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Question

I moved to Canada in 2001 from the US (US citizen and Canadian permanent resident) and although I filed US tax returns for the first few years of living in Canada (foreign earned income exclusion and 1040 ez) I stopped filing in 2003. I know recognize that I should have been filing US tax returns all along and I need to get caught up before the US finds 0ut that I need to file.

I’m not planning on renouncing my US citizenship as I travel to the US frequently to visit family and travel.

What are my options for catching up on my US tax returns?

Regards

XXXXXX

Answer

Hi XXXXXX

Now is still a great time to catch up on late US tax returns. The IRS is allowing delinquent US tax filers to file past due returns under the new Streamlined tax filing program, assuming you can meet the program’s specific eligibility requirements.

Generally speaking you’ll be eligible for the streamlined tax filing program if you meet the 3 following tests:

  1. You will not owe more than $1,500 in US taxes in any particular year
  2. You have not filed a tax return since 2009, or lived in the US since 2009
  3. You are not adjusting previously filed US returns

Other “high risk” factors may also preclude you from the streamlined tax filing program, however this may simply mean that the returns may be reviewed more heavily than qualified streamlined tax filing packages.

Assuming you quality for the program, you’ll be required to filed the following returns:

  • Last 3 year of US tax returns, e.g. 2010, 2011 and 2012
  • All related compliance forms and schedules related to these filings, for example, form 8891 (RRSP), form 8938 (foreign financial account reporting), form 5471 (foreign private company ownership), etc.
  • 6 years of FBAR forms (TDF 90-22.1), foreign bank account reporting forms. You’ll be required to file from 2007 to 2012.
  • The streamlined tax filing questionnaire
  • RRSP disclosure forms

Note however that this program will most likely not be around forever and considering the new FATCA rules that will be implemented mid 2014 it’s advisable that you take advantage of this program as soon as possible before it’s gone forever. Other programs like the 2010 and 2012 OVDI program are definitely not as reasonable to administer and file on behalf of US tax payers.

Hope that helps and please don’t hesitate to give me a call at 250-381-2400 if you want to discuss your filing requirements further.

Regards

Phil

Phil Hogan

Phil Hogan is a Canadian and US CPA working with clients throughout Canada and the US. Phil advises on cross border tax and financial planning matters. Phil can be reached at phil@hutcheson.ca or via telephone at 250-661-9417. You can also read more about Phil at Hutcheson.ca/phil.
Phil Hogan

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The information contained in this article is for general use only and should not be viewed as professional advice. Accounting and tax rules and regulations regularly change and individuals should contact a competent professional to obtain accounting and tax advice based on their specific situation.

Phil Hogan

Phil Hogan is a Canadian and US CPA working with clients throughout Canada and the US. Phil advises on cross border tax and financial planning matters. Phil can be reached at phil@hutcheson.ca or via telephone at 250-661-9417. You can also read more about Phil at Hutcheson.ca/phil.
Phil Hogan

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