Accidental American Taxes: First Filing, Back Years, Bank W-9

Born in the US and raised abroad: do you have to file US taxes?

Yes, if you are a US citizen and your income reaches the filing threshold. The IRS says almost everyone born in the US is a citizen at birth, and citizens must report worldwide income wherever they live (IRS). Whether you hold citizenship is a legal question this page does not answer.

You must file for any year your worldwide gross income reaches the threshold for your filing status, counting foreign pay you could exclude (Publication 54; Form 1040 instructions):

The table shows the latest chart published, for the last return already due; for the current year the single amount equals the standard deduction, $16,100 (26 USC 6012; IRS). The amounts change yearly, and joint filers, heads of household, people 65 or older and dependents use other rows; check each back year's chart. A citizen married to a nonresident can choose to treat the spouse as a US resident and file jointly (Publication 54); see married to a nonresident.

Separately, you file an FBAR for any year your foreign accounts together were worth more than $10,000 at any time (FinCEN).

A case stops being simple with US tax actually owing, local investment funds, a business, a non-US spouse, children, or a plan to renounce. Gather your local tax returns and year-end bank statements first.

Will you owe US tax on income already taxed where you live?

It depends, and you still file when nothing is owed. A citizen with a foreign tax home who meets the bona fide residence or physical presence test can exclude up to $132,900 of earned income on Form 2555; a citizen can instead claim a credit for foreign income tax. Either can reduce the US tax, sometimes to zero. On a return filed more than a year late, the exclusion still counts if you owe no tax after it, or if you file before the IRS finds you did not elect it; write "Filed Pursuant to Section 1.911-7(a)(2)(i)(D)" at the top of the Form 1040 (26 CFR 1.911-7). Each back year uses that year's limit. A tax treaty generally does not cut a citizen's US tax: its saving clause keeps the US taxing its own citizens (Publication 54). The IRS's own examples show low local tax rates can still leave US tax due (IRS).

The exclusion covers earned income only, and self-employment tax is figured without it (Publication 54); investment income and local funds need their own look. If your country has a social security agreement with the US, self-employment income covered only by its system is exempt from US self-employment tax (26 USC 1401(c); Publication 54). See exclusion or foreign tax credit and investing abroad as a US citizen.

Your bank asked for a W-9 or FATCA self-certification: what is it?

It is the bank identifying you as a US person under FATCA. Banks generally must find out whether customers are US citizens; a US birthplace is one of the signs they look for, and a customer flagged that way must give an SSN or proof of lost citizenship (IRS).

Participating banks report US account holders. In countries with an intergovernmental agreement, banks identify US accounts and report them, sometimes through the local tax authority (W-9 requester instructions; IRS FATCA). Form W-9 certifies under penalties of perjury that you are a US person. If you do not answer, a participating bank must treat you as a recalcitrant account holder and withhold 30% on US withholdable payments to the account (W-9 requester instructions). Form W-8BEN is not an option: its instructions bar US citizens, even those living abroad (W-8BEN instructions).

How would the IRS find out you never filed?

One way is reports others file: foreign banks report US account holders' accounts under FATCA (IRS FATCA). Another is your own US passport application: it must state your taxpayer number, if you have one, and the country you live in; the State Department passes that statement to the IRS, and leaving it out costs $500 unless you had reasonable cause (26 USC 6039E). What the IRS does with any one report is not public, so plan on the rules, not on being missed.

What happens if you never file?

The time limit never starts. When no return is filed, tax can be assessed at any time (26 USC 6501(c)(3)). The penalties depend on whether tax is owed:

FBAR and information-return penalties do not depend on tax owed. Whether a failure was willful is decided on the facts; a willful FBAR failure can cost the greater of $165,353 or 50% of the balance (31 USC 5321; 31 CFR 1010.821). See foreign account reporting.

Can your US passport be blocked for never filing?

Not by unfiled returns alone. The IRS certifies only seriously delinquent debt: assessed, unpaid tax, penalties and interest over $66,000, with either a lien notice filed and appeal rights lapsed or used up, or a levy issued. Tax the IRS assesses from a substitute return can become such a debt. FBAR penalties and debts being paid on time under an installment agreement or accepted offer are excluded (IRS).

Separately, the State Department may deny an application that leaves out the SSN issued to the applicant (22 USC 2714a(f)).

No Social Security number: how do you get one, and do you need it?

You apply on Form SS-5 with proof of identity, age and US citizenship (IRS). An ITIN is only for people who cannot get an SSN, so it is not a citizen's route (IRS). An ordinary or streamlined return needs an SSN: the streamlined procedures require a valid SSN from anyone eligible for one (IRS). The relief for former citizens does not; leave the SSN boxes blank (IRS, Q16). An FBAR can be filed without one (IRS, Q18).

How many past years do you have to file: three, six or every year?

The law requires a return for every year your income reached the threshold; years below it need none. The routes limit how far back they ask:

Sources: streamlined, relief, IRS Policy Statement 5-133.

Which catch-up route fits someone who never knew?

Two routes are built for non-willful filers: streamlined, for people who stay citizens, and the relief, for people who give citizenship up. Anyone else files plain late returns. The Streamlined Foreign Offshore Procedures need a non-willful certification, 330 full days abroad with no US abode in any one or more of the last three past-due years, and unreported income from a foreign financial asset. Tax and interest are paid; the procedure waives the penalties (IRS). It is closed once the IRS opens a civil exam of any year, or during a criminal investigation (IRS).

The IRS Relief Procedures for Certain Former Citizens need: citizenship given up after March 18, 2010; no filing history as a citizen or resident; non-willful conduct; net worth under $2,000,000 both when you expatriate and when you apply; total tax, after credits, of $25,000 or less for that year and the five before; and average yearly income tax under the covered-expatriate limit. If eligible, the IRS says no payment is required (IRS, Q2 and Q12). For plain late returns, see streamlined or late filing.

Could filing late get you a refund or child tax credits?

Only within narrow limits for past years. A refund of withheld tax or refundable credits must be claimed within 3 years of the return's due date (IRS). The child tax credit needs each child's SSN issued before that return's due date, including extensions, and a number for you by then too (an SSN from tax year 2025; an SSN or ITIN before); a later number does not count, even on an amended return (Schedule 8812 instructions).

The refundable part is not available if you file Form 2555 for the exclusion (Schedule 8812 instructions). Numbers issued now can count for returns not yet due.

Should you catch up before deciding whether to renounce?

If you may renounce, the order matters: the relief for former citizens requires no US filing history, so ordinary returns filed first can close it (IRS, Q2). Renouncing is irrevocable; see renouncing US citizenship.

Where to start, and what to gather

1. List each year your worldwide income reached the threshold.
2. Apply for an SSN if you have none.
3. If you may renounce, check the relief route before filing anything.
4. Choose a route, file, then file every year: see filing while living abroad.

Gather:

• US birth certificate and any US passport
• Dates you lived outside the US and any US stays, by year
• Local tax returns and assessments for the last six years
• Year-end and highest balances of every account, pension and investment, by year
• Statements for local funds, pensions and savings plans
• Spouse's citizenship, and children's birth and citizenship records
• Any bank letter, W-9 or self-certification request

Example

Illustrative figures in British pounds, euros and Australian dollars.

Born in Boston, raised in England

She moved to England at two, earns £45,000 taxed in the UK and keeps £14,000 in savings, over the FBAR threshold, whose interest she never reported to the IRS. Her bank asks for a W-9. She gets an SSN, then files streamlined: three returns and an FBAR for each of six years her balance passed the threshold. Credits for UK tax, or the exclusion, may reduce the US tax, sometimes to zero.

Renouncing at 20 in France

A dual citizen with €50,000 of savings never filed. If she meets every relief condition, she renounces and files every return required for those six years; childhood years below the threshold may need none. The IRS says no payment is required, and she needs no SSN.

A parent in Australia

A parent earning A$90,000 catches up on three years. Her two children get SSNs now, after those returns' due dates, so the late years carry no child tax credit. The numbers can count on the next return if issued before its due date.

Different for you?

• You live in Canada: see catching up on missed US returns from Canada.
• You may owe US tax, hold local funds or run a business: see investing abroad as a US citizen and get cross-border tax help.
• You plan to renounce: see renouncing US citizenship for how past filings affect the relief, with cross-border tax help.
• You own a foreign company or property abroad, or received a gift or inheritance from abroad: see US owners of foreign companies, property abroad and gifts and inheritances from abroad.
• You are ready to file streamlined: follow the streamlined package.
• Unsure which accounts count: see which accounts go on an FBAR.
• Caught up and filing yearly: see filing while living abroad and choosing an expat tax preparer.