will be paid out in US Dollars, in the US, so therefore they will pay US taxes on it.

I am afraid there is no way around paying taxes on income earned within the US.

 

[BW2010]

If they on a visa move back to their country how do they collect the payouts?
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A carrier says that they need some sort of Tax ID for them to sell the person a product.

 

[669comche]

Unless they are a green card holder you are unlikely to find a carrier that will do the annuity.

Yes they need a tax number.

Payouts will be paid in the US.

 

[ScottLFB]

Unless they are a green card holder you are unlikely to find a carrier that will do the annuity.

Yes they need a tax number.

Payouts will be paid in the US.

Just call the Carrier you are trying to place the product with and ask them. Most of the main carriers will take Mexican Nationals (for example) if they have a
1-US Address
2-TaxID (because they don't have ssn yet)
3-W8 filled out instead of a W9
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If they on a visa move back to their country how do they collect the payouts?


How do they collect the payouts you ask? The same way US citizens collect the payouts when they move out of the country. They keep a relatives address on file and a bank acct open for the funds to be payed out to. You just have to have a large enough bank that will let you do International Wire Transfers so they can transfer the funds from the US Bank to the Foreign Bank.