I was born in Australia. I have lived in Australia my whole life, went to school here, went to university here, and have only ever worked here. However, as an Australian with an American parent, I am considered a dual US/Australian citizen and apparently I am required to file tax returns to the IRS.
I cannot understand why my Australian earned income can be assessed by the US government. Why the bank accounts I hold, in the country I was born and raised in, are considered “foreign holdings”. Why the house I work so hard to pay off is considered “foreign held property” by another government.
I’m in my early 40s and recently came to understand that I’m supposed to be filing IRS tax returns, and I’m scared for what that means for me and my ability to try to set myself up for retirement. I can try to file my previous years taxes under one of the amnesty programs, and the tax I pay in Australia should cover the tax I would have paid in the US, but that means I am required to pay a CPA a lot of money to tell the IRS that I owe them nothing. The cost to comply with this may be great (and not just financial – the stress this is causing is significant), and I don’t know what that will mean for my future finances.
This is a crazy situation, and I am lost as to how a government overseas can lay claim to the money I earn as an Australian, in Australia, and call it “foreign earnings.” While I have never lived there, I have visited the US on holidays, but there may be others in my situation who owe money, or at least are required to declare their income or accounts, to a country they have never even set foot in.
I’m angry, confused, and very concerned.