On the flip side, I wonder how often China audits Americans living there. Probably a lot.
Probably not at all. Remember, the IRS is big, bloated, cumbersome government bureaucracy. To even send them notices, it needs to have records, in Chinese, of these people, not to mention their bank accounts, assets etc...
It will need to have organized teams, software, systems, etc... to identify and track these so-called Americans living abroad. Is the IRS organized this way? I doubt it
The IRS receives ZERO assistance from the Chinese Govt, especially in the banking area. China is a complete black hole, as is much of the 3rd world.
Also, let's say they find a person, living in China for 20 years, who has never paid US taxes. Are the IRS ready to enforce it? Does the IRS work with Customs and ICE to arrest tax delinquents at the border upon entry? Does the law even allow it?