Americans in France could be paid as much as $300M in back taxes

Some Americans living in France are in for what some might consider a long overdue payday.

The IRS updated guidance on tax credits it had previously barred U.S. taxpayers residing in France from claiming, following a years-long court battle.

The U.S. is one of the only countries that subjects all citizens, no matter where they reside, to domestic taxation.

Americans living in France are also subject to French income taxes – which are not low, Steven R. Horton, owner and principal of Horton Tax Services – who also assisted on the court case – told FOX Business.

Generally, income taxes paid overseas can be deducted against U.S. tax obligations.

But the specific taxes in question (Contribution Sociale Généralisée (CSG) and the Contribution pour le Remboursement de la Dette Sociale (CRDS)) the IRS claimed were social levies and therefore not deductible.

The fight has been going on for at least seven years, Horton said.

Now that the IRS has updated guidance – allowing individuals to claim the tax credits – this week, affected persons can file for refunds. Claims from 2008, however, are not viable because it is beyond the statute of limitations.

“2008 is the big problem here because the IRS got its money and they don’t have to give it back,” Horton said.

Horton noted that the refunds only apply to people that paid U.S. income taxes, which includes Americans with wages above the foreign earned income exclusion.

Overall, Horton thinks about 5,000 Americans in France probably have refund claims. The average refund claim, he said, is about $10,000 to $15,000 per year, while most people are owed – on average – for five years each.

Horton estimates that the IRS could owe these individuals between $150 million and $300 million in back-taxes.

The IRS did not return FOX Business’ request for comment.


The case was battled out in U.S. tax court, which Horton believes “dragged its feet” despite likely having the information to make a decision sooner.

The issue came about after an audit of Ory and Linda Eshel’s taxes – a pair of dual French-American citizens.