Essential records to keep for audits after leaving the United States

Americans who move abroad are being urged to keep detailed financial records long after they depart, as IRS audits often focus on cross‑border issues like foreign income, the Foreign Earned Income Exclusion, and FBAR filings. Former U.S. residents should maintain all tax returns and supporting documentation for at least three years, the general IRS audit window, and many choose to hold records longer when their affairs involve foreign accounts, expatriation steps, or complex filings. According to analysis by VisaVerge.com, thorough preparation eases the strain of an audit and helps prove timely compliance when living outside the United States.

The core advice is straightforward: keep complete copies of every filed return and all backup documents that support the numbers reported. That includes income items, deductions, and credits. Keep these records organized by tax year and by category, and retain proof of when you filed, paid, or responded to the IRS. If you are asked to provide information during an audit, submit copies rather than originals.

What a complete archive should include

Start with your signed return and any schedules or forms you filed with it. Common items include:

• Form 1040 — individual income tax return (About Form 1040)
• Form 2555 — Foreign Earned Income Exclusion (About Form 2555)
• Form 8938 — specified foreign financial assets under FATCA (About Form 8938)
• FBAR / FinCEN Form 114 — foreign account reporting, filed with FinCEN (Report Foreign Bank and Financial Accounts (FBAR))

If you had ties to foreign trusts or corporations, also keep forms and records related to:

• Form 3520 (About Form 3520)
• Form 5471 (About Form 5471)

Proof of worldwide income and supporting documents

Audits often turn on whether your return matches your documents. Keep clear proof of your worldwide income, not just U.S. pay. Useful records include:

• Bank and brokerage statements (domestic and foreign)
• Employer records from abroad and W‑2s
• Foreign tax returns, if filed in another country
• Invoices, receipts, canceled checks, and payment confirmations tied to income or claimed expenses

If you claimed deductions or credits, keep documents that show the amount, the reason, and the date. When a diary or log bolsters your claim, retain it — for example:

• Travel dates to support time outside the U.S. for FEIE purposes
• Mileage logs for work travel
• Notes on job‑hunting efforts if claiming related costs

FBAR and foreign account documentation

For many expatriates, FBAR compliance is central. Maintain:

• Copies of all FBAR (FinCEN Form 114) submissions
• Monthly or year‑end statements for each reported foreign account
• Documentation showing account holder(s), account numbers, and peak balances
• Proof of signature authority if your spouse or business partner had it

Missing FBARs or missing statements can invite more scrutiny, so keep a clear file for each account.

Employment, medical, and loss documentation

When your return depends on employment or personal events, retain supporting paperwork:

• Employment: W‑2s, contracts, employer letters, policy documents tied to uniforms/training/education
• Medical: medical and dental bills, insurance statements, medical savings account documents
• Theft/casualty losses: insurance reports, police reports, appraisals, and photos

Residency changes and expatriation records

If you changed residency status or relinquished citizenship, keep:

• Proof of residency and expatriation documents
• Copies of filings and dates of key events
• Official letters received from government agencies

Many people keep tax records for at least three years, but those with complex international moves often retain them longer because files span multiple countries and forms.

Proof of filing and payments

Documentation that shows when you mailed or submitted paperwork can be as important as the forms themselves. Retain:

• Postmarked envelopes and certified mail receipts
• Shipment tracking and online submission confirmations
• Bank or card statements showing IRS payments
• Copies of all letters from the IRS and your responses

These items can resolve disputes over whether a filing or payment was on time.

How to organize your files (practical tips)

To reduce stress later, build your file year by year and group documents so an outsider can follow:

• Create folders by tax year with subfolders for:
  • Income
  • Deductions
  • Credits
  • Foreign accounts
  • Travel logs
  • IRS correspondence
• Label files in plain language and keep a short index at the front of each year’s folder
• During an audit, organization signals accuracy and speeds locating requested items
• If you must send documents to the IRS, provide copies and keep the originals safe

Practical checklist for former U.S. residents

• Copies of filed returns: Form 1040 and all schedules/attachments
• Foreign income forms and schedules, including Form 2555
• Foreign asset forms, including Form 8938
• FBAR filings (FinCEN Form 114) and bank/brokerage statements for each foreign account
• Proof of worldwide income: pay statements, contracts, foreign tax returns
• Receipts, invoices, canceled checks, payment records for deductions and credits
• Travel logs and diaries: entry/exit dates, business purpose, mileage
• Mailing and submission proofs: postmarks, delivery confirmations, e‑file acceptance notices, payment confirmations
• Employment records: W‑2s, contracts, policies linked to job‑related claims
• Foreign entity and trust records with Form 3520 and Form 5471, if filed
• Medical and dental records for medical deductions
• Theft or casualty loss documents: insurance reports, police reports, appraisals, photos
• Proof of residency changes and any expatriation paperwork

Why this matters for Americans abroad

Once you leave the country, your tax picture often spreads across borders: income may come from multiple places and accounts may be held in different countries. In this setting, the IRS focuses on accurate reporting of foreign income, correct use of the Foreign Earned Income Exclusion, and full FBAR compliance.

Clear records let you:

• Prove what you earned and where you kept it
• Demonstrate how you reported foreign income and assets
• Defend deductions or credits that depend on facts only you can show (e.g., days spent outside the U.S.)

Three years is the general audit window, so keep your full tax file for at least three years. Many hold documents longer when foreign accounts, business interests, or expatriation are involved. It costs little to keep digital copies, and a longer paper trail can be useful if questions arise beyond the usual timeframe.

For official tips on building a tax file, see IRS recordkeeping guidance: IRS Recordkeeping.

Aligning Form 8938 and FBAR records

When listing foreign assets and bank accounts, completeness matters:

• If you filed Form 8938, keep statements that support each reported item
• If you filed the FBAR, retain statements that show the highest balance during the year for each account and documents proving ownership or signature authority
• Aligning your Form 8938 with your FBAR records makes it easier to answer questions about accounts reported on each

Records for the Foreign Earned Income Exclusion (Form 2555)

If you claimed FEIE with Form 2555, retain documents showing where you lived and worked and how many days you spent outside the U.S.:

• Travel logs and entry/exit stamps
• Flight confirmations and employer letters
• Lease agreements, utility bills, or other proof of a foreign home

Practical steps to prepare for a potential audit

1. Build a year‑by‑year index: place it at the front of each tax year’s folder and highlight key forms like Form 2555, Form 8938, FBAR, Form 3520, and Form 5471.
2. Keep both digital and paper copies: scan key documents, store them securely, and back up files with clear file names (e.g., “2024‑FBAR‑BankName‑Statement.pdf”).
3. Match numbers: ensure totals on your return match statements and receipts. If you converted currencies, keep original-amount statements.
4. Preserve timelines: save email confirmations and postal receipts for returns, extensions, FBAR submissions, and IRS correspondence to prove timely filings.
5. Send copies, not originals: if the IRS requests documents, keep originals and send high‑quality copies, with pages numbered and labeled by tax year.

Former U.S. residents can’t control whether the IRS selects a return for review, but they can control how ready they are to respond. A tidy, complete file that documents foreign income, FBAR filings, and the Foreign Earned Income Exclusion can shorten an audit and reduce stress. For many, the habit of saving records becomes a form of insurance: it protects your story when you’re asked to tell it years later.