Expat’s passports are their only lifelines which build confidence in them and keep them away from any legal stress. The liberty to travel freely without restriction is a sign of relaxation for expats. However, freedom to travel between countries is not a luxury- but it is the only way expat could utilize to reap the earning opportunity and to see their families living abroad. With such great opportunities, the loss or revocation of a passport by the authority due to late filing of tax returns could harshly affect the eligibility of an expat to work and much more. This happened to every second expat because dealing with Hong Kong complicated tax provisions only requires the expertise of US tax services Hong Kong to make sure you are tax compliant and keep your passport in good standing.
As per the guideline of IRS, expats passport could be in jeopardy if carry late US tax return debt. Once revoked, your dream to work and earn more in a financially developed country like Hong Kong will be broken in pieces. But there is a solid way you could prevent your passport from revoked and for this, you will first need to find the competent USA tax services Hong Kong who will provide you an insightful of Hong Kong tax provisions and make you tax compliant.
Expats don’t realize that they’re Tax Non-Compliant
This is usually the case with many expats as what happens that when an American move to a financially wealthy country likes Hong Kong, they’re not aware that the US tax filing requirement timely follows them for the rest of their lives unless they renounce their citizenship. Though their intention is not meant to disobey the IRS prescribed rules and regulations, but howsoever, their act to late filing tax could end up with hefty penalties, interest, fees and to worst revocation of their lifeline for living and earning in abroad i.e passport. What else fate could go against them than taking back the ‘freedom’ to move freely of an expat.
Filing late US taxes Raise Heavy Penalties
Even those expats who do not owe Hong Kong US tax, still need to file timely to remain tax compliant. Filing taxes timely is the only way expats can do to prevent themselves from falling under the category of tax defaulter. Those who fail to meet the timely tax filing requirements have to face failure to file and failure to pay – taxation penalties.
In this case, failure to file penalty may add 5% of your total tax amount and may not exceed 25%. On the other hand, the failure to pay penalty also add 5% to your tax bill monthly and can’t exceed 5% of the total tax an expat owed. Moreover, filing late taxes can result in a penalty of $135 or 100% of the total taxes owed, whichever is smaller.
Passport Revocation Provisions for Those Expats Filing Taxes Late
Any expat who owes more than $52,000 to the IRS can list their name for passport revocation or rendered ineligible for renewal, or may not be eligible to obtain a new passport.
The only possible way to have the passport back or renewed it- settle all the tax debt owed to the IRS along with incurred penalties by having the thorough support of an experienced tax consultant who before deals with such kind of tax challenges. Therefore, to avoid the nightmare of passport revocation, the safest approach is to hire a tax professional who will timely file taxes on your behalf and protect you from any legal obligations.