How does the USA collect foreign tax?

All US citizens must pay taxes on earnings from outside the USA, by law.

Does anyone know what methodds the USA’s IRS uses to enforce this? How does it find out (other than through individuals’ tax returns) whether an individual US citizen is earning money overseas?

Do they perform random audits on peoples’ bank accounts and financial records?

The Irish exchequer would be rich indeed if it started to levy taxes on the earnings Irish people have outside Ireland. Homes in Bulgaria for example

I think it is just a case of random audits.

Also, banks report lodgements of over €10,000 or other general abnormal operations on an a/c.

That’s why you always hear of travellers with tens of thousands of euro stored in their caravans, milk churns, etc.

Also why they drive the latest cars and have the most expensive caravans worth 10’s of 1000’s of euro - it’s a way of ‘laundering’ their money (which they earned while on the dole :wink: )

Irish people are taxable on their WORLDWIDE income!

The difference is AFAIK that that the US gets tax even from non-resident citizens, where as ireland to a large extent doesn’t.

I would assume the IRS relies on the same mechanism for non-residents as they do for anyone else - self-assessment followed by audits armed with a large stick.

Don’t want to into all the boring details, etc, but Irish Revenue do collect tax from non-residents, e.g. tax at source on Director’s fees…

So, there’s essentially zero important differences between the US and Irish tax regimes?

Because I’ve been told that Denis O’Brien and his tax-exile ilk save billions by being non-resident, whereas their US counterparts need to pay up regardless of where in the world they reside. The people who’ve told me this are misinformed then?

AFAIK, the US tax man gets a shout at everything a non-resident US citizen earns, regardless of where it is earned - there are exemptions etc, so it’s not totally double-taxed, but high earners will likely pay both US taxes and national taxes in their country of residence.

The Irish tax man gets their slice based on where the activity happens, or where the person is resident, but don’t get anything by default for non-resident citizens operating outside of ireland.

This is possibly a stupid question but what about the concept of double taxation within the EU? For example, if somebody owns property in Lithuania or Poland or wherever, presumably (if they play by the rules), they are paying whatever applicable taxes exist to the authorities in that State as a landlord - if they have the property rented out. Can they then be taxed a second time in this jurisdiction when the money is transferred to Ireland?

No, you only pay tax the once. I believe you’d pay the tax abroad in this instance.

An example from a French BTL website…

Interesting - cheers

Ireland has double taxation agreements with 44 countries.

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