As an ex-patriot, must I pay United States taxes on Social Security Benefits? - AgingCare.com

As an ex-patriot, must I pay United States taxes on Social Security Benefits?

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As an ex-patriot, must I pay taxes United States taxes on Social Security Benefits? My income is simple: Soc Sec $15,288, Pension $7,644. According to the Notice 703 I get every year from Soc Sec, I then take one half of the Soc Sec, $7,644 add that to my pension of $3,785.76 and the total is $11,429.76. This is far below the base of $25,000 beyond which I would have to pay taxes. I have no income from the Philippines, no business, no job, and nothing from the gov't here.
I have read Pub 54 and Pub 915 but do not see how they apply to me.
Is this not right?
What forms in addition to 1040 do I send in with my return?
Thanks.

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Dave, like some of us told you 3 days ago, you need to see an Accountant or CPA with your question as it is quite complex. We suggest the same when it comes to legal and medical matters that we feel need a higher level of expertise.

Sorry you didn't like some of the answers you received. igloo572 is a storehouse of information and we are grateful whenever we see one of her answers as she can direct us into the right direction.
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You probably need a CPA or tax atty to deal with this as its likely not a DIY. Pay IRS now or pay later with interest & fines / fees later or have your SS debited. IRS doesn't want to hear your dramarama on wife's (domestic or imported), old car situtations or whatever else. It's income with taxes owed.

Yours isn't really an aging " what to do about our parents " concern which this forum is geared to. Perhaps hit up the debt collection forums.
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Sorry, didn't read the all the posts. First, I don't think its up to a person to determine when he stop paying taxes. Both my Mom and MIL received letters from the IRS telling them because of their income they no longer need to pay. If under a certain income, you don't fully pay taxes on pension or SS. A certain amount of your pension is tax free. I suggest that you see a CPA to determine all this. It will cost you but they will exxplain it all to you. You can then use this years taxes as a basis for the next few years. Do not use a tax preparer who hires for the tax season. These people are not trained for all the ins and outs.
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Thanks for the reply. I read over Pub. 54 and 119 that pertains to expats and they talked mainly about expats that have a job, investments, business, or other income from the Philippines. I didn't think it applied to me but I may be wrong.

Even though I have not heard from the IRS yet as to exactly what this cancel debt is I have a hunch. I have been in the Philippines since 2003. Before I left the States I paid all my balances and came to the Philippines. I had one credit card but paid that off.
In 2014 I was doing research on places to rent because I planned to return to the States to get a divorce from my Philippine wife. I took advantage of a free credit search just to see what it said. I found that there was a credit report of an unpaid balance on my account which had been reported to the credit bureau. It was for $800. I called the credit card company and the lady said that my account had been closed in 2006 for none payment and the balance was written off. I did not know of any charges other than what I paid off. I found out that my separated wife did some jewelry buying to the tune of $800 that she never told me about. I immediately sent a letter to the card company and told them it was an honest error and that I would pay the balance just send me the paper work. I never heard back from them.

I believe they re-opened that suspended and written off account, charged me interest for the last ten years and wrote it off on their 2014 income tax which of course showed up on my IRS account as a cancel debt which I must figure as income on my 2014 tax return.
This is a big crisis for me because I live on my social security benefit and a small $320 pension. The card company charged interest on that $800 balance and it turned into $24,041 that they took off their tax and advised IRS and I got the cancel debt.
When I wrote the letter to them in 2014 they had my address yet I never received a notice of this action and did not find out about it until my 1040 was sent back by the IRS and the cancel debt revealed.
I earn approx $15,000 on social security, and $320 in a small pension. I have no job here in the Philippines, investments, business or any other income.
This means my income goes from about $18,000 paying no taxes to $49,000 and owing the IRS about $12,000. It will take me likely the rest of my natural life to pay this off, that is if they let me make payments on it. I am 70 years old now.

Is this right for a credit card company to do? It seems to me if they absorbed the $800 in 2005 that they would have had to take the $800 off their taxes as a loss in that year and not re-open the case ten years later or so adding interest to their advantage and taking off $24,000 in 2014 on their taxes.
Any advice? Thanks, Dave
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AKdaughter - that is really great info. I just did a google on 43 large to get the 13k. Taxes for me...well I just rely on entering into quick books and emailing to our tax pro.

Dave - the 1099-C may be old, like a few years old and with interest & fees added atop the amount due. Any person or biz that is owed more than $ 600 can issue one. My experience with them was due to mil that was a financial terrorist but also due to dealing with post Hurricane Katrina stuff as if you were a business registered in or with recovery programs we got info on doing 1099-C to deal with losses. People went everywhere and it was just not simple to get invoices out to where clients actually were or get paid timely. It was very much character building admist chaos! I recall info about how you could spread out the 1099-Cs and carry some bad debt longer if it was better financially to do this. My point is it could be older debt that morphed into a much much larger debt.
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I was an expat for many years. I believe that you must file a tax return even if you owe nothing. Expats have a large deduction if they are full time residents outside the US. That will probably mean you will not have to pay unless you have income you have not mentioned. Look at form 2552
I can recommend a cpa but he is expensive.
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I guess I better write a letter to the Ombudsman right away then. That way they will get all the documents I have and the worst is they come back to me with more information.
I have a special delivery to the IRS now to find out about the Cancel debt so I may find out soon.
Thanks again for the advice. God bless.
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Dave, I'm sure the Ombudsman suggestion by the IRS is to minimize the workload on those people. But you needn't be that concerned about going through all the prerequisite steps first, especially since paying a large delinquent tax would be financially and emotionally devastating.

And given the difficulty of communication since you're overseas, and what seems to be kind of a "you work it out by reading the publications" attitude, I'd say you could consider that you are pretty close to exhausting options.

Another issue which would concern me is that the IRS could interpret any lack of aggressiveness in resolving the issue as delay or dilatory tactics.

I'd jump on the Ombudsperson option very aggressively, asserting if you have to that there's nothing stated on the web site that their services aren't available to ex-patriates. If the IRS has publications dealing with ex-pats' obligations, then it needs to be prepared to address any issues that arise therefrom.

My experience has been that once the IRS makes what I consider a mistake, or wants additional information, the best thing to do is get it resolved as quickly as possible before someone else makes another mistake and compounds the issue.
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As far as contacting the US Embassy here in the Philippines, they simply refer me to the IRS. They used to have a service that helped US Citizens with tax problems but that program closed in Oct, 2015.
It is still a question if I can use the Ombudsman services. According to the web site it is used after all other options have been used. I am just now in the information phase. If I get to the point where I am told I owe thousands of dollars because of this cancel debt then that will be a financial hardship and I can contact them. When I visited the Ombudsman site all the options to contact them were for the States (local offices) so I am not even sure they will help a citizen living overseas. I may contact them by letter once I get an idea of what this cancel debt is and what problem I face because of it. I have not been back to the States since 2003. I can't imagine what it is but have a possibility in mind. I am still working on the military option. Thanks.
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Very good advice. The debt might even be a mistake. I will look into the military aspect also. I did send a special delivery package by LBC to the IRS so they should get it in a week or so and maybe then they will call me with some info. Thanks and take care.
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