# Can I still file a feie?



## christine.schmalz27 (Jan 19, 2020)

I have lived in canada as a permanent resident since 2009. I really only started earning real income in september 2013 before that time I had small jobs and had 2 kids. I tried to file a tax return years ago not really fully understanding what I was doing.

I remember I did file with a feie at one time maybe in 2014. Being so confused and overwhelmed, I wasnt able to file on time the next year. I remember trying to file for an extension but it came back declined so I must have filed the wrong form. I havn't filed again since. In this case can i still file an feie now?

I'm just realizing now what a huge issue this is and its really stressful. I am not sure where to begin. I have just tried to fill up the 1040 and 2555 on my own for 2020 but I have no idea if I should just file one year or try to figure out the streamline process on my own? I make less than the exclusion amount and I don't own a home or have a large bank account. Just my paycheck each 2 weeks.

Any advice would be appreciated


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## Nononymous (Jul 12, 2011)

It's not a huge issue insofar as the IRS hasn't taken any notice of your past failures to file, nor are they ever likely to, nor would you owe any money if they did. So relax. If you wish to continue ignoring US tax obligations it's probably not going to cause you any grief. However, until such time as you acquire Canadian citizenship you are more vulnerable to the very small chance of something going wrong. If you have strong US financial ties or expect an inheritance with real property in the US then it might also be worth cleaning things up sooner rather than later. But no great rush (with one caveat, below) so take your time, do your research, and if you can't figure it out yourself, pay someone to do it for you.

One thing to note is that you probably cannot now use the streamlined program to get caught up, given that you filed in 2014. Streamlined (under which you file 3 years' tax returns and 6 years' FBARs to clear up all past obligations) is only available to those who were unaware of their US tax obligations. You were obviously aware, but you only managed to file once. So the best course of action if you wish to become compliant, given that you'd owe no US tax anyway, is to use the delinquent FBAR program to get caught up on those, then simply begin filing tax returns going forward.

If you file a 2020 return in a timely fashion you may still be eligible for up to $3200 in stimulus benefits. I'm not sure of the deadlines though. Also you mentioned children. They will be US citizens. If you've registered their births and have an SSN, you should be able to collect additional stimulus money for them - quite a lot, in fact - plus going forward you may have the opportunity to collect a refundable tax credit each year. Not sure of all the details on that but be aware that you need to file using the FTC (foreign tax credit) method rather than the FEIE; worth considering as it's now up to $1400 per child each year. You may wish to backfile to collect those tax credits for as many years is allowed. If that all makes your head spin, hire someone to do your US taxes for you.

You didn't mention savings or investments. Check the FBAR rules, which include joint accounts - your Canadian spouse may not be thrilled about that. Are any banks aware of your US status? If so, they might be reporting accounts under FATCA. If you do have investments, be aware that TFSAs are not recognized by the IRS, and any Canadian mutual funds outside of RRSPs would have nasty PFIC reporting requirements. Finally, if you've set up any RESPs for the kids, keep your name off them entirely. Apparently the IRS is now treating those more favourably than in the past, but if you can do it in the name of the Canadian spouse only, life is much simpler.


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## christine.schmalz27 (Jan 19, 2020)

Thank you so much for the information. I do have a checking account Ive had for years. But I dont keep any saving and i pay most of my earnings to bills and as far as I know the bank does not know know I am American. I have not been asked. My husband has his own account and he is Canadian. We do not have a joint account. I am filing for Canadian citizenship but it will take a year to process. I will research the delinquent fbar program. I have never thought about claiming my children in the states since we live only in canada. I really appreciate the information. Thank you


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## Nononymous (Jul 12, 2011)

Where your children born in the US or Canada? Do they have US passports? If not, have you experienced any difficulties entering the US with their having only Canadian passports?

If the children were born in Canada there's a good argument to be made for keeping them fully off the US radar by never registering their births. On the other hand, having a US passport can be extremely helpful later in life if they wish to go study or work south of the border. They aren't really signing up for a lifetime of US tax servitude because they will be dual citizens and easily able to ignore the IRS and FATCA.

You can make a decent sum of money by claiming the tax credit ($1400 per year, each) which you could then park in an RESP to fund post-secondary education. For this you would need to register the birth and obtain an SSN for each child. The stimulus benefit was also quite generous, with two kids you were able to claim $8200 over the three installments ($2200 + $1800 + $4200). No idea how much of that you'd be able to get now, as some deadlines may have passed, and if the children don't already have SSNs it will definitely not be a fast process to obtain them, given that the consulates have been shut pretty tight during the pandemic and there are massive delays with everything from passport renewals to renunciations.

PS You are only required to file FBARs for years in which you had more than US$10,000 total in your Canadian accounts, at any point during that year.


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## Moulard (Feb 3, 2017)

Simply having filed in the past does not make you ineligible as Nononymous suggests...

As to eligibility for streamline, here is the wording of second eligibility requirement..



> (2) have failed to report the income from a foreign financial asset and pay tax as required by U.S. law, and may have failed to file an FBAR (FinCEN Form 114, previously Form TD F 90-22.1) with respect to a foreign financial account, and such failures resulted from non-willful conduct. Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.


As you can see simple non-willful negligence is sufficient.






__





U.S. Taxpayers Residing Outside the United States | Internal Revenue Service


Streamlined Foreign Offshore Procedures




www.irs.gov


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## Nononymous (Jul 12, 2011)

Fair enough, though who wants to get into an argument with the IRS about what "non-willful negligence" really means. Still might not be much point doing the whole streamlined business if it's relatively low income with nothing being owed.


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## christine.schmalz27 (Jan 19, 2020)

Nononymous said:


> Where your children born in the US or Canada? Do they have US passports? If not, have you experienced any difficulties entering the US with their having only Canadian passports?
> 
> If the children were born in Canada there's a good argument to be made for keeping them fully off the US radar by never registering their births. On the other hand, having a US passport can be extremely helpful later in life if they wish to go study or work south of the border. They aren't really signing up for a lifetime of US tax servitude because they will be dual citizens and easily able to ignore the IRS and FATCA.
> 
> ...


My daughter was born in the USA and did receive a SSN althought I don't know what it is I would have to dig it up. She is almost 13 now. My son was born in Canada and I never registered him for anything. Both my Children have Canadian Passports now but my daughter might have had a USA password when she was younger. I can't remember now.

So if I was not obligated to file the FBARS in the first place should I just start filing as normal and not worry about the years that I missed unless I want to collect those child benefits?


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## Nononymous (Jul 12, 2011)

First step would be to do some research on the basics. FBAR is a report of foreign (i.e. non-US accounts). It has nothing to do with taxes, but you are required to file them if the total of your foreign assets exceeds US$10k at any point during a given year. This includes joint accounts. FBAR has nothing to do with taxes per se.

If you filed a 2020 tax return you might still be able to collect some stimulus benefit money for yourself and your first child; I doubt that you could get the second child registered in time. As for child tax credits (something quite different than the stimulus benefit) I'm not sure how many years you can file back to collect those. More research required. Note that you need to use the FTC rather than the FEIE for the child tax credit, and each child requires an SSN.

Alternatively, if you don't want the money, keep your kids off the US radar. Your son, born in Canada, will never need to worry about this. The US government does not know that he exists, and he can keep it that way. As long as he never discloses his US citizenship to any financial institutions, he need never worry about FATCA. He can simply enter the US with a Canadian passport, as a Canadian. If he ever wanted to move to the US, however, he could claim his US citizenship; this is easier to do before he turns 18. Your daughter however has a US birthplace. It will be very easy for her to live her life in Canada without disclosing this - use a drivers license rather than a passport when opening bank accounts - and having to deal with FATCA or any hypothetical US tax burdens. It would be different living in other countries where FATCA is taken more seriously, and you can't easily hide your place of birth from banks. Travel could also be an issue. If she enters the US with a Canadian passport, sooner or later an alert border official is going to notice her place of birth and tell her to use a US passport (this is the law, though rarely enforced). Have you never had issues crossing the border as a family, one parent with a US passport and children born in each country?


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## Moulard (Feb 3, 2017)

christine.schmalz27 said:


> My daughter was born in the USA and did receive a SSN althought I don't know what it is I would have to dig it up. She is almost 13 now.


If you cannot dig it up, I believe that you can apply for a replacement card for her.



https://www.ssa.gov/forms/ss-5.pdf





Nononymous said:


> ... he could claim his US citizenship; this is easier to do before he turns 18.


Often the hardest part for an adult child can be obtaining the evidence necessary to prove that their parent or parents met the requirements for acquisition of citizenship at birth. 

Assuming you are the birth mother of your son, then Section B(4) or C(2) of the following would apply..









Chapter 3 - U.S. Citizens at Birth (INA 301 and 309)


A. General Requirements for Acquisition of Citizenship at Birth A person born in the United States who is subject to the jurisdiction of the United States is a



www.uscis.gov





So what you can do to make it easier for them, in the event that he wishes to apply for a certificate of citizenship at some point over the age of 18 is to gather the necessary documentation to prove you are eligible to pass down citizenship and make sure that they are aware that you have it.


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## christine.schmalz27 (Jan 19, 2020)

Nononymous said:


> First step would be to do some research on the basics. FBAR is a report of foreign (i.e. non-US accounts). It has nothing to do with taxes, but you are required to file them if the total of your foreign assets exceeds US$10k at any point during a given year. This includes joint accounts. FBAR has nothing to do with taxes per se.
> 
> If you filed a 2020 tax return you might still be able to collect some stimulus benefit money for yourself and your first child; I doubt that you could get the second child registered in time. As for child tax credits (something quite different than the stimulus benefit) I'm not sure how many years you can file back to collect those. More research required. Note that you need to use the FTC rather than the FEIE for the child tax credit, and each child requires an SSN.
> 
> Alternatively, if you don't want the money, keep your kids off the US radar. Your son, born in Canada, will never need to worry about this. The US government does not know that he exists, and he can keep it that way. As long as he never discloses his US citizenship to any financial institutions, he need never worry about FATCA. He can simply enter the US with a Canadian passport, as a Canadian. If he ever wanted to move to the US, however, he could claim his US citizenship; this is easier to do before he turns 18. Your daughter however has a US birthplace. It will be very easy for her to live her life in Canada without disclosing this - use a drivers license rather than a passport when opening bank accounts - and having to deal with FATCA or any hypothetical US tax burdens. It would be different living in other countries where FATCA is taken more seriously, and you can't easily hide your place of birth from banks. Travel could also be an issue. If she enters the US with a Canadian passport, sooner or later an alert border official is going to notice her place of birth and tell her to use a US passport (this is the law, though rarely enforced). Have you never had issues crossing the border as a family, one parent with a US passport and children born in each country?


We have not had issues crossing the border with her having a canadian passport, maybe because I am always with her and I have an American passport. I did not know it was a law that she had to have an American passport to enter the USA as a visitor from Canada if she was born in the USA. Does that means he needs to keep 2 passports valid for her entire life even if she has not intention of living in the USA?


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## christine.schmalz27 (Jan 19, 2020)

Moulard said:


> If you cannot dig it up, I believe that you can apply for a replacement card for her.
> 
> 
> 
> ...


Thank you for the information. It makes me kind of sick to think that my children will have to carry this burden when they have lived their entire lives in Canada. I for that reason don't think I am ready to claim them on any tax forms even if they are giving credits. Not that it changes anything if they are American no matter what. I think I just need more time to consider.


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## Nononymous (Jul 12, 2011)

christine.schmalz27 said:


> We have not had issues crossing the border with her having a canadian passport, maybe because I am always with her and I have an American passport. I did not know it was a law that she had to have an American passport to enter the USA as a visitor from Canada if she was born in the USA. Does that means he needs to keep 2 passports valid for her entire life even if she has not intention of living in the USA?


According to US law, all US citizens must use a US passport to enter the US. Fortunately this law isn't enforced very strictly, particularly when entering from Canada, for which an ESTA waiver is not required. However, it's not unheard of for US border officials to stop anyone using a Canadian passport showing a US birthplace, and remind them (politely or not) to obtain a US passport (they cannot be denied entry if they are believe to be US citizens, so it's generally just a warning). It's also not unheard of for family groups with an American parent to be asked questions about the citizenship of their children, regardless of where they were born - in theory they could request that you obtain US passports for both children.


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## Nononymous (Jul 12, 2011)

christine.schmalz27 said:


> Thank you for the information. It makes me kind of sick to think that my children will have to carry this burden when they have lived their entire lives in Canada. I for that reason don't think I am ready to claim them on any tax forms even if they are giving credits. Not that it changes anything if they are American no matter what. I think I just need more time to consider.


It's not much of a burden for you son, born in Canada (with the possible exception of family travel). Your daughter would be fine in Canada despite her US birthplace, provided she's clever enough to only use her drivers license as identification when she opens bank or investment accounts. (Different story if she went to go live in Europe or Asia.) Both children will need to lie about their US citizenship if they want to avoid FATCA reporting - this may or may not be a problem for them, depending on their respective consciences.


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