U.S. ETF dividend taxes

[Chris99]

I am a non-U.S. resident and non-U.S. citizen but I have an account with an American bank where I purchased ETFs that annually distribute dividends for about a few hundred dollars .. no withholding is applied at source, so I have to fill out a tax return every year where do I have to pay taxes since it is "U.S. source of income ".

Is there any U.S. expert here that is in the same situation who can tell me what happens if I don't make this tax return? in the end it is a matter of a few hundred dollars ... the paper and international shipping costs more than the taxes to pay to the U.S. gov ...

 

[Larin]

It is illegal to not file taxes in the US when you have tax liabilities. Given the amounts we are talking about here, probably nothing will happen, but you will be wilfully engaged in tax evasion, punishable by up to 5 years in prison: Tax Evasion Penalties and Other Consequences - FindLaw

My suggestion, either sell the ETFs, or transfer them to another broker who is aware of your non-U.S. status. If I had to guess, this bank doesn't know that you are a non-US resident, otherwise, they would either close down your account, or make you fill out W-8 BEN and withhold taxes at source.