Talk about a tax bill! Wanna tax bill? Quoting from the instructions to Schedule D, Any taxes due at the time, or generated by this hypothetical sale, would all become due in a single tax year. Needless to say, everything required to satisfy this bill would be seized. I guess we've come a long way from the "Expatriation Act of 1868" in which the U.S. Congress declared, "...the right of expatriation is a natural and inherent right of all people, indispensable to the enjoyment of the rights of life, liberty and the pursuit of happiness."
Yeah, the IRS has been notifying me for about a year (just got the mail) that we have to file for 2007. I thought since we didn't owe, we didn't need to file, so this year I"ll be filing from 2007 onwards. Can't remember if I files 2004 or 2005 or 2006 but I'm sure they'll let us know. Since the eldest is headed to uni next year I figure we need to start doing their bidding so he can get some grants. I got 2007 pretty much down, 2008 also, working on 2009 now and while I *thought* I had done 2010 and 2011 I found some errors (and some ideas) and have to completely revamp those (not just little errors to fix). Yikes. I guess I picked the wrong week to stop sniffing glue.
You, and just about everybody else, Kathy; but, the foreign earned income exclusion is only available to those who file. On those years you're not sure if you filed, you could request a transcript of each of those (IRS has a form to use for that). If they send you the transcripts, you'll know you filed! Once you file, it starts a three year statute of limitations running which will cut off the IRS power to do a routine audit (it doesn't start running against them until you do), and you can then consider yourself home- yet another good reason to file now.
