Forum - Tax Treaty, ITIN and Other Resources TAX TREATY, ITIN AND OTHER RESOURCES

By Alex Oware on 06/24/2015 10:00 PM

QUESTION: I was born a US Citizen with a valid SS # and left to Canada when I was a teenager, met and married a Canadian, but never gave up my US Citizenship. I have worked all my life in Canada and have never filed a US Income Tax Return. I don’t want to give up my US citizenship, what is the way forward as far as US taxes are concerned?

ANSWER: In September 2012 (modified in 2014), the IRS announced a new “streamlining” program for overseas non-filers. If you meet the requirements, you can file just three years of missing returns, along with six years of missing FBAR forms, and the IRS will not pursue any earlier missing returns. You can read the details of this program here. If the IRS has already requested missing returns, then you’ll need to go back as far as they ask.

Note that if you had significant tax due for years that you didn’t file, and if the IRS catches up with you before you take the initiative to file, they can deny you the option to take the foreign earned income exclusion. This may result in a much higher tax bill than if you had gone ahead and filed on your own initiative. If you have unpaid taxes lurking in your past, get caught up before the IRS notices and the problem gets worse!

References/Related Topics

Foreign Income Exclusion, Earned Income Credit and SE Tax

***Disclaimer: I am a tax accountant and a CPA , but I am not your accountant or advocate (Unless you have signed up to my services). This communication is not intended as tax advice, and no tax accountant -client relationship results**