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US Tax Return Filing and the Statute of Limitations

Transcript of the above video:

As the title of this video suggests, we are discussing US tax returns.  Those are the filings for US citizens to basically stipulate what if any tax they owe to the US government and we are also talking about the Statute of Limitations. 

Now I want to be clear why we are discussing this. I often hear people tell me, "Oh, I don't need to file a tax return."  Often times they are erroneous in their analysis or I hear people just say "Oh there is no point. I don't want to do it." One of the big reasons for doing it is to get one's documentation on file so that if there is ever an issue with one's taxes, the Statute of Limitations may have run out, and what I mean to say is the Statue of Limitations, in the Thai legal system it is called prescription, but it basically forestalls for example the Government in this case, from pursuing a legal action against someone if a certain amount of time has elapsed between for example the filing of one's taxes and whenever someone wants to go ahead and cause a problem, or for lack of better term "make a beef" about one's tax filing.  If a certain amount of time has gone by and the Statute of Limitations is clear regarding that elapsed time period and the preclusion of being able to bring a case, then there is a certain set of scenarios wherein just simply filing one's taxes, even if one really doesn't need to, is not a terrible idea just to backstop or to cover oneself legally using the Statute of Limitations basically so that after that Statute has elapsed or the time noted in the Statue of Limitations has elapsed, one can basically breathe a lot easier that they don't need to worry about what was going on 3 years, 5 years, 10 years down the road. They just went ahead and filed the return whether they needed to or not, got themselves into the system and then just forget about it. 

I see that happen a lot with certain expats, especially ones that aren't making any real income, retirees and things. Not a terrible idea to just go ahead and file one's taxes even if one isn't bringing any income to speak of it all, mostly for the purpose of getting the clock or the timer to start with respect to the Statute of Limitations.