Dual citizen living in Canada never filed US return (school, income)

[dpkelly]

Hey everyone,

I've been living in Canada since I was 13yrs old (1980) and never worked for an American company hence I have no social security number. I've been working for Canadian companies since 1986. I obtained my US passport in 2001. I recall seeing a pamphlet at the US consulate about not worrying about paying US taxes as long as I made below a certain amount. I believe it's around $85,000. It mentioned that the IRS might contact me and they never did.

I've always made less than $85,000 until this year thanks to the exchange rate. I plan to work for an American company but stay in Canada.

Should I have filed all those years ago? What are the penalties for not filing eventhough I most likely don't owe any taxes to Uncle Sam?

Where can I go for some advice?

[Cornerguy1]

I didn't think you could get a US passport without having a SSN.


Regardless, the best place to get answers is straight from the horse's mouth.

You can call the Internal Revenue Service's International section at the Philadelphia office at:

215-516-2000

or

contact them by mail at:

Internal Revenue Service
P.O. Box 920
Bensalem, PA, 19020

If you choose to deal with them over the telephone, be sure to ask for and record the name and ID number of the person you deal with.

Good luck.

[Stockholmaren]

You don't need a SSN to get a US passport - birth certificate will do :-)

[Ocuri]

It all doesn't matter since there's no law in the U.S. that obliges you to pay income tax

[Jadel812]

Originally Posted by Ocuri

It all doesn't matter since there's no law in the U.S. that obliges you to pay income tax

Yeah but if you don't pay it they throw your butt in jail.

[Cart24]

There is a 3 year statute of limitations for the IRS to auditing a tax return and a 10-year statute of limitations for them to collecting tax.

My recommendation is to contact an accountant in your local area that specializes in US tax returns (which is really easy to find, HR Block usually has at least a couple employed) and ask them to file taxes for the past 3 years. If you made under $85,000 a year you will not have to pay any back taxes, just the fee to have the accountant prepare and file the return on your behalf.

My wife and I had to do the same thing when I was sponsoring her so that we could move to the US once I finished school in Toronto. The INS needed to see my US tax returns for the past 3 years so I had to file all 3 years at the same time to complete our application.

[nativeDallasite]

When I lived abroad I filed my 2002 return in 2005. Nobody cared...I always made less than the foreign earned income deduction (which is around $85k THIS year but is adjusted every tax year). Filing the 1040/2555-EZ forms is ridiculously easy too.

[CROSSBORDER TAX/LEGAL PRO]

You should file - even if claiming what you've described AKA the "foreign earned income exclusion".

In addition, by not opting to use that exclusion, taxpayers are sometimes entitled to refunds.

As pointed out, you can back-file for past years. Some clients back-file and get a $15,000 refund as a result.

As for not filing at all - not a good idea - definitely a risk in numerous ways and could come back to haunt you and also become more costly than not filing on your own.

If you don't owe, you shouldn't have (federal) penalties.