The international Firms of the Leading Edge Alliance gathered in Boston to debate the latest tax and accounting updates on their respective jurisdictions.

Mike Farra an international tax partner at Morrison, Brown, Argiz & Farra LLP , made a very good presentation on the tax position for US citizens and green card holders living and working abroad.

Mike and I spoke during lunch about the IRS voluntary disclosure program and how may US expats are not aware of the fact that they need to file a US Return, even if they have not been US residents for many years. I took good notes to advice anyone on that situation living in Spain.

The concept of citizenship, and less even the concept of a residence card holder, as the only element to determine a worldwide liability for income tax purposes is alien to most jurisdictions. The closer concept to citizenship in other jurisdictions are those of nationality, or the English based tax domicile, which mainly applies to Inheritance Tax and somehow to the resident non domiciled by exclusion.

In most jurisdictions, outside the US, it is the concept of residence what determines the liability to income tax for worldwide income. Therefore, it is not uncommon that tax advisers neglect this aspect when looking at US expats tax affairs in their new country of residence.

Having considered the above, and as a good friend of mine says, quoting his mentor, the only certain thing about reality is that if you do not face it, reality will face you. This is what US citizens and green card holders living outside the US may find, if they do not come to terms with the IRS.

The IRS requires all US Citizens and green card holders, independently on where they are tax residents, to file a US tax return and to report their worldwide income to the IRS. If a US expatriate has not filed his tax returns, I understand that the IRS Voluntary disclosure program provides a reasonable vehicle to regularize the situation.