Returning to the States: Tax questions

Since joining the European Union, the IRS has been part of an information exchange program with all member states regarding income earned by citizens abroad. This means data on the new wave of expats eventually makes its way to Washington, D.C., and if they want to avoid being taxed twice, they need to sort out their tax status. Tax advisor Lucia Turković points out that anyone moving away from America permanently or for a long stretch needs to request to be removed from the US tax registry if they don't want to keep paying American taxes.

For those who don't take care of it, the IRS can still come knocking for income tax here, regardless of where that money was actually earned. Under current rules, all US residents—that's the official term for anyone living here—are required to report foreign income based on the global income principle, though that doesn't automatically mean you'll owe anything.

Turković explains that income earned in Ireland, Germany, or anywhere else is calculated using US tax laws, but you get a credit for any taxes already paid to that foreign country, taxing only the difference if one exists. Since foreign salaries usually outpace what people make back home, those differences happen. Once you're officially removed from the US tax registry, you're off the hook for filing annual returns. Lucia Turković notes that the US allows taxpayers to be removed from the registry if they can prove they've lived outside the country for more than 183 days in a single or two-year period.

Citizens who still own property in the US or have families staying behind often find it harder to get removed from the registry and usually end up remaining US taxpayers.

Read more at: - www.vecernji.hr

Jason Morgan4 said:I’m not trying to lecture you; I’m speaking from experience. A close friend of mine moved to Dubai five years ago, and he had a massive headache with the IRS. Even though he officially changed his residency, they still flagged his place as rental property, so he ended up paying a flat tax. They wouldn't leave him alone because apparently, they weren't happy that he was paying taxes where he actually lives and works (the fact that tax is 0% in Dubai didn't change their attitude).

Of course you can.

And politicians promised we’d be as wealthy as Switzerland.

It’s obvious if you actually bother to look. You just have to put in the effort.

Ivan Rakitić never actually lived in America, never paid taxes to the US, and never will. He's completely off their radar.

Oh sure, they'll slap a "tax resident" label on you and then you get to spend your life arguing to prove them wrong. My advice to the OP? Don't mention anything. Don't ask anything. If they decide to come looking, then you can start trying to prove something else.

You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

Jason Morgan4 said:What if you spend four months of the year in America just lying on your back doing absolutely nothing—basically one long vacation—then head out for three months to work a season in Austria or Italy, then pop back home for a bit, then decide you feel like spending another three months in Greenland?

You don't actually reside in America; you're just visiting. You definitely aren't earning anything here. You have citizenship and you own property. So, are you a taxpayer or not?

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

Jason Morgan4 said:Since joining the European Union, the IRS has been part of an information exchange program with all member states regarding income earned by citizens abroad. This means data on the new wave of expats eventually makes its way to Washington, D.C., and if they want to avoid being taxed twice, they need to sort out their tax status. Tax advisor Lucia Turković points out that anyone moving away from America permanently or for a long stretch needs to request to be removed from the US tax registry if they don't want to keep paying American taxes.

For those who don't take care of it, the IRS can still come knocking for income tax here, regardless of where that money was actually earned. Under current rules, all US residents—that's the official term for anyone living here—are required to report foreign income based on the global income principle, though that doesn't automatically mean you'll owe anything.

Turković explains that income earned in Ireland, Germany, or anywhere else is calculated using US tax laws, but you get a credit for any taxes already paid to that foreign country, taxing only the difference if one exists. Since foreign salaries usually outpace what people make back home, those differences happen. Once you're officially removed from the US tax registry, you're off the hook for filing annual returns. Lucia Turković notes that the US allows taxpayers to be removed from the registry if they can prove they've lived outside the country for more than 183 days in a single or two-year period.

Citizens who still own property in the US or have families staying behind often find it harder to get removed from the registry and usually end up remaining US taxpayers.

Read more at: - www.vecernji.hr

I wouldn't suggest relying on newspapers for information regarding these matters.

Furthermore, this article merely reiterates what I have already stated, albeit with significantly less precision.

Please review my previous response.

And by the way, there is no need for excessive capitalization; we are still able to read.

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

I'm not even stirring the pot here; you just aren't reading what I'm actually saying.

(No content provided to rewrite.)

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

Look, he isn't even renting out property in America. The reason they wouldn't take him off the taxpayer rolls is because he owns a place here, so technically, he’s "tied" to the US. All he really had to do was report his own house as a vacation rental just to get them all off Quartz. He’s basically "renting" it to himself for those two weeks he shows up every six months.

(No content provided to rewrite.)

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

So, the IRS wouldn't budge. They refused to strike him from the taxpayer registry, even though he officially moved out of his place in Seattle and showed up in Dubai with his US passport and permanent residency permit. No luck.

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

Single guy, no family. The IRS decided that since he still owns an apartment in San Diego he didn't sell after moving away, his "center of life" is still officially right here. Yeah, okay. You're in the money, I'm in the gutter.

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

I don't have access to their tax returns, so I couldn't tell you for sure. But let's be real—we're talking about the big fish here. They’ve got high-priced lawyers to handle all that. It’s much easier for the IRS to just squeeze the average person.

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

In a functional country, sure, maybe that’s how it works. Around here? Nothing ever works the way it’s supposed to.

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

On what grounds? How exactly can you see that from an airplane? What, like someone shoots two kids in Dubai, and then there’s still two more back in the States? Where does this guy even find his center of gravity?

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

Exactly. You decide you’re going to pay it abroad, telling them, "Look, I’ll pay my full zero percent tax in Dubai, just like the law says." And then the IRS hits you with: "Nice try, but you own property in the States and this is clearly where your life is centered. Doesn't matter if you don't live here or if you've officially moved out—you still owe us."

urbanwalker72 said:You are conflating two different issues.

Your friend does have to pay taxes, but only regarding the rental income from the property in America, because under European Union legal frameworks and various "directives," sales tax and income tax are tied to the physical location of the real estate.

It is the exact same principle if a Francuz buys a house here and rents it out.

If he lives and works in Dubai, there is absolutely no legal basis for the US to tax his income earned in Dubai.

The only exception would be if he has his immediate family—meaning a spouse and children, not just parents—living here along with property, in which case the US might argue his center of life is actually here, implying he is bringing or sending money back to this country.

That is why I suggest looking closely at the questionnaire used to determine one's center of vital interests.

It becomes obvious if someone is actually looking; one simply needs to put in the effort.

Ultimately, this all flows through automatic data exchange via spreadsheets, but then the work lies in following through on that data.

Rakitic never had residency in the US, nor did he ever pay any taxes here, nor will he ever, so they stay under the radar.

Did Modrić ever have residency in the US? What about Ivanišević? Or Čilić?

They can easily label you a tax resident, and then you're stuck fighting to prove them wrong.

There is no such thing as being arbitrarily "labeled." For every measure the IRS takes that contradicts what a taxpayer has declared, there is an appeal process available as a legal remedy, which stays the execution of the decision. Furthermore, when it comes to increasing a tax liability, the burden of proof rests entirely on the taxing authority.

However, residency is rarely a point of contention. In many instances, it is quite easy to see from a distance where a person's true center of life is located.

I gave the author some friendly advice: don't mention anything and don't ask anything. If they remember him, then he can start proving other things.

In my view, that approach is fundamentally flawed. Whenever I face any ambiguity, I prefer to submit a formal written inquiry and secure a written response before any issues arise—ensuring, naturally, that no specific names or exact dollar amounts are mentioned.

This is a scenario that occurs quite frequently. As I understand it, the situation unfolds like this:

If there is a tax treaty in place between those countries, they will request proof of residency from the US. Once you provide that documentation, they grant you tax relief, based on the assumption that you will report your entire income to the American authorities.

If you fail to provide that certificate of residency, they will simply withhold and collect taxes according to their own local laws.

Of course, the moment you request a residency certificate from the US, you are effectively notifying the government that you are working abroad and intend to report that foreign income.

However, at the outset, if you intend to work overseas, you should visit the IRS, complete the necessary exit paperwork, and outline your intentions. If you declare that you are single without dependents (or that your family is moving abroad with you) and that you will be stationed overseas for more than six months of the year, the US won't tax you, but you automatically lose the ability to obtain a residency certificate, meaning you'll have to pay taxes in the foreign country instead.

Ultimately, the choice is yours, but you cannot escape taxation entirely; you will owe it either here or abroad.

I don't actually live in the US responsibly; I am just here on vacation and certainly don't earn anything here. I hold citizenship and own property. Am I still considered a taxpayer?

As I have noted, it all depends on how you define the center of your life interests. You could technically stay abroad 365 days a year, but if your spouse, children, and real estate are all located here, you remain a US taxpayer.

If your wife and children are with you abroad, or if you are single, then the center of your life interests is wherever you are living and working, regardless of your citizenship or property ownership.

Could you give me the legal definition of "life interests"? Or maybe just explain this logic to me.

Person A: single, lives and works in Dubai, stays there 11 months out of the year, takes one month of vacation, and spends that entire month back home in the States. He's a total player, and sends half his paycheck to his parents whom he supports. His center of life interests isn't in the US, and he pays zero percent tax in Dubai.

Person B: married, two kids, lives and works in Dubai, stays there 11 months out of the year, spends his vacation back home in the States, and sees his wife during summer breaks when she visits. He funds everything from Dubai and sends half his salary home. Despite living and working in Dubai, his center of life interests is considered to be in the US, and the IRS hits him with a 40% income tax.

Did I grasp the law and tax justice correctly?

Jason Morgan4 said:I'm not even stirring the pot here; you just aren't reading what I'm actually saying.

(No content provided to rewrite.)

Look, he isn't even renting out property in America. The reason they wouldn't take him off the taxpayer rolls is because he owns a place here, so technically, he’s "tied" to the US. All he really had to do was report his own house as a vacation rental just to get them all off Quartz. He’s basically "renting" it to himself for those two weeks he shows up every six months.

(No content provided to rewrite.)

So, the IRS wouldn't budge. They refused to strike him from the taxpayer registry, even though he officially moved out of his place in Seattle and showed up in Dubai with his US passport and permanent residency permit. No luck.

Single guy, no family. The IRS decided that since he still owns an apartment in San Diego he didn't sell after moving away, his "center of life" is still officially right here. Yeah, okay. You're in the money, I'm in the gutter.

I don't have access to their tax returns, so I couldn't tell you for sure. But let's be real—we're talking about the big fish here. They’ve got high-priced lawyers to handle all that. It’s much easier for the IRS to just squeeze the average person.

In a functional country, sure, maybe that’s how it works. Around here? Nothing ever works the way it’s supposed to.

On what grounds? How exactly can you see that from an airplane? What, like someone shoots two kids in Dubai, and then there’s still two more back in the States? Where does this guy even find his center of gravity?

Exactly. You decide you’re going to pay it abroad, telling them, "Look, I’ll pay my full zero percent tax in Dubai, just like the law says." And then the IRS hits you with: "Nice try, but you own property in the States and this is clearly where your life is centered. Doesn't matter if you don't live here or if you've officially moved out—you still owe us."

Could you give me the legal definition of "life interests"? Or maybe just explain this logic to me.

Person A: single, lives and works in Dubai, stays there 11 months out of the year, takes one month of vacation, and spends that entire month back home in the States. He's a total player, and sends half his paycheck to his parents whom he supports. His center of life interests isn't in the US, and he pays zero percent tax in Dubai.

Person B: married, two kids, lives and works in Dubai, stays there 11 months out of the year, spends his vacation back home in the States, and sees his wife during summer breaks when she visits. He funds everything from Dubai and sends half his salary home. Despite living and working in Dubai, his center of life interests is considered to be in the US, and the IRS hits him with a 40% income tax.

Did I grasp the law and tax justice correctly?

You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?

Imagine being a single individual with no family ties, only to find that the IRS has decided you still reside here simply because you haven't sold an apartment in a city like Seattle. It is much like one person holding onto Coors while another clings to their SPADES cards; everyone seems to have their own peculiar way of clinging to the past.

Did he participate in the proceedings? Did he complete the TI form, and if so, what specific details did he provide there?

Where exactly did they document that his center of vital interests is located here in America?

There must be a formal ruling issued regarding this matter, one that provides a clear legal remedy; if the justification isn't thoroughly articulated, the decision will likely be overturned on appeal or in court.

They evaluate all relevant facts cumulatively. For instance, if he were to own a single property in every country, you would argue he'd be liable for taxes in every single one of them.

Based on your reasoning, the mere fact that he owns real estate cannot outweigh the reality that he is a single man living and working in Dubai.

The only way he could possibly owe income tax in the US is if he proactively applied for an American certificate of residency, effectively declaring himself a US taxpayer regardless of where his actual life and work are situated.

I don't have access to their individual tax filings, so I couldn't say for certain. To reiterate, we are talking about major players here who employ high-end attorneys to handle these matters. It is much easier for the IRS to target the average citizen than it is to go after people like this.

Honestly, if you aren't equipped to represent yourself in a specific legal matter, it is far more cost-effective to hire an attorney or a tax professional than to attempt to navigate the complexities alone and risk making mistakes.

In a highly organized nation, that might be the case, but here, nothing seems to function according to the rules.

That is why I am asking: is he actually paying income tax from Dubai to the US, or has he simply not been removed from the registry?

It seems to me that in your friend's situation, there is a lot of noise being made, but he likely isn't paying anything to us at all, aside from perhaps property taxes on vacation homes or flat taxes on rentals—which he would have to pay regardless.

On what basis? How can you determine that just by looking? Is it because someone has two children in Dubai and another two in America? Where is his actual center of vital interests?

Exactly. You decide to pay your taxes abroad, telling them, "I will pay my taxes in Dubai," which, under the law, means paying zero percent. And then the IRS responds, "No, you own property in the US, so that is your center of vital interests; regardless of where you live or that you've deregistered, you still owe us taxes."

Those are probably just rumors. I get the impression that both your friend and the tax officials are talking quite a bit, but it all feels disconnected from any actual substance—much like idle chatter at a local farmer's market.

Could you provide me with the legal definition of "vital interests"?

It states the following:

2. If, under the provisions of paragraph 1, an individual is considered a resident of both contracting states, their status shall be determined as follows:

a) they shall be deemed a resident of the state in which they have a permanent home; if they have a permanent home in both states, they shall be deemed a resident of the state with which they have closer personal and economic relations (the center of vital interests);

b) if the center of vital interests cannot be determined in either state, or if the individual has no permanent home in either state, they shall be deemed a resident of the state in which they have their habitual abode;

c) if the individual has a habitual abode in both states or in neither, they shall be deemed a resident of the state of which they are a national;

d) In cases where an individual holds citizenship in both nations or holds none at all, the competent authorities of the contracting states shall resolve the matter through mutual agreement.

The concept of "center of vital interests" encompasses one's intimate personal life—essentially where they primarily reside, work, and whether they live alone or with family—as well as their economic ties, specifically the location of their primary income source.

Furthermore, physical presence is the deciding factor here. Since he spends 300 days a year in Dubai (regardless of the fact that he maintains residency in both the US and Dubai), he simply cannot be considered a tax resident of the US. This is a matter of law.

Based on these principles, it is perfectly clear that the government cannot force your friend to be a US tax resident.

It is a dispute that is virtually impossible to lose.

However, it might be unnecessary to pursue this at all, as I suspect he isn't actually paying US taxes on his salary earned in Dubai.

Jason Morgan4 said:I'm not even stirring the pot here; you just aren't reading what I'm actually saying.

(No content provided to rewrite.)

Look, he isn't even renting out property in America. The reason they wouldn't take him off the taxpayer rolls is because he owns a place here, so technically, he’s "tied" to the US. All he really had to do was report his own house as a vacation rental just to get them all off Quartz. He’s basically "renting" it to himself for those two weeks he shows up every six months.

(No content provided to rewrite.)

So, the IRS wouldn't budge. They refused to strike him from the taxpayer registry, even though he officially moved out of his place in Seattle and showed up in Dubai with his US passport and permanent residency permit. No luck.

Single guy, no family. The IRS decided that since he still owns an apartment in San Diego he didn't sell after moving away, his "center of life" is still officially right here. Yeah, okay. You're in the money, I'm in the gutter.

I don't have access to their tax returns, so I couldn't tell you for sure. But let's be real—we're talking about the big fish here. They’ve got high-priced lawyers to handle all that. It’s much easier for the IRS to just squeeze the average person.

In a functional country, sure, maybe that’s how it works. Around here? Nothing ever works the way it’s supposed to.

On what grounds? How exactly can you see that from an airplane? What, like someone shoots two kids in Dubai, and then there’s still two more back in the States? Where does this guy even find his center of gravity?

Exactly. You decide you’re going to pay it abroad, telling them, "Look, I’ll pay my full zero percent tax in Dubai, just like the law says." And then the IRS hits you with: "Nice try, but you own property in the States and this is clearly where your life is centered. Doesn't matter if you don't live here or if you've officially moved out—you still owe us."

Could you give me the legal definition of "life interests"? Or maybe just explain this logic to me.

Person A: single, lives and works in Dubai, stays there 11 months out of the year, takes one month of vacation, and spends that entire month back home in the States. He's a total player, and sends half his paycheck to his parents whom he supports. His center of life interests isn't in the US, and he pays zero percent tax in Dubai.

Person B: married, two kids, lives and works in Dubai, stays there 11 months out of the year, spends his vacation back home in the States, and sees his wife during summer breaks when she visits. He funds everything from Dubai and sends half his salary home. Despite living and working in Dubai, his center of life interests is considered to be in the US, and the IRS hits him with a 40% income tax.

Did I grasp the law and tax justice correctly?

In my view, yes.

The sole exception would be a merchant mariner on international waters, which is governed by specific legislation, exempting them from income tax.

Otherwise, one must weigh whether it is more economical to pay our taxes or simply move the entire family to Dubai.

There are other avenues as well. If I were working in Dubai while my wife and children remained here, I might establish a shell company in Dubai—much like the hundreds of thousands that exist there—and instead of receiving a traditional salary, I would invoice my employer for the same amount.

Subsequently, I would transfer the profits from Dubai to America, paying the 12% tax on foreign capital income, and then dutifully file the necessary paperwork with the IRS to settle the obligation.

urbanwalker72 said:

You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?
You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?
No, you misunderstood. He pays a flat tax on his vacation home, which comes out to $100 per bed annually.

urbanwalker72 said:

You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?
You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?
He’s not paying anything in the US; he hasn't lost his mind. The guy plans to move back to the States in maybe five years, once he's tired of the desert heat. And honestly, he wants to come back smoothly, legally, without any shady business. He just wanted to make sure the money he brings back is clean. He doesn't pay taxes here; the IRS has no clue what he earns or which accounts the money hits.

So, he tried to fix his status legally. He attempted to de-register from the taxpayer rolls so the government wouldn't come after him when he returns, trying to hit him with back taxes for the last several years until the statute of limitations runs out. Everything I'm telling you is based on what he knows from his emails and his own talks with the IRS. The whole thing took maybe two weeks, and they eventually concluded he has to sever all ties with America. The only way to break that "property tie" is to either sell the house or list it as a vacation property, for which he pays an annual tax.

After that whole circus, they still refused to take him off the taxpayer registry, so he basically told them where to go. He’s just going to do his own thing. If he does come back, he’ll just act like a returning resident who fulfilled all his tax obligations in the country where he lived... and he'll fight back if they try to mess with him.

urbanwalker72 said:

In my view, yes.

The sole exception would be a merchant mariner on international waters, which is governed by specific legislation, exempting them from income tax.

Otherwise, one must weigh whether it is more economical to pay our taxes or simply move the entire family to Dubai.

There are other avenues as well. If I were working in Dubai while my wife and children remained here, I might establish a shell company in Dubai—much like the hundreds of thousands that exist there—and instead of receiving a traditional salary, I would invoice my employer for the same amount.

Subsequently, I would transfer the profits from Dubai to America, paying the 12% tax on foreign capital income, and then dutifully file the necessary paperwork with the IRS to settle the obligation.
In my view, yes.

The sole exception would be a merchant mariner on international waters, which is governed by specific legislation, exempting them from income tax.

Otherwise, one must weigh whether it is more economical to pay our taxes or simply move the entire family to Dubai.

There are other avenues as well. If I were working in Dubai while my wife and children remained here, I might establish a shell company in Dubai—much like the hundreds of thousands that exist there—and instead of receiving a traditional salary, I would invoice my employer for the same amount.

Subsequently, I would transfer the profits from Dubai to America, paying the 12% tax on foreign capital income, and then dutifully file the necessary paperwork with the IRS to settle the obligation.
Kuzis, tell me how insane this is and how backward our government really is.

Jason Morgan4 said:

You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?
No, you misunderstood. He pays a flat tax on his vacation home, which comes out to $100 per bed annually.

You mentioned that he pays a flat-rate income tax—but I find myself wondering, what kind of flat-rate tax would one be paying if they aren't even renting out a property?

As I recall, an agreement was signed with the Emirates back in 2017. If an individual is already paying their taxes in Dubai, how would they then be expected to pay them here in the States?

How exactly does the IRS get wind of income generated in Dubai if the individual hasn't reported it themselves?

Unless your friend specifically obtained a certificate of residency from the US and presented it to the authorities in Dubai, they should certainly be fulfilling their tax obligations here in America.

"Quote:"

They refused to remove him from the tax rolls because he still owns property there, effectively keeping him tethered to the American tax system.

The fact that he hasn't been removed from the IRS taxpayer registry doesn't inherently prove anything. What truly matters is the specific legal instrument used to determine tax liability. In this particular instance, we are looking at a formal ruling regarding income tax on wages from non-self-employed employment.

The only logical move would be for her to register her own home here in the States as a vacation rental property, effectively getting everyone off her back regarding the Quartz account. She could essentially "rent" the place to herself for those two weeks every six months, creating a closed loop that keeps things strictly private.

One possibility is that he registered the property as a vacation rental, which subjects him to property taxes calculated based on total square footage. This remains independent of whether he actually rents the place out. Honestly, I am not even entirely certain if that specific tax code is still being enforced.

Alternatively, there is a proposal from the government administration to establish a dedicated system for managing short-term rentals for travelers and tourists, which would necessitate the payment of a flat-rate income tax.

It truly matters little whether they actually rent anything out or even possess such assets in the first place. $3.25 Whether you earn that amount or $300,000, the tax remains exactly the same under the flat tax system. That is quite literally why it is called a flat tax.

It seems the IRS remains obstinate regardless of the circumstances; despite him officially deregistering from his address in Los Angeles and presenting his passport along with permanent residency papers from Dubai, they simply refused to remove him from the tax registry.

The reason the IRS refused to strike that from the record is simply because they wanted to maintain their internal tracking capabilities to monitor him moving forward.

By choosing not to delete those records, he hasn't actually triggered any obligation to pay income tax on the earnings he pulls from the Dubai emirate.

Let’s clear the air on this one—is he actually liable for income tax on earnings generated while working in Dubai, or does he walk away without paying anything to the IRS?
He’s not paying anything in the US; he hasn't lost his mind. The guy plans to move back to the States in maybe five years, once he's tired of the desert heat. And honestly, he wants to come back smoothly, legally, without any shady business. He just wanted to make sure the money he brings back is clean. He doesn't pay taxes here; the IRS has no clue what he earns or which accounts the money hits.

So, he tried to fix his status legally. He attempted to de-register from the taxpayer rolls so the government wouldn't come after him when he returns, trying to hit him with back taxes for the last several years until the statute of limitations runs out. Everything I'm telling you is based on what he knows from his emails and his own talks with the IRS. The whole thing took maybe two weeks, and they eventually concluded he has to sever all ties with America. The only way to break that "property tie" is to either sell the house or list it as a vacation property, for which he pays an annual tax.

After that whole circus, they still refused to take him off the taxpayer registry, so he basically told them where to go. He’s just going to do his own thing. If he does come back, he’ll just act like a returning resident who fulfilled all his tax obligations in the country where he lived... and he'll fight back if they try to mess with him.
Look, I have already pointed out that the property tax on a vacation home is one matter, whereas the flat income tax for renting out beds to travelers and tourists is an entirely different beast.

And once again, your friend has opted for the less favorable 😁

In my view, this presents a far more significant hurdle than his situation in Dubai, because non-residents aren't permitted to use the flat tax system for rentals here in the States; they are required to maintain full business books, which is significantly more burdensome.

Yet we are sitting here acting as if he is a non-resident.

He doesn't pay taxes in the US—he hasn't lost his mind. The man plans to move back to the States in about five years, once he's had enough of the desert heat. He genuinely wants to return in peace, legally and without any shady dealings, so he wanted to ensure that the money he brings back with him is completely clean. He doesn't pay taxes in the US; the government has no idea how much he earns or which accounts the money lands in.

One of my acquaintances would describe this as a "madman chasing a confused man" type of situation. Neither he nor the IRS knows what is actually happening.

This needs to be cleared up before he makes his return.

So, he wanted to resolve his status legally and attempted to deregister from the tax rolls so the IRS wouldn't come after him when he returns, trying to retroactively apply income tax for the last several years. What I am telling you is based on his own findings, gathered through email correspondence and personal visits to the IRS office. The whole process took maybe two weeks, and they eventually reached the joint conclusion that he must sever all ties with America. The only way to break that "property connection" is to either sell it or designate it as a vacation rental, for which he pays an annual tax.

It is pure madness. If you ask me, you could fight this, but a legal battle would likely drag on for at least two or three years.

As is often the case, negative selection has taken hold, and the IRS seems to be staffed mostly by incompetent people.

Now they will try to force him into performing hollow legal maneuvers—like fictitiously selling the property to you or gifting it to his mother—only for him to reacquire it upon his return just so they can officially deregister him.

Like I said, it's a total mess.

Just read the actual law that I pasted in italics. By operation of law, he is not a tax resident in the US; it states that clearly. He has personal and business interests in the Emirates and his primary residence is there. I provided the specific section intended for disputed cases, which doesn't even apply to his situation.

Jason Morgan4 said:

In my view, yes.

The sole exception would be a merchant mariner on international waters, which is governed by specific legislation, exempting them from income tax.

Otherwise, one must weigh whether it is more economical to pay our taxes or simply move the entire family to Dubai.

There are other avenues as well. If I were working in Dubai while my wife and children remained here, I might establish a shell company in Dubai—much like the hundreds of thousands that exist there—and instead of receiving a traditional salary, I would invoice my employer for the same amount.

Subsequently, I would transfer the profits from Dubai to America, paying the 12% tax on foreign capital income, and then dutifully file the necessary paperwork with the IRS to settle the obligation.
Kuzis, tell me how insane this is and how backward our government really is.
I wouldn't say it's quite that extreme. This is a global phenomenon; unfortunately, taxes tend to be a burden borne primarily by the working class and those without specialized financial guidance, who make up the vast majority of the population.

By coincidence, my professional background is in tax optimization, and if I found myself in a similar position, I wouldn't even bother debating the ethics of it. Even though I could navigate the system to pay virtually nothing, I would likely choose to pay the minimum required here in the States, simply because I hold the conviction that doing so is the right thing to do.

Years ago, I worked somewhat similarly to a consultant for the IRS regarding information systems and risk assessment, but I quickly realized that such efforts were largely futile.

In short, tax codes are inherently flawed and perpetually struggle to keep pace with economic reality. Consequently, there has always existed a parallel offshore ecosystem utilized by the wealthy, the powerful, and the well-informed. If tax systems were truly equitable and effectively served the needs of society, people wouldn't feel such a strong impulse to resist paying them.

Roughly 10% of the world's total net wealth is currently tucked away in offshore tax havens.