Backdated Taxation - The Problem of Many

If you are an American citizen living aboard you have to file a tax return every year if the income meets the minimum income filing requirements for filing status and age. You will need to report all income earned in Malta and elsewhere. These requirements are the same irrespective of whether or not you are living in the United States.

Table: Minimum Income Filing Requirements for Filing Status and Age

IF your filing status is...	AND at the end of 2009 you were...*	THEN file a return if your gross income was at least...**
single	under 65	$9,350
	65 or older	$10,750
married filing jointly***	under 65 (both spouses)	$18,700
	65 or older (one spouse)	$19,800
	65 or older (both spouses)	$20,900
married filing separately	any age	$3,650
head of household	under 65	$12,000
	65 or older	$13,400
qualifying widow(er) with	under 65	$15,050
dependent child	65 or older	$16,150

Source : http://www.irs.gov/publications/p17/ch01.html

Until the year 2000, a number of our members were coerced to lose their US citizenship. This happened during a time when Malta did not tolerate dual citizenship. After the year 2000 Malta passed legislation that allowed people its citizens to also be citizens of another country. Many of those who had been coerced to lose their US citizenship made use of the services of Stars And Stripes Malta (SASM) to present their case so that their US citizenship is given back. The absolute majority were successful.

The positive outcome letter from the Department of States informs the applicant that he had “never ceased to be a US citizen”. This means that all of a sudden the person is faced with a situation in which he has not filed the annual 1040 tax declaration ever since he had lost his US citizenship. This would be at least 10 years (when Malta changed its legislation), but for many some members more than 35 years had passed since they had lost their citizenship.

Many of SASM’s members who have gotten back their US citizenship are not sure what they are supposed to do. While they do not want to get into trouble and have problems with the IRS, filing 20 years of back taxes is a daunting task especially when one takes into account the fact that tax legislation changes annually. Since the wages in Malta are considerably less than those in the US, many people will not be eligible to pay US taxes. For example, the maximum income exclusion for individuals residing abroad for 2009 is $91,400. But not paying taxes is different from not filing in the necessary forms!

SASM will be presenting its member’s case to the IRS in order to find a solution that is workable and that will benefit its members.

If you would like to voice you opinion on the matter, please send an email to infor@StarsAndStripesMalta.com.

Why SASM?

As president of Stars And Stripes Malta (SASM) I am honoured to welcome you to SASM’s first blog entry. SASM enters the Maltese social and political arena at a time when Malta forms part of the EU block. This gives Maltese citizens the freedom of movement and opportunities that an area of almost 4.5 million square kilometres and half a billion people can generate. Today Malta acknowledges that the name of the game lies in being on the forefront of the hospitality, financial and technological industries rather than being a rock of strategic and military importance. The US is the only superpower in the world that has the capacity to project dominating power and influence anywhere in the world, and sometimes, in more than one region of the globe at a time.

At the micro level, within homes, many people have stronger ties to the US than what may be interpreted from the macro state of events. Malta was, for many years, a country that exported manpower and the United States of America was one of the countries many people hoped to make their fortune in. Some of the emigrants returned back while others have established roots too deep to return. For those who eventually returned back to Malta, the fact that they lived in the US for any length of time gives them a sense of US belonging. And this is even reflected in their children and their grandchildren. On the other hand those who remained in the US are now fully blown Americans who, together with their children and their grandchildren keep alive the Maltese roots. Together the people maintain the Malta-US link. Technology helps each side to establish and retain this link. Malta is home to about two thousand US citizens. A large percentage of these are US nationals who were born and raised in the US and who have no ancestral relationship to Malta. They reside here for reasons of love, work or both and their duration on this island can vary from a short few months to the foreseeable future. These people try to balance the US way of life with the Maltese one.

SASM aims to be a dynamic organization that will inform and be active on those matters that affect its members. Dual taxation, citizenship of children of people who have recovered their US citizenship, entry visas, work permits, investment opportunities are just a few of the topics that come to mind. Each one needs lots of work in its own right and that is why SASM came into being. SASM is a non-profit organization and it is driven by its members. To be successful we need your help. Hop over to http://www.starsandstripesmalta.com/ and become a member (free); contact us if you would like to pitch in.

Alan C. Bonnici