# Filing US Taxes from Canada



## Militaryman

I don't really consider myself an ex-pat, having been a Canadian citizen from birth, but I had the misfortune of being born in the US while my father, an officer in the RCAF, was on military exhange service with the USAF. I left the US at age 2 back in '64. The family had assumed I had dual citizenship because of US birth, and when I joined the Canadian military in 1980 and made my oath of allegiance to the Queen, I had thought I had made the necessary expatriating act (IAW the INA) to say goodbye to the US. With changes to the IRC introduced with the HEART Act of 2008, it seems I might have been wrong, TBD.

Like many, I've only recently discovered the requirement for dual CAN-US citizens to file US taxes, and I find myself treading new tax waters as I struggle to find some evidence that I might not be a US citizen under the INA "subject to the jurisdiction thereof" clause. Anyway, all of my income comes from the federal government and I've lived in Canada for the past 48 years. I've done my homework on the necessary US tax forms, but I don't know if I can claim the following as deductions or where to indicate the amounts in the tax forms: CPP contributions, military pension comtributions (mandatory under the CF Superannuation Act), UI contributions. The foreign income exclusion does not allow me to protect all my income, but I'm thinking foreign tax credits should easily be sufficient to prevent me paying any tax to the US without using the foreign income exclusion.

Any assistance would be appreciated. I'm trying to avoid paying a tax preparation fix several hunder dollars for what should be a simple exercise.

thanks

Militaryman


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## Militaryman

Excuse the spelling errors in the last sentence. It should read "...paying a CPA or tax preparation firm several hundred dollars..."


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## Cafreeb12

Having served in the military in Canada *thank you* and having worked for the Canadian government may be two very good arguments that you thought you relinquished your U.S. citizenship. As far as the tax forms and he onerous FBAR are concerned if you never filed that paper, I would attach a letter explaining why you didn't file it. I am in your boat in that I had never been told about FBAR at all and had previously been told by the IRS I did not have to file due to not having met the requirement to file. Not knowing that even if you do not meet the requirement to file you must file FBAR in those years your accounts exceeded a 10,000 dollar balance on any day. For me I think there were years when even that requirement was not expected of me. However, at this point the actual rules seem iffy and advice even from tax attorneys and accountants has differed. 

I like you am finding the forms themselves extremely confusing. Even contradictory for my situation. I'm not sure if there is anyway to avoid having some one file for you other than doing it yourself which I won't do since I am leery of making a mistake. 

I honestly would seek advice even just once from a international tax accountant AND from the IRS tax advocate for your area. The numbers for the advocates are listed on the IRS site *will try to find them for you* I believe you will be fine to file everything, use the reasons in your letter you gave here. Then if I were you I would take formal steps to renounce IF you do not want to be a U.S. citizen going forward. 

I wish I could be of more help. Good luck with this situation. We are all in in this maze here together.


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## Bevdeforges

Perhaps I'm misunderstanding you, but I don't understand why you would prefer to use your foreign tax credits without using the foreign income exclusion. Actually, the two work together - the exclusion as a "quick fix" for the first $92,000 or so of earned income and then the tax credits for anything above and beyond that.

I'm afraid that for US tax purposes, what you pay toward your pension or other "social insurances" isn't deductible (with the possible exception of what you pay toward "health insurance" but only if it's more than a certain percentage of your income). The easiest way to approach the US forms is to just go with the "standard deduction" to start with - and as long as the exclusion plus tax credits for any excess income cover you, then don't bother with the detailed deductions at all.

There is also the option, if you believe that you swore off your US citizenship and you have limited or no contacts left with the US, to simply "fly beneath the radar" and continue as you have been doing up until now. Unless you have fairly high levels of investments, it's pretty unlikely the IRS is going to come looking for you. (They've got far bigger fish to fry in this affair - and they're actually looking for big time tax evaders with complex overseas investments.)
Cheers,
Bev


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## Fifi_in_Victoria

I have an acquaintance in a similar situation who left the US at age 4. I would think that if you've never had a SSN or a US Passport, you're not going to be on anyone's radar.

I've read some interesting reports on the GAO website, and there is no reliable way to even estimate how many US citizens live abroad.



Bevdeforges said:


> There is also the option, if you believe that you swore off your US citizenship and you have limited or no contacts left with the US, to simply "fly beneath the radar" and continue as you have been doing up until now. Unless you have fairly high levels of investments, it's pretty unlikely the IRS is going to come looking for you. (They've got far bigger fish to fry in this affair - and they're actually looking for big time tax evaders with complex overseas investments.)
> Cheers,
> Bev


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## Nononymous

Fifi_in_Victoria said:


> I have an acquaintance in a similar situation who left the US at age 4. I would think that if you've never had a SSN or a US Passport, you're not going to be on anyone's radar.
> 
> I've read some interesting reports on the GAO website, and there is no reliable way to even estimate how many US citizens live abroad.


The only potential issue here is the US birthplace on the Canadian passport, which may cause problems traveling to the US.

Otherwise, if you left as as child and never had any further connection to the US, stop reading and go no further, you can probably ignore this.

You mentioned that your father was in the military when you were born. I would investigate this. Children of foreign diplomats born in the US do not receive citizenship; it may well be that if your father was there in an official government capacity, you are not in fact considered a US citizen. In which case your problems are solved. If I were you, if it ever came up at the border, I'd just say that my father was a military attache so I couldn't get citizenship and that's the end of it.


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## Militaryman

@bev
Thanks for help. I'm trying to keep my return simple. The foreign tax credit equals what I would owe (at least for 2010). Using the foreign income and housing exemptions would just make the accounting far more complex than necessary.

@ fifi. Although I don't have a SSN or US passport, flying beneath the radar is not an option as I regularly cross the border on military business using my Cdn passport. Two years ago I was given a little grief by a US border agent claiming I was a US citizen because I hadn't made a renounciation declaration at a US consulate/embassy (IAW INA Sect 349a(5)). I didn't argue at the time as I had a plane to catch and a meeting to get to!

@non
I have already begun investigations down this path. Unfortunately my father passed a few years ago and I am searching thru my military connections to find out what orders he may have travelled under. There are not a lot of readily accessable records from 1961! I know my parents did not use diplo passports (i.e. he was not accredited to the embassy staff), but he may have been travelling under a specific CAN/US Status of Forces Agreement (SOFA) for exchange personnel, or he may have been included under the NORAD/NATO SOFA in effect at the time.

I'm prepping the tax returns I hope I won't have to use!


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## Fifi_in_Victoria

Militaryman said:


> @ fifi. Although I don't have a SSN or US passport, flying beneath the radar is not an option as I regularly cross the border on military business using my Cdn passport. Two years ago I was given a little grief by a US border agent claiming I was a US citizen because I hadn't made a renounciation declaration at a US consulate/embassy (IAW INA Sect 349a(5)). I didn't argue at the time as I had a plane to catch and a meeting to get to!


Yes, that birthplace is the one quirk, isn't it. I crossed the border in July (knowing full well that I am supposed to use my US passport). When the friendly border agent asked my citizenship, I answered that I was dual, and he asked me which passport I wanted to use. I handed him my Canadian one with no problem. Obviously he didn't know the rules... or didn't care. That was at Port Angeles, and we were one of the earlier cars off of a full ferry. Can't guarantee that would happen every time, though.

I know the rules of citizenship have changed many times, even in the last 20 years. I'd do a bit of further investigating to see if you 'really' are a US citizen. State seems to be reasonable to deal with. Explain your circumstances to them and see what their take is. My dual Brit/US friend received a letterfrom State when she turned 21, asking her to pick one. She never answered, and still continues to hold two current passports. I think the rules change so much that no one can be bothered to keep track of which rule existed when.

BTW, thanks for the service to Canada! My husband just retired after 26 years in the Navy. Good times!


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## Nononymous

Militaryman said:


> @non
> I have already begun investigations down this path. Unfortunately my father passed a few years ago and I am searching thru my military connections to find out what orders he may have travelled under. There are not a lot of readily accessable records from 1961! I know my parents did not use diplo passports (i.e. he was not accredited to the embassy staff), but he may have been travelling under a specific CAN/US Status of Forces Agreement (SOFA) for exchange personnel, or he may have been included under the NORAD/NATO SOFA in effect at the time.


It's an interesting question - what happens to someone born in the US to diplomat parents who doesn't qualify for citizenship, but has the birthplace on their passport? Do they need to get a letter from the State Department?

In your case, although it's not 100 percent secure and not so useful on holidays, if you're on military business, with military ID and possibly even in uniform, and you tell the border agent in a clear and commanding tone that your birth occurred while your father was on an official exchange and therefore you are not a citizen - I can't imagine they'll give you much trouble.


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