[hker8888]

I might receive some bad advices from friend and do not complete a USA tax return last year. I am HKID and USA green card and receive letter from IRS demanding tax payment last week. I live in Los Angeles and California 11 years and move Hogn Kong May '04.

My friend tell me no need to pay since I make less than $US100000, also he say there is no record of payments to IRS or treatie, so no need to pay.

Do I still have to pay IRS tax? I pay HK tax this wek.

[KnowItAll]

First thing at I'd do is start looking at www.irs.gov and see if you can make contact with them and figure out if the situation can be fixed.

If they have sent you a demand note, you have little option but to hire a tax consultant who can negotiate on your behalf. Find a qualified consultant stateside ...

[ohchk2001]

You have a tax credit of up to something like $80,000 if you are a U.S. resident, but you STILL MUST file with the IRS even though you don't pay any tax before $80k

[penguinsix]

You have a tax credit if (and after) you have spent 12 months overseas. There is never some blanket "if you make this much" kind of measurement in US tax law, as the definition of income is vast and far more complicated.

You got bad advice. You need to file even if you don't owe (well, not technically, but it is a really good idea). I strongly suggest speaking to an accountant and or tax attorney immediately that specializes in US taxes for overseas green card holders.

[penguinsix]

Let me reemphasize.

The IRS is after you.

You have a letter that proves that. Don't think they "don't have a record of payment" or anything like that, and don't think you are just going to hide in Hong Kong and not pay. That letter has put you in a world where every statement you make to them is covered by perjury statutes, and you could become a tax fugitive if you lie or "play dumb" with them.

I'm sorry to say this, but you need help. I strongly recommend consulting a professional in this matter. It is not that expensive, and they can clear up things very quickly and completely. You may find that there are deductions and exemptions and credits that will negate most if not all of your income and this is just a big paperwork mistake....

But they are after you.

This is not the end of the world, so don't get overly stressed. But if you ignore this situation it will end badly.

[penguinsix]

One more hugely important thing that you may already know:

The US green card 'permanent residence' is not permanent. It can be if you REMAIN in the United States, or leave under a very detailed set of circumstances for a very brief period of time, but if you leave the United States for more than six months at a time, the burden of proving you are still 'resident' falls on you, and if you leave for more than one year, the INS agent at the border can easily deem you to have 'abandoned' residence in the US and deny your entry.

Many green card holders living in HK "top up" by travelling to the US every six months, but that is a pain.

Now, I don't know your situaiton, but the tax issue may complicate this a bit. In some circumstances, people abandon their green cards when they come to Hong Kong to avoid paying US taxes and / or because they are resettling (NOTE: Abandonment for the purpose of paying taxes is not always accepted for citizens, not sure about Green Cards). It's really really complicated, and as I mentioned in my previous post, the IRS is already after you.

Anyway, I thought I should mention this to you because you may not be aware of this problem (I know many GC holder who find out the hard way being denied entry at the US airport). There are ways around it, such as filing paperwork that says you are only leaving for a short period of time, or working for a specific American company overseas, but you should look into this further, as should you look into the IRS issue further.

In both cases, please consult the relevant government websites and/or professionals in taxation and immigration. Please don't rely on friends (who always only know part of the story), or even on postings on this site. Get the real information so you don't end up losing your GC and getting fined for back taxes.

[KnowItAll]

Penguinsix : awesome follow up! (had to say that!)