Hi! A while back, I saw the article Latest Foreign Earned Income Exclusion statistics: in five years, IRS offshore crusades added a hundred thousand ordinary new filers who don’t owe any U.S. tax, which I found fascinating. The number of returns filed claiming the Foreign Earned Income Exclusion (FEIE):

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We can clearly see that the IRS managed to bring into compliance more US citizens living abroad.

And yes, the new filers likely have smaller income, as can be seen here:

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However, the picture above’s axis only starts at $34,000, causing the change to look dramatic. In reality, the story is that the IRS is bringing people into compliance and that if anything it attracts people with lower income. But all in all, the income didn’t change as dramatically as the number of income tax return filed:

Related: Foreign Earned Income Exclusion vs. Foreign Tax Credit: which one is better?

 

Thank you again to the Isaac Brock Society,

Tax Samurai

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