How to Pay Back (Overdue) US Taxes from Overseas

All Americans, including those who live overseas, have to file annual tax returns with the IRS. If you were unaware of this and owe back taxes, how can you pay them?

If you owe taxes to the IRS and you live overseas, you can pay them just as you would if you lived stateside. File your annual return immediately, even if it is late. If you wait even longer to file your tax return and pay the necessary taxes, you will likely receive financial penalties from the IRS. Furthermore, as interest and penalties accrue, certain tax perks for expats, such as the foreign earned income exclusion and the foreign tax credit, might become less impactful. Failing to pay overdue taxes can lead to passport revocation and expensive fines for expats. You might lose out on your tax refund as well.

To get assistance paying your back taxes while living overseas, call the tax accountants for American expatriates at US Tax Help today at (541) 362-9127.

How Can You Pay Back US Taxes from Overseas?

If you have not filed a tax return while living overseas, and you need to file a late return, you can do so. The process is relatively similar, whether you file your taxes on time or late.

Our tax accountants for American expatriates will begin by preparing and planning your taxes. We will see which exclusions and deductions you are eligible for as an expat and attach them to your tax return as necessary.

Part of tax preparation is gathering all information about your finances and residency status. We might require details about your income, foreign financial assets, and dependents. Once your tax return is ready to be filed, we will file it with the IRS.

Many expatriates are unaware that they still need to file and pay U.S. taxes while living overseas, resulting in overdue tax returns. If you haven’t filed your taxes by Tax Day or the automatic two-month filing extension for expats, you might receive a notice from the IRS informing you of your delinquency. You will likely receive several notices from the IRS before you are fined for late filing or unpaid taxes.

If you have an overdue tax return, it is important to file it as soon as possible. Delaying filing even further once made aware of your non-compliance might lead to serious penalties from the IRS, even if you live overseas.

The IRS offers various payment plans to expats and domestic citizens who owe back taxes, making payment more feasible, regardless of how much you owe. These plans include installment agreements and payment extensions.

Can You Claim Exclusions if You Need to Pay Overdue US Taxes from Overseas?

Filing your taxes late might impede your ability to claim certain deductions and exclusions for expats. Fortunately, the IRS provides extensions for expatriates that may allow them to retain eligibility for specific tax perks.

The foreign earned income exclusion and the foreign tax credit help to eliminate double taxation and taxation of specific income for expats living overseas. If you need more time to claim these exclusions and credits because you have yet to meet the necessary residency tests, the IRS may allow you to get a filing extension. To get an extension, you must file IRS Form 2350.

If you file your taxes late and owe money to the IRS, the positive impact of the foreign earned income exclusion and the foreign tax credit might be reduced, especially if you will be fined for late filing. When these exclusions are in full force, expats can exclude up to $120,000 of their foreign earned income from taxation by the IRS and get a tax credit for eligible taxes paid to their foreign country of residence. Because these perks are so advantageous, it is important that expats be able to benefit from them in their full capacity.

What Happens if You Don’t Pay Back US Taxes from Overseas?

Paying back taxes as soon as possible is of the utmost importance. Even if you live overseas, you will be subjected to fines and penalties from the IRS for not filing your annual tax return on time.


The IRS levies significant financial penalties against expats and domestic citizens who fail to file their taxes on time. The initial penalty for late filing is 5% of a filer’s unpaid taxes, up to 25%. In addition to filing an annual tax return, expats have other filing requirements. For example, expats with certain foreign financial assets must file international information returns such as Form 8938 and a Report of Foreign Bank and Financial Accounts. Fines for not filing these forms on time can be extreme, adding up to thousands of dollars for expatriates.

Passport Revocation

When expats do not file their taxes on time and do not make any effort to pay back taxes, they might lose their passports. Being severely delinquent could cause your passport to be revoked by the U.S. Department of State. This can leave you stuck in your foreign country of residence until you pay the necessary back taxes to the IRS. You might be able to get a limited-validity passport to travel back to the U.S. if doing so is necessary to settle your debt with the IRS.

Loss of Refund

The IRS might withhold tax refunds from expats who do not pay back taxes. Furthermore, your tax refund might be withheld if you do not file all necessary forms along with your annual tax return. This includes information returns regarding your foreign financial assets or bank accounts. You should get your refund once you pay all overdue taxes owed to the IRS. You must file a late return within three years of its due date in order to receive your full refund.

Call Our Tax CPAs to Discuss Your US Taxes While Living Overseas

You can call our tax accountants for American expatriates at (541) 362-9127 to speak with the team at US Tax Help today.