this post was submitted on 14 Mar 2024
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Ok, CPA here.
Don't file anything without first talking to a tax accountant >with expat experience<. I don't, but I have worked with some great people who do handle dual citizenship taxes. Happy to give names in a DM, but they are US-based. You might be able to find someone more convenient in Germany.
My first thought is a tiny nitpick: we're now required to e-file except in certain situations, so no paper clerks involved, just databases. No one is looking, or you could pop out in a targeted search, or you could just get randomly selected for audit too (that's an unfortunate reality). However, there are situations where citizens don't have to file at all, if they make too little, for example. So the IRS isn't looking for you because they're not aware of you... yet. That changes with your first filing. See my next thought:
My second thought is don't file ALL of your missing years. You may only need to file the last 7. The statute of limitations for IRS audit is 7 years. Technically it's only 3 years and if they then find anything during an audit, they can look back up to 7, so you might be able to start with only the last 3 years. If you're never selected for audit, congratulations, you saved yourself from having to file additional years. But the audit process is glacially slow. If... if... you get selected, you'll first get a letter that gives you 30 days to respond. Go back to your tax preparer and work out a strategy for response.
If this turns into a giant debacle and pain in your wallet, I agree with others that you might consider renouncing your citizenship. **Again, seek advice of professionals before taking action. **
Could you figure out how to do this on your own, yes. Do you absolutely need a tax preparer, probably not. But your situation isn't a simple one, and I truly feel their fees will be worth the advice and not having to file unnecessary years.