Navigating Tax Obligations as an Accidental American with UK and Estonian Ties (Dual Citizen)

Thanks for this info! I'm curious - does it matter that the S&P500 investments are through an Estonian bank rather than a US brokerage? Also, how exactly does one determine if something is a PFIC? The bank just calls them index funds but they're obviously not US-based funds.

Yes, it definitely matters that you're holding S&P500 investments through an Estonian bank. The S&P500 index itself isn't the issue - it's the investment vehicle that matters. If you're investing through a non-US mutual fund or ETF that tracks the S&P500, that would likely be considered a PFIC, triggering Form 8621 requirements. A PFIC is generally any foreign corporation where either 75% or more of the income is passive (investment income) or 50% or more of assets produce passive income. Most foreign mutual funds and ETFs fall into this category. You'll need to check with your Estonian bank to determine the exact structure of your investments. If they're directly holding US stocks or ETFs listed on US exchanges, the reporting is simpler. If they're Estonian financial products that merely track US markets, that's when PFIC rules typically apply.

Did it help with back filing previous years too? I'm worried about catching up on the years I missed. Also, does it handle the FBAR filing or is that separate?

I'm skeptical about these online services for complex international situations. Did it actually handle the UK-Estonia-US interaction properly? These aren't exactly common situations and most software struggles with anything beyond basic scenarios.

It definitely helped with back filing for previous years. You can create separate tax returns for each year you need to file, and it walks you through the differences in tax laws for each year. This was super helpful because some reporting requirements changed over the years I needed to catch up on. For FBAR filing, it actually prepares the information in the correct format, but you submit that separately through the FinCEN website. The service gives you detailed instructions on how to do this - it was much easier than I expected. It handled my multi-country situation surprisingly well. I had accounts in Switzerland, Germany, and a small inheritance from Italy, and it correctly identified which accounts needed reporting on which forms. The guidance was really specific to international situations, not just generic tax advice.

How does this actually work? Do they just call the IRS for you? Seems like something I could do myself if I just keep trying.

This sounds like a complete scam. How could a third party possibly get the IRS to call YOU back? The IRS doesn't work that way. They're notoriously understaffed and don't prioritize callbacks based on who's asking.

It's not that they call the IRS for you - they use automation technology to navigate the IRS phone system and hold your place in line. When they reach a human representative, the system triggers a callback to you and connects you directly to that IRS agent. So you're still speaking directly with the IRS, but without the hours of waiting on hold. I thought the same thing initially, that I could just keep trying myself. But after being disconnected multiple times after 2+ hour holds, and completely unable to get through during the busy season, I was desperate. The IRS actually does have a callback feature, but the problem is getting to the point in their phone tree where you can request one - and that's what this service helps with.

I hadn't even thought about state taxes! Do I need to file something specific with California to establish that I'm not a resident there? I literally haven't lived there since I was 11 months old.

Since you left as an infant, you should be fine without formally breaking residency - you never established it as an adult. California typically looks at factors like where you have a driver's license, voter registration, bank accounts, etc. Since you have none of these connections to California, you have a very strong case for non-residency. However, to be absolutely safe, you could include a brief statement with your federal returns explaining that you left California as an infant and have no connections to the state. In rare cases, people file Form 540NR (California Nonresident Return) with zero income to formally establish non-residency, but this is usually unnecessary for someone in your situation who never established California ties as an adult.

Renouncing is definitely an option but costs $2,350 in government fees alone, plus you need to be tax compliant for 5 years before renouncing! And if your net worth is over $2 million or your average annual tax liability exceeds $168,000 over the last 5 years, you could face an exit tax. Definitely not a quick or cheap solution.