What happens if you cash your 401K and run away forever?
zaxxon asked:
What if, in the hypothetical case, I cashed my 401K, paid nothing to the IRS and ran away to a foreign country to never come back to the US?
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What if, in the hypothetical case, I cashed my 401K, paid nothing to the IRS and ran away to a foreign country to never come back to the US?
February 18th, 2009 at 12:17 pm
They’ll get the tax when you cash it out. So you can run, but you can’t hide!
February 18th, 2009 at 10:39 pm
You can’t. 20% of the balance will be withheld unless you ask to have MORE withheld. That won’t cover all of your taxes. The IRS may decide to chase you down if you owe enough. Also note, unless you FORMALLY renounce US citizenship, your WORLDWIDE income is still subject to US tax law.
February 20th, 2009 at 1:22 am
Probably not much, but if you ever did want to come back, you’d owe a ton of interest and penalties in addition to the original tax amount.
Some countries do have treaties that would allow the IRS to track you down there, but it wouldn’t be very likely to happen.