US citizen in Canda with Canadian Corporation needs to

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Hi David,
I came across your site and realized that I need to file US Tax returns. I am a US citizen and landed immigrant in Canada since Feb 15th 1993. I have resided in Vancouver for over 355 days per year.
>From what I read, I should be exempt on paying anything, since I have never earned more than 50,000 CAD per year working in the travel industry. I also don't have more than 4,000 CAD in RRSP and don't own a home or have rental properties.

I do however own more than 5% shares in my own XXXXXXXX XXXXXXXXX company that is a Canadian Corporation. But it has never had sales of over 25,000 and has always lost money.
Any idea if you could help me get caught up with my returns and what sort of fees would be involved?
DXXXX
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david ingram replies:
"Catch ups" are our specialty.  However, you are going to wish that you did not have the company.  You say more than 5% but call it your own company.  Does that mean that it is 100% yours and you are just referring to the fact that a US citizen with 5% or more of a Canadian (or any other foreign country) Company has to do special reporting of form 5471 OR are you lucky in this case and own 50% or less.
The reason is that if you are 50% or less, you only have to report it once and then any year your shareholdings change.  If your holdings are more than 50%, your requirement is to fill in form 5471 EVERY year and that is a $1,100+ per year by itself.  More if you have a year end that is anything but Dec 31st.
Your basic returns are another matter.  The IRS requests that you go back six years which would mean that at this point we would be catching up 1997 to 2002.  These would usually run from $150 to $300 a year depending upon the type of income you have.  If you were also self-employed and had a P & L statement and / or had a hundred stock trades, it would be more.
The company is your biggest problem.  The penalty for not filing the 5471 (if invoked by the IRS) is $10,000 for the first 90 days and $10,000 for each 30 days thereafter - There is a maximum of $250,000 though so there are limits. AND, it is a parking meter fine.  If you have the company and haven't reported it, you are automatically subject to penalty.  The IRS appointed a special commissioner yesterday  for International Tax Matters.  The appointment notice just arrived on my computer.
IR-2003-137, Dec. 11, 2003
IRS NAMES DIRECTOR FOR INTERNATIONAL TAX MATTERS AND U.S. COMPETENT
AUTHORITY
WASHINGTON: The Internal Revenue Service announced the selection of
Robert H. Green to lead the agency's efforts on international tax issues.
Green will serve as Director, International, and as the U.S. Competent
Authority. In this position, Green will be responsible for a wide range of
issues relating to international tax matters and global trading. These
include ensuring consistent tax treatment of U.S. taxpayers concerning
international issues, providing timely and effective implementation of tax
treaty and tax information exchange. Green will report to the
Commissioner, Large and Mid-Size Business Division.
After seeing what you have, I will likely advise you to drop the corporation.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 
[email protected]
www.centa.com www.david-ingram.com
Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa,  Thailand, Indonesia, Egypt, Antarctica,  Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
  Alaska,  Alabama,  Arkansas,  Arizona,  California,  Colorado, Connecticut,  Delaware, District of Columbia,  Florida,  Georgia,  Hawaii,  Idaho,  Illinois,  Indiana,  Iowa,  Kansas,  Kentucky,  Louisiana,  Maine,  Maryland,  Massachusetts, Michigan, Minnesota,  Mississippi,  Missouri,  Montana,  Nebraska,  Nevada, New Hampshire,  New Jersey, New Mexico,New York, North Carolina,  North Dakota,  Ohio,  Oklahoma,  Oregon. Pennsylvania,  Rhode Island,  South Carolina,  South Dakota, Tennessee,  Texas,  Utah, Vermont,  Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories,  Mount Vernon, Eumenclaw, Coos Bay and Dallas  Taxman and Tax Guru Your name has been added to our email list because of an enquiry we have received,  we may not answer your question but 
another similar question will be as we lump them.
You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY  Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
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