The IRS Filing Deadline for U.S. Taxpayers Living and Working Abroad was June 16, 2025

If you are a U.S. taxpayer who is living abroad, you were required to file your income tax return for the 2024 tax year by June 16, 2025. If you didn’t file by June 16—and you didn’t request an extension—your tax return is now late. What does this mean for you, and what options are available to you? Texas tax defense lawyer Lawrence Brown explains:

U.S. Taxpayers Living Overseas Receive an Automatic Two-Month Filing Extension (But Interest Accrues From April 15)

Technically, all U.S. taxpayers are required to file their annual returns by Tax Day, which is typically April 15 (unless April 15 falls on a weekend or legal holiday, in which case Tax Day is the next business day). However, U.S. taxpayers who are living abroad receive an automatic two-month extension. Thus, in 2025, overseas taxpayers had a filing deadline of June 16, 2025 (since June 15 fell on a Sunday).

Crucially, however, since the June 16, 2025 filing deadline is based on an automatic extension, overseas taxpayers who did not file by April 15 began accruing interest immediately. The IRS makes this clear, stating that, “[e]ven with the tax-filing extension, interest will apply to any 2024 tax payments received after April 15.”

U.S. taxpayers living overseas who did not file their returns by June 16, 2025 began to accrue penalties on June 17 as well. The IRS charges both a failure-to-file penalty and a failure-to-pay penalty, although these penalties are combined in cases involving failure to file until the failure-to-file penalty is maxed out. As the IRS explains:

“The [failure-to-file] penalty is 5% of the tax due (less any tax paid on time and available credits) for each month or partial month the return is late. The penalty accrues up to a maximum of 25%.”

As the IRS also explains, “[w]e charge interest on penalties… [and] interest increases the amount you owe until you pay your balance in full.” Thus, for high-income and high-net-worth overseas taxpayers, failing to file an annual return in a timely manner can have significant financial consequences.

What Are Your Options if You Didn’t File Your Annual Return By June 16, 2025?

With all of this in mind, what are your options if you are currently living overseas and you didn’t file your annual return by June 16, 2025? As with other federal tax matters, the options you have available depend on your specific circumstances. Generally speaking, however, the options that may be available to delinquent overseas U.S. taxpayers include (but are not limited to):

1. File a Delinquent Return and Pay What You Owe

One potential option is simply to file a delinquent return and pay what you owe (including accrued interest and penalties). However, there are a couple of reasons why this option might not be advisable. First, you might be able to settle your tax debt with the IRS for less than the full amount you owe. Second, if you file a delinquent return, this will not protect you from facing an IRS audit—in fact, simply filing a delinquent return as a high-income or high-net-worth taxpayer could increase your risk of being audited.

2. Dispute the Amount of Your Failure-to-File Penalty

The IRS calculates the failure-to-file penalty based on its assessment of a taxpayer’s outstanding liability. As a result, even if there is no question that your annual return is late, you may still be able to dispute the amount of the penalty that the IRS has imposed. An experienced Texas tax defense lawyer should be able to assist with determining if the IRS has incorrectly calculated your liability, and, if so, should be able to take appropriate action on your behalf.

3. Petition the IRS for Penalty Relief

Taxpayers who are facing substantial failure-to-file penalties can petition the IRS for penalty relief in some cases. The IRS will grant penalty relief in three primary circumstances: (i) first-time penalty abatement; (ii) abatement based on reasonable cause; and (iii) abatement based on a statutory exception. Here, too, an experienced Texas tax defense lawyer should be able to assist with evaluating your options and help you make an informed decision about how best to proceed.

4. Seek to Settle Your Tax Debt with the IRS

Regardless of whether you have grounds to dispute the amount of your failure-to-file penalty or you are eligible for penalty relief, you may also be able to settle your tax debt with the IRS. For U.S. taxpayers living overseas, there are two primary means of seeking an IRS settlement:

• Submit an Offer in Compromise – Submitting an offer in compromise may be an option, “if you can’t pay your full tax liability or [if] doing so [would] create[] a financial hardship.” The IRS considers several factors when determining whether a claimed financial hardship is sufficient to warrant an offer in compromise.
• Negotiate a Settlement Agreement – Even if you aren’t eligible to submit an offer in compromise, you may still be able to settle your tax debt with the IRS. The IRS regularly enters into settlement agreements with high-income and high-net-worth taxpayers who dispute their liability.

Both of these options present challenges and risks, and, as a result, skilled legal representation is required. If you don’t take the necessary steps to protect yourself and your efforts to secure an offer in compromise or settlement agreement are unsuccessful, you could find yourself facing intensive scrutiny and substantial liability.

5. Submit a Voluntary Disclosure (if Warranted)

If you are at risk of facing criminal enforcement due to a willful failure to file, then you may need to consider submitting a voluntary disclosure. However, this can also be a high-risk option. Any time you are at risk of facing criminal charges, it is imperative that you work closely with an experienced Texas tax defense lawyer who can help you make informed and strategic decisions while communicating effectively with the IRS on your behalf.  

Request a Confidential Consultation with Texas Tax Defense Lawyer Lawrence Brown

Texas tax defense lawyer Lawrence Brown represents high-income and high-net-worth taxpayers in significant federal tax controversies. If you would like to learn more about your options regarding a delinquent filing, please call 888-870-0025 or contact us online to request a confidential consultation.