# Canadian never filled and need to travel to USA.



## albator73

Hi,

I just learned and still trying to not panic, I had a obligation to fill my tax return to IRS and FBAR and never knew or even hear about it. 

My situation is I was born in USA and left around 4 year old and grow up in Quebec for 35 years. In 2003, I decide to get my US passport and SSN. Went to US Consulate in Montreal and nobody even told me about Tax return. Never receive any letter or email or phone call of IRS. 

My questions:
- I need to travel to USA very soon for a new job where I will be working 1 week by month in USA and rest in Canada. Am I at risk to cross the border?

- What should I be my first step, i'm confuse with all the information I been reading?

- Should I get help of professional and does anyone recommend one around Montreal which is not expensive?


Thanks for you help.
Albator73


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## Madonna

albator73 said:


> Hi,
> 
> I just learned and still trying to not panic, I had a obligation to fill my tax return to IRS and FBAR and never knew or even hear about it.
> 
> My situation is I was born in USA and left around 4 year old and grow up in Quebec for 35 years. In 2003, I decide to get my US passport and SSN. Went to US Consulate in Montreal and nobody even told me about Tax return. Never receive any letter or email or phone call of IRS.
> 
> My questions:
> - I need to travel to USA very soon for a new job where I will be working 1 week by month in USA and rest in Canada. Am I at risk to cross the border?
> 
> - What should I be my first step, i'm confuse with all the information I been reading?
> 
> - Should I get help of professional and does anyone recommend one around Montreal which is not expensive?
> 
> 
> Thanks for you help.
> Albator73


I, too, recently found out about my filing obligation after living in Canada for 37 years. I am close to back filing 6 years of tax returns and FBARs. I recently (early this month) went to the U.S. and had no problems at the border. I am doing my own taxes and feel confident in doing so after much research and tons of helpful information from Bev Deforges, a moderator on this forum. I recommend reading her posts in learning how to file your returns if you want to do them yourself. Good luck! You are not alone!


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## albator73

Thanks. This is my priority this week-end. 
I saw lot of posts of people filling out tax, is it 3 or 6 years of tax return?
Also do you receive a confirmation and how much time does it take to receive it?
Should I contact the IRS or Consulate to let them know? 
I read on IRS site quiet disclosure can have several penalty.


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## Madonna

albator73 said:


> Thanks. This is my priority this week-end.
> I saw lot of posts of people filling out tax, is it 3 or 6 years of tax return?
> Also do you receive a confirmation and how much time does it take to receive it?
> Should I contact the IRS or Consulate to let them know?
> I read on IRS site quiet disclosure can have several penalty.



As for how many years to back file, it depends. You might even be able to file 2011 and go forward from there. I have read on the IRS site that 5 years back is good. It's up to you and your situation. You can find the forms on the IRS site. They have forms for previous years. 

I will be filing forms 2555, 1040, possibly 1040 Schedule B, 8891 (for my RRSPs), as well as TD F 90-22.1 (FBAR to report bank accounts and other financial accounts).

I highly recommend that you read Bev Deforges posts. She has provided so much information on what forms to file and which IRS publications to get info from.

As for the quiet disclosure, that is not what we're doing. That refers to sending in amended returns and disclosing income that was previously, intentionally undisclosed to evade taxes. We're not tax cheats, we just didn't know.

You'll be fine! Just read the posts on this forum and then file your returns. From what I've read, the IRS does not send confirmations. You can send your returns by courier or express post to get a confirmation that they received your returns. Otherwise, no news is good news.


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## Bevdeforges

Madonna has given you the scoop. Take a look at the stickies (the messages posted at the top of this forum) - one of them contains a series of links to messages describing the basics of filing your returns.

For your trip to the US, I wouldn't worry about anything as long as you have your US passport. Despite rumors to the contrary, they aren't looking to seize non-filers at the border. (In fact, they have no reason to think you needed to file until and unless the IRS starts hassling you.)

As far as how far back to file, it depends on a number of factors, most of which are related to how "simple" or "complex" your financial situation might be. The statute of limitations on income tax returns is still 4 years, I believe. That usually translates to filing the current tax year (i.e. 2011, which is due by June 15th 2012) and three years prior. If those filings demonstrate that you owe little or no taxes, then you should be ok.

The FBAR filings are for those with non-US bank and other financial accounts that, in total, exceed $10,000. Those go to the Treasury Dept., not to the IRS. Until quite recently, there hasn't been much fuss about back filing those. As long as you're declaring the interest or other income from the accounts you disclose, I'd probably just file FBARs for the same years you're filing your income tax for and see what happens.

The FATCA stuff is trickier, but unless you have certain types of investment assets or accounts, you may not need to bother with those. 

If your financial situation is fairly straightforward (i.e. your main source of income is salary or other employment income, with perhaps a bit of bank interest) you should be able to file for yourself. Once you take the foreign earned income exclusion, you've eliminated much of the bit that American residents agonize over with their returns.

You won't get any confirmation from the IRS when you file those returns - either the current one or the back filings. On the back filings, you should probably include a cover letter explaining that you just learned of your obligation to file in the US.
Cheers,
Bev


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## Omater

I have recently traveled into the US and there were no questions about my tax obligations. The border guard was more interested in talking about my hometown where he had received military flight training years prior.


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## Vangrrl

Hi!

I found out about my tax filing requirements back in July - after living in Canada for 35 years (moved here when I was 9 months old, my parents are not US citizens). I've travelled on a US passport since 2000.

I live at the border and have crossed multiple times since July with absolutely no mention of my tax status. I did finally back file 4 years of 1040s/FBARs back in October. 

I don't honestly know *how* tax status could easily be checked at the border. It is a very nebulous concept to be tax compliant - you could legitimately not need to file a 1040 or an fbar form. 

My own goal was to be tax compliant before having to renew my US passport (in 2014) which likely coincides with when FATCA will be in place.

Hope that helps!


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## albator73

Thanks for your help and sharing your experience.

Does anyone ever request a CanPass or Nexus pass over the last year to cross the U.S. border faster without never had fill tax return? I'm about to do it because I need for next following week but I was wondering If I should wait to cleared all my tax issue in case it warn IRS.


Thanks
Albator73


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## Bevdeforges

There is no reason for the Customs and Border folk to bother notifying the IRS if you haven't filed. (Only if the IRS has already been in touch with you to ask about the matter.) Otherwise, the two agencies don't talk much.
Cheers,
Bev


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## USCNOMORE

I have lived in Canada since the age of 8 (1971)am a Dual citizen holding a current Canadian passport but have not renewed my US passport as I was not aware I was still a US citizen after becoming a Canadian citizen. Much to do to comply with US tax filing but my question here is what will happen if I travel to the US with a Canadian passport that shows I was born in US?


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## Bevdeforges

USCNOMORE said:


> I have lived in Canada since the age of 8 (1971)am a Dual citizen holding a current Canadian passport but have not renewed my US passport as I was not aware I was still a US citizen after becoming a Canadian citizen. Much to do to comply with US tax filing but my question here is what will happen if I travel to the US with a Canadian passport that shows I was born in US?


Probably nothing. Though they may ask you for your US passport and give you a "stern talking to" about entering the US on a non-US passport. Or maybe not. 
Cheers,
Bev


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## Madonna

USCNOMORE said:


> I have lived in Canada since the age of 8 (1971)am a Dual citizen holding a current Canadian passport but have not renewed my US passport as I was not aware I was still a US citizen after becoming a Canadian citizen. Much to do to comply with US tax filing but my question here is what will happen if I travel to the US with a Canadian passport that shows I was born in US?



I, also, am a US citizen with a Canadian passport that shows I was born in the US. I have travelled to the US at least once a year and sometimes twice since I obtained my Canadian passport over 5 years ago. I have never had a US passport. For all but the last trip in January of this year, I travelled blissfully unaware that I was obligated to file income tax returns to the US. I was never once asked or told that I should be filing and I was never told that I should have a US passport. I have been asked twice if I renounced my US citizenship. And I was asked once if I "maintained" a US passport. There was nothing further after I answered "No" to those two questions. That is my experience, if it helps any.


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## USCNOMORE

Madonna said:


> I, also, am a US citizen with a Canadian passport that shows I was born in the US. I have travelled to the US at least once a year and sometimes twice since I obtained my Canadian passport over 5 years ago. I have never had a US passport. For all but the last trip in January of this year, I travelled blissfully unaware that I was obligated to file income tax returns to the US. I was never once asked or told that I should be filing and I was never told that I should have a US passport. I have been asked twice if I renounced my US citizenship. And I was asked once if I "maintained" a US passport. There was nothing further after I answered "No" to those two questions. That is my experience, if it helps any.


Thank you, it does help...I do not maintain a US passport and do not intend to do so, in fact I have pretty much made up my mind to take measures to relinquish my US citizenship so applying for a US passport seems somewhat hypocritical.


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## hip2b2

*USCship was revoked*

I have found some missing personal documents that clarify my position re USC and facts that will perhaps be of value to others.

In 1976 I applied for and became a Canadian citizen. This did not require that I renounce my USC. In 1980 I received a letter (registered) from the U.S. State Department that said:

"Section 349(a) (1) of the U.S. Immigration And Nationality Act reads as follows:

Section 349(a) From and after the effective date of this Act a person who is a national of the United States whether by birth or naturalization, shall lose his nationality by-
(1) obtaining naturalization in a foreign state upon his own application... "

Some months following this I received a "Certificate of Loss of Nationality"

I also found an article published in a Canadian newspaper in 1990 which indicated a new policy in place which would allow a quarter of a million Canadians to apply to regain their U.S. citizenship.

So in summary, old timers may not have a U.S. tax problem, but more recent U.S. emigrants likely do. 

Hope this is of some interest to someone.

hip


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## maz57

To hip2b2,

You are very lucky. If I were you I would frame that CLN and put it front and center above the mantle. I moved to Canada around the same time and never got around to becoming a Canadian. If you travel to the US, it wouldn't hurt to carry a copy of it to go along with your Canadian passport just in case some overzealous US border guard decides to act on his own initiative and tell you that "you are a US citizen until we tell you you're not a US citizen". (There is a report of a Vancouver Island resident actually being told that.) That should stop him dead in his tracks.

I was a "landed immigrant" (now "permanent resident") and lived so far out in the middle of nowhere that any thoughts about dealing with citizenship issues was the furthest thing from my mind. In the pre-internet era I'm not even sure how anyone would've gotten the information they would have needed to make an informed decision where I lived. In later years even though I moved back to civilisation life just kind of got in the way and I never got around to it. Boy, do I ever regret my laziness now that this US tax business has come to the boil. I am working hard to rectify that error ASAP.

To the best of my knowledge the oath of Canadian citizenship included relinquishment of any other citizenship or allegiance up to some time in the mid eighties. Anyone who became a Canadian up to about that time is probably not a US citizen but only a CLN can guarantee absolute certainty. Yours is the first case I've heard of where a registered letter from US State Department arrived without action on your part. Perhaps the Canadian government informed the US government?


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## hip2b2

maz57 said:


> To hip2b2,
> 
> You are very lucky. If I were you I would frame that CLN and put it front and center above the mantle. I moved to Canada around the same time and never got around to becoming a Canadian. If you travel to the US, it wouldn't hurt to carry a copy of it to go along with your Canadian passport just in case some overzealous US border guard decides to act on his own initiative and tell you that "you are a US citizen until we tell you you're not a US citizen". (There is a report of a Vancouver Island resident actually being told that.) That should stop him dead in his tracks.
> 
> I was a "landed immigrant" (now "permanent resident") and lived so far out in the middle of nowhere that any thoughts about dealing with citizenship issues was the furthest thing from my mind. In the pre-internet era I'm not even sure how anyone would've gotten the information they would have needed to make an informed decision where I lived. In later years even though I moved back to civilisation life just kind of got in the way and I never got around to it. Boy, do I ever regret my laziness now that this US tax business has come to the boil. I am working hard to rectify that error ASAP.
> 
> To the best of my knowledge the oath of Canadian citizenship included relinquishment of any other citizenship or allegiance up to some time in the mid eighties. Anyone who became a Canadian up to about that time is probably not a US citizen but only a CLN can guarantee absolute certainty. Yours is the first case I've heard of where a registered letter from US State Department arrived without action on your part. Perhaps the Canadian government informed the US government?


From what I see in my documents the US Consul requested the information from the Canadian Government in an Application for a Search of Citizenship Registration Records.

To the best of my recollection the Canadian citizenship oath did not require relinquishing any other citizenship, which if i recall at the time surprised me coming from the "all or nothing/love it or leave it U.S." I'm not saying which philosophy is better, but certainly the previous U.S. strategy has not withstood the test of time.

As for the tax implications for those who have not filed and find themselves both a USC and other; my guess is that this will become a non-issue in the next little while with the IRS rules being changed or the rules just not being applied. 

Finally while it would be an inconvenience to not be allowed into the U.S. I don't expect that would stand a court or public relations challenge given the circumstances. 

hip


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## Terranova

Perhaps my story is helpful. 

My sister and I are dual US/Canadian citizens who have lived in Canada since the 1960’s. Neither of us filed US tax returns, although I am presently doing a “quiet disclosure”.

For the last 10 years my sister crosses the border in Niagara Falls about 3 or 4 times a month during winter to go skiing in upstate New York. She uses a Canadian passport and the US border people have never commented or questioned her on this. Her most recent trip was two weeks ago.

I work for a Canadian subsidiary of an American engineering company and enter the USA for short visits through various border locations, including flights from Europe and South America, once or twice a month. Up to recently I have always used a Canadian passport and I usually declared that I was going there on business. 

About one year ago the border protection people started to question me about my lack of a US passport. The questions became more pointed over time. They began with “Do you have a US Passport?” and then became “Where is your US passport?” and “Why don’t you have a US passport?” In all cases I was admitted to the US. Each session was accompanied by a lot of furious typing of information into my file.

I noticed that this happened only on my business trips and that passport questions never came up on the couple of personal trips that I made during that time. 

Finally about 2 months ago I was given a long talking to by an American border protection agent at the customs preclearance in Toronto Pearson Airport. He emphasized that I should be using a US Passport and that he didn’t understand why I wasn’t claiming my birthright. All this was done in a friendly way. He gave me the address of a US post office just across the border from my home in Niagara Falls so I could apply for one easily (you can’t mail in an application from Canada, the alternative for me would have been to travel to the US Consulate in Toronto which would use up a whole day of my time). He also dismissed When I said that I didn’t want a passport until I had made peace with the IRS, he dismissed this by saying that they don’t talk to the IRS.

Seeing the writing on the wall, and bit nervous that someday I might be blocked from entering the US, I followed his directions and got a US passport a last month. (by the way they will now mail a US passport from the states to a Canadian address, a new practice I believe). I was in the process of becoming tax compliant at the time, (thanks for all you useful advice, Bev) so it seemed to be the natural thing to do.

Why me and not my sister? It would appear, in our case at least, that they distinguish between business travel and personal travel. I am sure it really is a lot more complex than that, but this is my story anyway.


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## maz57

After doing a little research this morning I discovered my memory was more than a little hazy. Apparently the Canadian citizenship oath contained renunciatory language until a Canadian court ruled it illegal in 1973. The language was subsequently removed; I haven't been able to determine exactly when; sometime between 1973 and 1977 when the Citizenship Act was revised to specifically allow dual citizenship. 

I have heard reports of that some citizenship ceremonies continued to use the old oath longer than others. (Wanted to use up the old forms? Remote outpost that didn't get the message and/or the new forms?) 

There is a case in a US Court of Appeals (Richards vs. Sec of State, 1985) in which a USC who became a Canadian in 1971 and was informed by US state he had lost his US citizenship contested the ruling. His argument was that even though he took the oath and understood it's meaning, he did so under duress because he needed Canadian citizenship in order to get a job he was applying for. He lost the appeal.

Apparently US policy (and case law) has changed over the years. Acquiring another citizenship has always been an "expatriating act". Back in 1980 US State assumed that by becoming a Canadian you intended to lose US citizenship unless you provided evidence to the contrary. Nowadays, the opposite is true. The US government assumes you intend to keep US citizenship unless you tell them otherwise.


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## hip2b2

maz57 said:


> After doing a little research this morning I discovered my memory was more than a little hazy. Apparently the Canadian citizenship oath contained renunciatory language until a Canadian court ruled it illegal in 1973. The language was subsequently removed; I haven't been able to determine exactly when; sometime between 1973 and 1977 when the Citizenship Act was revised to specifically allow dual citizenship.
> 
> I have heard reports of that some citizenship ceremonies continued to use the old oath longer than others. (Wanted to use up the old forms? Remote outpost that didn't get the message and/or the new forms?)
> 
> There is a case in a US Court of Appeals (Richards vs. Sec of State, 1985) in which a USC who became a Canadian in 1971 and was informed by US state he had lost his US citizenship contested the ruling. His argument was that even though he took the oath and understood it's meaning, he did so under duress because he needed Canadian citizenship in order to get a job he was applying for. He lost the appeal.
> 
> Apparently US policy (and case law) has changed over the years. Acquiring another citizenship has always been an "expatriating act". Back in 1980 US State assumed that by becoming a Canadian you intended to lose US citizenship unless you provided evidence to the contrary. Nowadays, the opposite is true. The US government assumes you intend to keep US citizenship unless you tell them otherwise.


As I mentioned, a 1990 article in a Canadian newspaper indicated a U.S. rules change that would allow even those naturalized Canadian of U.S. birth to apply to regain their USC. Apparently there were changes on both sides of the border. 

I can imagine a case where a person planned on losing their U.S. citizenship by becoming a Canadian and the U.S. rule change retroactively assumed an intention to keep U.S. citizenship. So without the "Certificate of Loss of Nationality" the situation could be open to interpretation.

It may be that as ancient mariners noted when entering uncharted waters "Here there be dragons".

hip


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## maz57

"It may be that as ancient mariners noted when entering uncharted waters "Here there be dragons".

LOL Hey, good one hip! As an avid sailor I especially appreciate that line. I remember seeing a repro of an old hand drawn chart with that exact phrase at the margins just before one was about to sail off the edge of the earth.

RE: the US government offering to reinstate US citizenship. That may be a result of several US court rulings which said that regardless of the actual wording of a citizenship oath, if it was a routine or standard oath the US government had to assume the intent was to maintain US citizenship, not relinquish. This reversed previous State Department policy which pretty much disallowed dual citizenship.

Bottom line for US expats who became Canadians back in that era; get that CLN and you are home free. That would produce no tax liability because the loss of US citizenship would be backdated to many years ago. The statute of limitations would have long since run out.


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## hip2b2

Here is an interesting bit of information for all dual US and something citizens: 

"Most U.S. citizens, including dual nationals, must use a U.S. passport to enter the United States." (from Dual Citizenship | Embassy of the United States Ottawa, Canada).

Given this, Terranova's story makes a lot of sense. The interesting thing is that US 
border service are surprisingly forgiving.

How bout that?

hip


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## Bevdeforges

Terranova's experience is probably quite typical. As she says, the fact that she traveled to or through the US repeatedly on business probably resulted in someone closer checking - but I suspect she may have been entering the US primarily by air. Passport control at most airports is considerably more stringent than for those crossing into the US by car from Canada.

But, as she was told, the IRS does not have access to border crossing records - or certainly does not appear to.

And frankly, there don't appear to be any cases of US citizens living abroad (or those who believe they have relinquished their US citizenship in some manner) being prosecuted for failure to file their taxes unless some sort of big time evasion is involved. The US is attempting to gain access to bank and other financial records in foreign countries with this FATCA legislation, but how much additional information they'll be able to obtain is still somewhat unclear.

The issue of back taxes generally only comes up if an overseas US citizen decides to return to the US to live. If they want to sponsor their foreign spouse for a visa, then yes, they have to get square with the IRS as part of the sponsorship process. But under some circumstances, it could be perfectly legit for them not to have been filing (i.e. no income or income less than the filing threshold) for the time they were living abroad.
Cheers,
Bev


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## maz57

The requirement for USCs to enter the US with a US passport has been in effect forever. In fact it is illegal for a USC to exit the US without a US passport. None of this was ever enforced until the gradual tightening of US border security after 9-11. It was so ignored that most people including myself didn't even know about it. If the border guards knew about it back then they sure as heck never mentioned it to me.

A few years after 9-11 they came up with WHTI. (Western Hemisphere Travel Initiative) Living within about 10 miles of the border, I crossed regularly with only my birth certificate going south and my tattered cardboard landed immigrant card returning north. WHTI gradually ramped up enforcement and coincided with installation of enhanced information systems. Travel by commercial carrier came first; travel by car at land crossings was the last. 

I was finally forced by US customs to get a US passport and by Canada customs to get a modern Permanent Resident card. In the case of US customs I've also got one of those Passport cards with the RFI chip so that by the time I roll up to the booth they've got my complete record on the screen before them. I was once told by a smiling US guard as I handed over my card "I love these little cards". 

The date on my passport is early 2008 so by that time they had really started to crack down.


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## Bonnie151

maz57 said:


> The requirement for USCs to enter the US with a US passport has been in effect forever. In fact it is illegal for a USC to exit the US without a US passport. None of this was ever enforced until the gradual tightening of US border security after 9-11. It was so ignored that most people including myself didn't even know about it. If the border guards knew about it back then they sure as heck never mentioned it to me.


Yes - after my son was born (2002) on a whim one day I phoned the embassy in London to see whether he would be able to apply for US citizenship (being unaware that because of me he was automatically consided a USC). I was informed by a very grumpy embassy official that not only was my son American, but that it would be illegal for him to enter the US on his UK passport. I took this to mean that if he tried to enter with me on a UK passport he'd be turned back as they'd see my US passport, but if he entered with his father, he'd be admitted on a UK one (as how would they know he has an American mother). All in all, being turned away at the border was not a risk I was willing to take, so I registered his birth and got him a US passport. If I hadn't fulfilled the citizenship requirements, there was a No Claim document which the Consulate would have given me to allow him to enter the US with me (i.e. me on my US passport and him on his UK one).


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## expat54

*Hi there*

I am a single female in my late fiftees, with the intention of returning to the US for family reasons, I am dual citizen living in Quebec since 1980, and like most people on here was unaware of the fact that I needed to file US income tax return, unless you had a net income above $75000 at the time which is now I believe up to $90,000 approximately. i found this out before the August deadline but had a hard time finding an accountant in Montreal that would do US taxes, or one that did not charge a fortune, so I gave my returns from the last 3 years to an accountant in the US and explained the deadline, but he was not at all familiar with US/CA tax treaties and he sat on them, did nothing and kept saying that this deadline did not apply to me and it is only for US citizens that are hiding money offshore!... to make a long story short i missed the famous deadline and the accountant in question was not even returning my calls. I finally found an accountant here in Montreal that was familiar with the situation and i did send my returns for 2008, 2009, 2010. However I did not send in the other form that lists the bank accounts including rrsp's, I simply am not sure how this is relevant or would be treated by the IRS since the income or gains from any money earned is included in the income tax returns, besides the balances in the bank account fluctuate from month to month depending on expenses, at certain times during those 3 years that I filed the balance would show a high positive amount simply because I borrowed from my line of credit against the property equity, so in essence it is still negative. The other question is that I sold my home in 2011, the equity i have left is essentially my life savings at this point and I would like to transfer it a US bank so that I could buy a property and move back there for family reasons, but i need to know how this situation would affect my finances, I cannot afford to lose any of that money, since I will be moving there without a job security. In Canada we have no capital gains on the principal residence, in the US the gains have to be reinvested within a year or they becomes taxable, I need to know whom i should consult before i make that jump, I also should mention that I have canadian capital losses that date back from 10 years that i never benefited from, I know this is an accounting question but it is very confusing and scary.


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## Bevdeforges

OK, the good news is that you're operating based on old tax information. Things have changed in the last few years. On selling your personal residence there is no tax due on the first $250,000.

You've got the last three years of tax returns filed. The due date for filing for 2011 is coming up (June 15th for those who live abroad) so get that one done. You should file the Treasury form (now called the FBAR form) but I'd start out by filing that one for the current year. It's nothing but a listing of your bank accounts along with the high balance for the year. (Unless you've got tricky investments that aren't being reported, a good faith estimate of the high balance for the year should suffice.)

If you have financial investments over $200,000 you may be subject to the new FATCA forms, which need to go in with your tax returns. But again, unless you have something to hide, I'd start with filing the current year's forms and see if they ask you to back file.

The information you need for filing your own forms is available on the IRS website. Publication 54 is for overseas filers - and the overall guide to how to file US taxes is Publication 17.
Cheers,
Bev


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## expat54

*Hello Bev*

Thank you so much for your reply, I certainly will have to get this done asap. I am not good with accounting or paperwork, I actually hate it, and i usually procrastinate, but I cannot put this off any longer...

Regards


Expat54


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## jimmyjam

*checking taxes at the border*



Vangrrl said:


> I don't honestly know *how* tax status could easily be checked at the border. It is a very nebulous concept to be tax compliant - you could legitimately not need to file a 1040 or an fbar form.


I would think it would be very, very easy for them to implement this.

First of all, for people who actually have a tax liability (that is, some taxes or penalties that are due but they have not paid). 

Second, they also have information on people who have received US income but not reported it; the US income payer (employer, bank, etc) has had to report the income to the IRS. If it is a large amount and you didn't file a corresponding return they could have a red flag attached to your social security number.

Thirdly, if there is a total absence of ever having filed a 1040 or a FBAR, and you are for example travelling on a commercial flight or in an average to nice car at the border (you must therefore have a bank account with at least 10,000 dollars at some point in your life, right?)

Finally, going forward, if they receive FATCA information concerning you but you have not filed it will be very easy to match that up with your SSN and keep a list of offenders for the border control.

Look, they have a huge no-fly list, don't they? All they need is to gather delinquent SSNs from the IRS. That is a small patch add-on on their computer system. Absolutely not a huge leap of technology!

Perhaps it hasn't happened yet, perhaps not this year, but you can be sure it is in the plan and it will happen.

As for those who say "lived abroad for 20 years, never had a problem"... that was then and this is now. They are planning and working on these things you can be sure.


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## Bevdeforges

First of all, even this "proposed" legislation (which may or may not ever make it into being) only deals with withholding passports from those against whom the IRS has issued a penalty order. It takes a rather long time between either not filing a return or leaving something significant off a tax return before the IRS issues an order saying that you are delinquent and subject to penalties. Believe me, you would know if your name is on that list.

Secondly, all your examples assume that someone crossing the border into the US actually has a SS number that might be linked to tax returns (filed or not).

Thirdly, the FATCA legislation is trying to get bank account information on US citizens with overseas accounts. They have not yet been too successful in getting this organized. Switzerland and Germany are the only two countries so far who have reported that banks are dropping US customers. The IRS has no way of knowing your foreign income - certainly not your salary income, which is subject to the FEIE anyhow. And if you read the instructions for the forms for reporting investment in a foreign company, you'll clearly see they are looking for Americans holding foreign company stock as a "financial investment" - not a small business set up so that the citizen and his or her family members have jobs and can pay the bills.

I will grant you your point that tax legislation is getting tougher - but US citizens abroad only really have to worry if they have accounts or investments they have previously been hiding from the tax authorities (IRS or any other). And the filing requirements for form 8938 (which kind of summarizes all the other forms linked to this) were specifically made higher for overseas residents than for US residents. (See here for details: IRS Releases Guidance on Foreign Financial Asset Reporting)

Plenty of other governments require declaration of foreign bank accounts and investment accounts. I file a list of my US bank accounts and my US IRA and 401K every year along with my French tax return. They list obscene penalties for failure to report this information, too. 

Taxes are a PITA anywhere you are subject to them. But you deal with them as appropriate to your situation.
Cheers,
Bev


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## jimmyjam

*anybody with a US passport has a SSN....*



Bevdeforges said:


> First of all, even this "proposed" legislation (which may or may not ever make it into being) only deals with withholding passports from those against whom the IRS has issued a penalty order. .


I am not talking about the 50,000 tax liability - refusal-to-issue passport legislation.

I am simply talking about how completely easy it will be for them to start identifying non-compliant FBAR filers at the border. They absolutely know you live abroad because your passport is issued by an embassy abroad!!! What on earth would stop them from crossing that with a very simple database showing which SSNs have filed an FBAR. That is a very simple computer program, I could do it myself on Excel. If a middle class person with a foreign issued passport steps up to the booth, I just check the SSN against the FBAR filers, if non-filer then ... RED FLAG! Check in the pocketbook! Do they have a visa card, a debit card with their name on it?? Gotcha!!! So Easy peasy in this internet age. And might bring in minimum 10,000$ per head! Why on earth wouldn't they do it!!! 



Bevdeforges said:


> Secondly, all your examples assume that someone crossing the border into the US actually has a SS number that might be linked to tax returns (filed or not).
> Bev


Of COURSE anyone who holds a US passport to cross into the US also has a US SSN.... do you actually think that they don't link up this information when they swipe your passport at the border?

I have a friend who gets stopped each time she enters the USA because she has the same name as a fugitive criminal. She gets interrogated but more or less quickly released becaue they have a ton of info in her file that lets them verify it is not her. Believe me, they can keep a lot of computerized data linked to your passport, I really don't understand how you could say they don't!


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## jimmyjam

Bevdeforges said:


> . Switzerland and Germany are the only two countries so far who have reported that banks are dropping US customers.


This is completely false. I travel a lot around Europe and ask around in the different countries. On my most recent trip I was made aware of 3 banks in the Netherlands that refuse US citizens. Go on the website for Keytrade bank, Rabobank, and NIBC direct banks. Try to open an account. They tell you right up front - no US citizens because the cannot deal with the US regulations! In Luxemburg it is virtually impossible for a US citizen to open an account. Other banks are still not yet aware of their FATCA obligations but believe me by the end of the year and in 2013 they will follow suit.



Bevdeforges said:


> The IRS has no way of knowing your foreign income - certainly not your salary income, which is subject to the FEIE anyhow.


Not sure why you keep talking about income.

Very little of the risk here is actually about taxes, it is mostly about FBAR, FATCA reporting penalties, and other penalties. Which by the way now extend to your full assets abroad including real estate and everything, not just your bank accounts.

Basically if you are a middle class person traveling internationally by air on a US passport it would be hard for anyone to believe that you never, ever had a 10,000$ balance pass through one of your bank accounts?



Bevdeforges said:


> US citizens abroad only really have to worry if they have accounts or investments they have previously been hiding from the tax authoritiesv


This comment insinuates that all of these people who do not live in the USA, who do not work there, and were unaware of FBAR and other reporting, were in fact intentionally "hiding assets" from the IRS. 

I resent this. You were obviously one of the lucky ones who knew about your reporting obligations from the beginning (how? was it random chance? did your parents warn you? did you work for a US company at first?)

When I first heard about my reporting obligations, NOBODY in my local country would believe me, my accountant, lawyer, tax preparer all said I was crazy I must be mistaken. Many people maybe take this at face value and don't investigate further.

You cited the new FBAR form, so you are aware of the absolutely life-destroying penalties (10,000 minimum, increasing every 90 days!!!??).

This is not about tax, it is about confiscation for reporting omissions.

Yes they did increase the level to 200,000 for those living abroad; but many middle class retirees surely have a 200,000 nest egg that will quickly get eaten up by all these penalties, even if no tax is due just because they didn't file a paper.



Bevdeforges said:


> Plenty of other governments require declaration of foreign bank accounts and investment accounts. I file a list of my US bank accounts and my US IRA and 401K every year along with my French tax return. They list obscene penalties for failure to report this information, too.


OF course they do, for the people who LIVE there, who KNOW they must file, who have ACCESS to LOCAL ACCOUNTANTS who can help them for a modest amount of money. You are living in France, you benefit from the infrastructure, you must file to France. Period. Nobody disputes that.

France does not require its citizens living in the USA to file anything to France including their US bank accounts or to pay any French taxes on whatever they earn.


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