The “Emerald Isle” is known for its lush natural beauty, rich cultural traditions, bustling cities like Dublin and Cork, and economic success. With a robust economy focused on investment and trade, Ireland has become a popular destination for American expatriates from all walks of life.
If you’re a U.S. expatriate living in Ireland, you are still required to comply with provisions of the Internal Revenue Code (IRC) by federal law. Depending on your financial circumstances, you may be subject to special reporting requirements pertaining to FBAR (Report of Foreign Bank and Financial Accounts). If you have a tax compliance issue, you may be able to obtain relief from civil penalties and even criminal prosecution by participating in the Streamlined Offshore Disclosure Program. Once you understand your tax obligations, we can help you look for tax credits or exclusions to help reduce your taxes in the U.S. so you are not taxed twice on the same income.
For assistance from our tax CPAs for U.S. expats living in Ireland, call US Tax Help at this link – get in touch.
Do US Expats Living in Ireland Have to File Taxes with the IRS?
Americans who expatriate to other countries still maintain a reporting liability to the IRS, and may still have to pay taxes, depending on the exclusions and credits they qualify for.
Since the United States has a citizenship-based taxation system, all citizens must report and pay taxes, no matter where they live in the world. Failure to report your worldwide income to the IRS annually could lead to you becoming seriously delinquent with the IRS. When this happens, the IRS can request the Department of State to revoke your passport, preventing you from traveling anywhere outside the country until you settle your outstanding taxes with the IRS.
Expats living in Ireland who do not file their U.S. taxes will face IRS penalties, even if they failure was unintentional. When preparing to move abroad, confirm how your taxes will change with our tax accountants, as being surprised by your continued reporting liability after moving abroad could lead to unexpected financial penalties and other consequences from the IRS.
Are You a Covered Expatriate After Moving to Ireland from the US?
While expatriates may no longer physically reside the United States’ boundaries, this does not necessarily sever their financial ties to America. In addition to reporting income to the IRS annually, some expats may have to pay an exit tax upon leaving the U.S. under certain conditions.
26 U.S.C. § 877A addresses situations where citizens expatriate specifically to avoid tax obligations by designating them as “covered expatriates” and requiring them to pay an expatriation tax after renouncing their U.S. citizenship, which would remove their U.S. tax liability. The IRS considers you a “covered expatriate” if you meet certain conditions.
First, to be a covered expatriate, you must be a U.S. citizen living in Ireland or have lost your U.S. citizenship within the past 10 years and are now living in Ireland. If you lost or relinquished your U.S. citizenship, you might still owe taxes from the year your citizenship ended.
Second, your average annual net income at any time during the 5 years leading up to your expatriation must exceed certain amounts set forth by the IRS, which change annually for inflation. Our tax CPAs can compare your income for the period preceding expatriation to the IRS’ current specified amounts to confirm if you will be deemed a covered expatriate.
Third, suppose your net worth when you expatriated to Ireland was at least $2 million, or you did not report or indicate to the IRS that you satisfied your tax obligations during the 5 years leading up to your expatriation. In that case, you may be a covered expatriate and have to pay an exit tax. This might come up if you failed to file your taxes or underreported your taxes for any reason.
Unfortunately, there can be negative financial consequences to the covered expatriate status. For example, any gifts or bequests you make to U.S. residents are generally subject to a debilitating 40% tax liability. If you expatriated a long time ago, it might be hard to tell if you are a covered expatriate, so talk to our team for help determining your U.S. tax obligations.
Do You Need to File an FBAR While Living in Ireland as a US Expat?
The IRS, which frequently works with the Department of Justice (DOJ), has gained a certain notoriety for driving U.S. tax law into international territory. The federal government requires people to file a Report of Foreign Bank and Financial Accounts to monitor U.S. citizens, expatriates, and others with foreign financial accounts.
The IRS and DOJ are unafraid to aggressively pursue not only individual taxpayers who are suspected of tax evasion and other acts of non-compliance but also any foreign financial institutions (FFIs) that aid in those efforts — no matter how old or firmly established. While Switzerland is exceptionally well-known for being a tax haven, Irish banks and expats to Ireland are certainly not invulnerable to IRS investigations — nor are they impervious to criminal prosecution.
As a U.S. expatriate, you must file an FBAR with the Financial Crimes Enforcement Network if you have a financial interest in or authority over at least one foreign financial account with an aggregate value exceeding $10,000 at any point during the tax reporting year. If you have any assets outside the United States, talk to our tax accountants about your possible FBAR requirements. For example, if you are still a U.S. citizen but live and work in Ireland, you might need to file an FBAR regarding Irish bank accounts and assets. Reports of Foreign Bank and Financial Accounts are not just mandatory for expats, but for any U.S. taxpayer who meets the criteria.
What Happens if US Expatriates in Ireland Fail to File an FBAR?
If you meet these requirements yet fail to file an FBAR, the penalties can be severe — particularly if such failure was intentional or “willful.” Even so, non-willful or accidental oversights that cause you to not file your FBAR might land you in hot water with the feds, which our tax CPAs can help avoid.
Civil penalties for non-willful failure to file your FBAR can result in a maximum $10,000 fine per violation. On the other hand, for willful failures, the penalty could be $100,000 or half the value of the account, whichever figure is larger. For some individuals, this 50% account value — and financial loss — is considerably greater than $100,000.
Yet more alarming for non-compliant expatriates is the risk of criminal prosecution and consequent incarceration. For example, tax evasion may be penalized with fines of up to $250,000 or five years in prison. Filing a false return is also against the law and punishable by up to $250,000 in fines and three years in prison. Furthermore, failure to file an FBAR could also have criminal consequences, with non-compliant taxpayers at risk of being fined $500,000 and facing 10 years in jail, on top of any civil penalties imposed by the IRS.
Fortunately, it may be possible for you to dramatically reduce your risk of criminal liability by participating in a special IRS initiative called the Streamlined Offshore Procedure with help from our tax accountants. Participation in the Streamlined Procedure has proven tremendously beneficial for countless taxpayers. Most importantly, the Streamlined can help keep you out of prison after falling seriously delinquent with the IRS while living in Ireland.
Reporting Your Specified Foreign Financial Assets to the US While Living in Ireland
As expats establish residency in foreign countries and build their lives there, they may accrue substantial foreign financial assets, and their savings in bank accounts might grow. While having foreign bank accounts could make you liable for filing an FBAR from Ireland, owning foreign financial assets could put you over the threshold for another international information return, Form 8938.
If you live abroad and your foreign financial assets exceed $200,000 on the last day of the tax year or $300,000 at any point during the year, you must file Form 8938 with the IRS. If you and your spouse both expatriated to Ireland and you file a joint return with the IRS, the reporting threshold doubles.
Examples of specified foreign financial assets include cash or foreign currency, foreign stocks or securities, real estate, and even collectibles. The initial failure-to file-penalty for not submitting Form 8938 alongside your annual tax return is $10,000, though it could go up to $50,000 for continued failure to report after IRS notification.
Will I Be Taxed by Ireland and the US on the Same Income?
At this point, you might think that both the United States and Ireland will tax your income, meaning you have to pay taxes twice. While this is legally possible, there are steps our tax CPAs can take to avoid double taxation on the same income. Depending on your situation, we can help you claim a foreign tax credit or take advantage of a foreign earned income exclusion for expats.
Foreign Tax Credit
The foreign tax credit might be available for you if you owe taxes to Ireland. This might not be the case for everyone, as not all people living in Ireland might be considered tax residents. If you are a tax resident, you are obligated to pay taxes to the Irish government. You might also be obligated to pay taxes on that same income to the United States. The foreign tax credit can help you minimize your tax obligation to the U.S., and we can claim it by filing Form 1116.
The credit works like a deduction on your U.S. taxes. However much money you paid in taxes to Ireland, you can deduct that amount from your U.S. tax obligation. Remember, for individuals, this tax credit typically only applies to income and income tax. Other types of foreign taxes imposed by Ireland might not apply, and you should speak to our team for advice.
The tax credit might also not apply to income you have excluded from your Irish taxes. For example, if you can exclude a portion of income from Irish taxes for some reason, you cannot claim a foreign tax credit in the U.S. on that excluded income. We can help you plan to use the foreign tax credit to minimize your liability to the U.S. while staying compliant with all IRS rules and reporting requirements for expatriates.
Foreign Earned Income Exclusion
If you earn income from any source while living in Ireland, you might be eligible for the foreign earned income exclusion. As long as you reside in Ireland, you can exclude any income up to the limit, even if you work remotely for a U.S. company.
Though the ISR limits how much of your income you can exclude while living abroad, you may be able to shield much or all of it from U.S. taxation, depending on how much you earn. There are limits on what may be excluded from your U.S. taxes. The limit is adjusted yearly for things like inflation and the cost of living. For tax year 2025, you may exclude up to $130,000 of your income while living abroad in Ireland.
US Tax Reporting Deadlines for Expats Living in Ireland
After expatriating to Ireland, your U.S. tax liability stays in place, and you must report your worldwide income to the IRS annually like you did when you lived in America. While the same filing deadline will apply, you can benefit from the automatic filing extension granted specifically to expats.
All income tax returns and supplemental materials are due by Tax Day, even if you reside across the pond in Ireland. Aiming to file by Tax Day, which typically falls mid-April, is ideal, as this will prevent interest from accruing on unpaid tax. While you won’t be penalized for late filing if you use the two-month extension for expats that would push your due date back to mid-June, interest will start growing on any taxes you owe when the original due date passes.
Expats who need even more time to prepare information for the IRS after moving abroad can request a six-month extension from the original Tax Day deadline, which would delay the due date until mid-October, generally speaking. Interest would continue to grow during that time, and our tax accountants can help avoid such situations and facilitate on-time reporting to ensure your compliance from overseas in Ireland.
Call US Tax Help if You Are an Expat Living Abroad in Ireland
For help from our tax CPAs for U.S. expats living in Ireland, call US Tax Help at this link – get in touch.