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The tax man cometh: the expanding global reach of the IRS

To some people, it might soon appear that the U.S. Internal Revenue Service is about to swallow the earth.

The plenary powers that the agency brings to bear domestically are, of course, well known to American taxpayers, many of whom have found themselves on the receiving end of agency audits, tax liens and levies, and have been subjected to penalties (with interest, of course) over the years.

What many of those filers might be unaware of, though, is the sheer global reach of the IRS, which can sometimes be on display in a manner that can surprise and even amaze.

We referenced that reach in a recent blog entry, where we highlighted the problems experienced by the mayor of London (please see our February 20 post). He was adjudged to have tax debt owed to the IRS by virtue of having been born in the United States, notwithstanding that his subsequent ties to the country have been fleeting and tenuous at best.

So, readers should know that any person born in the United States is automatically deemed a U.S. citizen, regardless of how — or where — he or she thereafter resides.

What many of our readers in Minnesota and elsewhere might not know, though (and quite reasonably so) is that there is a flip side to that, namely this: A child born outside the United States whose father or mother is an American citizen is also tagged as such by the IRS — forever.

As noted in a recent article discussing the broad definition of American citizenship, that is the case even for a foreign-born child who stays overseas and never once returns to the United States.

The tax implications of such a scenario are both notable and potentially harrowing, given the filing requirements and possible payment duties imposed on Americans living abroad.

The expanding presence of the IRS overseas is commanding much attention globally and understandably raising many questions. Any person with an agency-related question or concern touching upon a global tax matter might reasonably want to have a candid and confidential discussion with a seasoned tax attorney.

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