TAX EVASION STATUTE OF LIMITATIONS: CAN YOU ESCAPE TAX DEBT?

If you’re facing unpaid tax debt, you might dream of running off to a tropical island outside the U.S. and laying low for several years to avoid collections actions from the Internal Revenue Service. If so, you may have seen too many movies.

There are legal ways to move out of the country and no longer pay U.S. taxes, especially if you retire to a country with no income tax or if you move your business and yourself to another country. Even then, it’s not easy, according to tax experts.

“You can’t just expatriate and not pay taxes on things you owned in the U.S. and then went overseas,” Jude Boudreaux, a financial advisor and CNBC FA Council member, told CNBC.com.

Likewise, trying to avoid paying taxes you already owe to the IRS by moving offshore rarely works. Generally, you can’t evade or defeat the IRS. In fact, it could make your situation worse if you don’t understand how the statute of limitations for tax evasion works.