IRS admits its website is confusing US expats

Published:  1 Sep at 6 PM
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Tagged: Moving
For US expat taxpayers, it’s essential to have the knowledge necessary to avoid mistakes, but the IRS’s website is often less than helpful.

Especially since the introduction of FATCA, US taxpayers living overseas have a special responsibility to get everything right on their returns. Most refer to the IRS’s website for the latest info, but many may not realise some of its pages are simply informational rather than authoritative. A blog post by the authority’s National Taxpayer Advocate has shown that over-reliance on some of the information displayed is the IRS’s own fault, although it’s caused expensive consequences for numbers of tax filers.

The blog by Nina Olsen, the aforementioned Taxpayer Advocate, gives insights into how the entire website fits into the overall scheme of tax collection. It describes three levels of information, beginning with Treasury regulations, moving on to medium-strength authorities and ending with non- authoritative pages such as tax forms, instructions, press releases and unofficial publications. In particular, the FAQ pages are in the lowest category and should not be relied on as being cast in tablets of stone.

Olsen’s honest reckoning on the limitations of the IRS website makes crucial reading for expats with complicated requirements, especially if they're filing late returns. She admits the website has caused late filers particular difficulties due to its conflicting information on tax amnesty programmes. This important anomaly has drawn attention from expat tax firms whose responsibility is to ensure their clients don’t get massive bills when the fault is with the IRS website. According to one leading expat taxation firm, the amnesty programmes are not promulgated in regulations or in official guidance, nor are they codified in statutes, leaving plenty of room for genuine mistakes.

Although IRS FAQ pages always include a disclaimer, it’s no comfort to taxpayers desperately looking to avoid fines by doing what they believe is the right thing. Another problem is the ‘page last reviewed or updated on…’ message at the foot of the page, with recent dates disregarding whether information is currently correct or has been applied previously and is now discarded.

Experts in the sector are suggesting changes need to be made, including officially published rules affecting taxpayers and informative disclaimers where necessary. It’s especially important that expats get the correct information, as experienced US tax lawyers aren’t easily available overseas and the IRS website at present doesn’t seem to be doing its job in a responsible manner.
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