Q: I am a dual citizen of the Philippines and the United States and my sole source of income is in the Philippines. Do I have to file US Taxes?

A: The law requires all US citizens and permanent residents to file their US taxes. This may not necessarily mean you will have a tax liability due to various credits and deductions you may have, however, in order to qualify for some credits, a tax filing has to be completed and filed. In some instances where your total income is less than the standard deduction and personal exemption, it may not be necessary to file.

Q: What can I do if I have been delinquent in my US Tax filings for the last several years? Would submitting a tax filing now open myself up to further scrutiny and questioning?

A: It is advisable to get yourself up-to-date with your US Tax filings. There are certain programs currently in place that offers delinquent filers residing abroad to get compliant while avoiding interest and penalties for the years you have been delinquent. We can offer advice on the various cases in this scenario and we welcome consultations.

Q: My sole source of income is US Social Security and US-sourced pension that is minimal? Should I even bother to file my US Taxes – I already pay income tax in the Philippines?

A: Simple answer is yes, however, there may be instances where your income threshold is below the exemptions and deductions allowed by the tax law. Furthermore, in order to recover withholding taxes paid in the US or to obtain foreign tax credits on a Philippine tax return, it is advisable to file a US Tax return.

Q: I am an American Citizen but my spouse is not? Should we also report on my spouse’s income and financial holdings – does the US really have any control over my spouse’s financial holdings and income?

A:  If your spouse is not a US person (citizen or green card holder) and does not have any US-sourced income, then your spouse is not required to file a US tax return.

Q: What are some of the consequences of not filing my US taxes? I’m a US citizen but have always lived in the Philippines and have no intention to live or work in the United States?

A: The law requires all US citizens and permanent residents to file their US taxes. Failure to file can have plenty of consequences such as the following:

• Compounded interest on unpaid tax liabilities
• Revocation or denial of passport in case of certain unpaid taxes
• Plenty of penalties that can be imposed: FinCen 114 Foreign Bank Account Report up to $10,000 per account; 8938 Specified Foreign Financial Assets $10,000; 3520 Foreign Trust 35% of property transferred or received; 5471 Foreign corporation $10,000; 8865 Foreign partnership $10,000; 8858 Foreign disregarded entity $10,000

Q: I am a Filipino citizen but hold assets and receive some income in the United States, what should I do with the forms that I have been issued? Do I have to file US Taxes?

A: Foreign nationals that receive US-sourced income will generally be issued an IRS form that identifies the amount of income. In this case, it is advisable to prepare a US tax filing, especially in cases where an amount is withheld for US tax purposes in order to obtain a refund where a refund is due.

Q: As a US Green Card holder, I mainly stay in the Philippines and conscientiously adhere to the residency and physical presence requirements of USCIS, why would I have to file US Taxes?

A: The law requires all US citizens and permanent residents to file their US taxes. For US permanent residents, this is even more critical as it can trigger a violation of immigration rules. Furthermore, failure to comply with tax filing requirements negatively impact your eligibility for naturalization in the future.

Q: I opened a Philippine bank account and purchased a life insurance policy with a Philippine insurance company and I had to complete forms that required that I specify my being a “US Person.” Should this be a cause of concern?

A: FATCA or the Foreign Account Tax Compliance Act is a law enacted in the recent years. It is designed to identify Americans with accounts in foreign banks and financial institutions. The main cause of concern is failure to be truthful in these declarations as these are signed under penalties of perjury. Furthermore, relative to the Financial Crimes Enforcement Network (FInCen), penalties of as much as $10,000 per account may be imposed.