My Dad’s health has declined rapidly and he has been paying into life insurance. He is an American citizen but has lived in the UK for about 30 years. Due to my Dad’s health my Mum has been having to deal with life insurance calls etc. My Dad revealed to my Mum 2 weeks ago that it’s likely that when he does pass away his life insurance will be taken by the US as he hasn’t been paying tax since he left. My Mum is rubbish with these things, my Dad is stubborn as hell so I can’t talk to him about it and it’s really above my intelligence 
can anyone shed some light as to what any of this could potentially entail? Thanks.
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As long as you or your mother are the beneficiaries of his life insurance, the IRS can’t touch it. If his estate is the beneficiary, the IRS could make a claim against his estate.
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Thank you! I really appreciate your reply. When you say “could,” does that mean it’s just a chance? I also have another question. My mum mentioned something about him cashing it out now and keeping it. I don’t know how much time he has left, but if he thinks it’s all going to be taken away, why keep paying into it? It seems crazy to me. But like I said, he’s very stubborn, and I think my mum is hesitant to ask.
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if there is cash value, he can borrow against 90% of it so he can have $$$ before he passes. Ask the insurance company about policy loans. Another avenue is to ask if there are critical care riders on the policy. this allows the owner to access the policy before he dies.
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If he surrenders the policy, he would lose money because there’s usually a surrender fee. He might also have to pay income taxes on any gains from the policy. When your father passes away, since he’s still a U.S. citizen, his estate will go through probate unless he has a trust. During probate, his death becomes public record, and any active collections can file a claim against his estate. It’s a good idea to talk to the original agent who sold
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I don’t know why people downvoted your comment when it is the only correct answer.
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Because people in the life insurance industry are educated by YouTube “experts” and not formal educators. Everyone thinks they’re an expert. I learn directly from the carrier. Not some MLM upline person.
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This is not 100% true.
If the IRS knows about the policy, they can lien it.
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Only while the policyowner is alive. Once he dies, they cannot file a lien against a benefit as long as the beneficiary is not his estate.
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He hasn’t paid taxes in the US for 30 years. My guess is that it’s been liened already but of course I’m guessing.
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They should consult a tax attorney who has experience with foreign earned income and bona fide residency. If his taxable income was below the standard deduction, he might not have needed to file taxes.
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Agree but regarding OP, they may already know they owe and that’s why their parents are telling them that they won’t be entitled to the death benefit.