I know that I have written about this before but I really am now totally overwhelmed by US taxes as I think are many overseas US citizens. US citizens living overseas are treated like criminals by the USA and heavily penalized in the form of a growing web of complex rules and reporting requirements that even the IRS doesn’t actually seem to understand and that now required specialist tax assistance (i.e expensive). When you add to that filing in the Czech Republic – which is actually relatively simple – it is just too much.
Tomorrow, I head to Prague where I will review and file tax returns for each year from 2009 – 2013. I will also file a whole array of other special tax forms and reports to the Treasury due to to FACTA and FBAR reporting. Actually, all was going quite well but was very expensive and burdensome until I discovered that my offshore UK pension scheme that contains just a small amount of money from the first 6-years of employment in my life actually isn’t considered a pension by the IRS at all but rather an investment scheme. At the same time, I also discovered that my Czech pension/life insurance also is problematic. Now I am sorry but I really do not understand the issue despite repeated attempts to explain it to me. After all, the UK pension predates my even becoming a US citizen by a decade. That apparently doesn’t matter and to avoid vicious penalties and even worse, I was advised to refile everything and file all the special reports and waivers required for the two offending pensions that are not pensions according to the IRS.
So, now bogged down in a forest of paperwork, I am told I owe taxes on this but … the penalties are waived apparently because I was a good boy and reported this. However, lets not forget I have to pay a specialist UK-based tax attorney and my own accountant for preparing several years of refiles…. my guess is the total cost will be 20,000USD including the taxes.
Mad, I am livid. US citizenship isn’t worth this hassle, aggravation and cost.