Home Finance Taxes Ten four(ty): Filing US taxes from Luxembourg
Last update on November 12, 2019
Written by lovelyinlux

Living the American dream somewhere other than the States? Don’t think Uncle Sam and his friend the taxman has forgotten you.

If you’re an American expat who just moved to Europe, here’s something to note: if you ever open up your mailbox and see something that has ‘We the People’ written across the top, be afraid. Be very afraid.

There is a slight chance that you’ve just received an absentee ballot – that is, if your home state is particularly patriotic – but I would say that nine times out of ten, you’ve just received something from the IRS. Yes, the IRS.

Just like that spooky cameo of Great Great Great Uncle Count Crapula on your Great Aunt Grunhild’s wall, the IRS’s eyes follow you wherever you go.

And they’re waiting for you to make a move.


Photoillustration: Big Brother

I had spent four innocently blissful years in Europe before the heart palpitations and nightmares arrived. It wasn’t until I was at a job interview in June 2009, when the interviewer casually joked about the fact that Americans had to pay income tax in the States, that I found out I needed to pay American taxes.

I chuckled and nodded as if to say, “Oh I KNOW! Those Americans really are something, aren’t they?!”

Instead, there were sirens going off in my head similar to the ones in the old WWII U-Boot movies. AAOOOOOOOOGAH! AAOOOOOOOOGAH!

So I went home and Googled it first thing. And sure enough – although my heart was beating faster than my eyes could read the words – there it was : Americans have to pay income tax on foreign income, even if they don’t live or work or ever plan on returning to the United States of America. And even if they’re paying taxes somewhere else.

It is our birthright as American citizens to pay taxes FOR EVER.

Now if you’ve never been in this position before, you probably think your reaction would be something like “Oh my God, seriously!? I have to pay American taxes!? Those moochers!”

When it actually happens to you, however, you have a much different reaction. It sounds more like “Oh $%^&*!!! I’m #$%^&*@ed! I’m going to federal #$%^&ing prison!!!”

Please excuse my profanity.

So after calling my husband and telling him that I might be going away for awhile, I had to get down to business and start working on four years’ worth of back taxes. According to the expat sites and the federal sites I was looking at, it appeared that the IRS wouldn’t penalise you if you realised the error of your ways and came clean. If you chose to avoid the IRS, however, they would HUNT YOU DOWN AND MAKE YOU REGRET IT. I decided that rather from running from the law, I would face the music.

SWAT team

Doing four years of back taxes is not fun. You have to track down the old forms, find bank account statements, paychecks, loan statements, and all kinds of other good stuff for the last four years of your life and get an education in American tax law at the same time. I had to write emails to my accountant friends (and their accountant fathers) with my questions because I was too stubborn to take everything to a tax advisor and pay a gazillion dollars here.

In the end, I sent off my taxes with a cover letter that went something like “Hi there, listen, I know this sounds like a total cop out, but I really had no idea I wasn’t supposed to be doing taxes. I’m like, SUPER sorry. I’m a huge ditz – I do this sort of thing all the time – so please don’t send me to federal prison. I love the US. I love taxes. I am super excited to finally pay them this year. Thanks for understanding (pretty please don’t send me to federal prison).”

And ever since that day, I have waited. And waited. And haven’t heard anything back. I have lived knowing that at any minute, a SWAT team could swing down on ropes from the floor above us and break through our windows, feet first. I know that each day could be my last day of freedom. I know that I may someday be The Expat They Chose To Be an Example for Other Expat Tax Evaders.

Until this past Monday. This Monday, I opened up my mailbox and saw, wrapped in plastic and encompassing more than half of my tiny Euro-sized letterbox with its bulk, a package that said ‘We the People’ on it. My first thought was, “Wow, they’re actually inviting me to jail.” But then I saw that it was a package of 1040 forms for 2009. Holy cow! I guess this means they like me. I guess this means I belong in their little club of overseas taxpayers. I guess this means they won’t be breaking down my door at gunpoint. They love me! They really do love me!

Except now I have to do my friggin’ taxes again.

Until then, I have decided not to open the 200-page monster for at least another four to six weeks. It is located on my desk underneath a pile of other papers (which I have moved on the picture below for your viewing convenience). I figure I’ve still got time, right? Gee whiz, it took me four years the first time.

US taxes form 1040

My overseas 1040s. See how the stars on the flag follow you with their eyes wherever you go? That’s why I’m going to keep this puppy hidden for as long as possible.

Photo credits: Big Brother by adobemac (Flickr.com); SWAT team by OregonDOT (Flickr.com)