My_question_is: Applicable to both US and Canada
Subject: US Citizen in Canada Wanting to Get Up to Date with the IRS
Expert: taxman at centa.com
Date: Monday January 08, 2007
Time: 09:40 PM -0500
QUESTION:
I am a U.S. citizen that became a landed immigrant to Canada in 1986. I
later became a Canadian citizen in 2000 and have resided in Canada
continuously since becoming landed. In 1989 I filed U.S. tax returns for
1985,1986,1987, and 1988 and was assessed a modest amount of back tax and
penalties for 1985, my last year of U.S. residence. For the following 3
years I paid no tax at all because my income of between $25,000 and $35,000
Canadian was well below the $80,000 U.S. exclusion for non-resident U.S.
citizens. I have not filed a return since and have not earned over $40,000
Canadian in any year. Simple procrastination in the first couple of years
has now become paranoid dread as well as financial amnesia. But now as I
approach retirement age I am increasingly wanting to find some peace of mind
as well as the potential of collecting my U.S. social security benefits
earned between age 17 and 42. If I apply soon I will of course bring myself
to the attention of the IRS bureaucracy. They apparently lost track of me
completely back in 1989, sending no notices or return forms to me for the
following years even though my address didn't change for several years.
There has no been no communication to my knowledge in either direction these
past 17 or so years. What are my options to "come in from the cold" with the
IRS besides blowing off my U.S. citizenship as well as my social security?
-------------------------------
david ingram replies:
Catch up by filing the current year "2006" plus six back years which would
be 2005, 2004, 2003. 2002, 2001 and 2000.
If you were to give up your citizenship, they would want all returns back to
89 plus 10 more years down the road. You would, however, get your US Social
Security. However, because you gave up your citizenship to avoid US tax, you
would also be banned from the US for life.
If you would like them done, send us your 2000 to 2006 Canadian returns and
a copy of your 88 US if you have it.
GOTO www.centa.com and read the US/Canada Taxation section in the second box
down on the right hand side. Then read the October 1995 newsletter in the
top left hand box.
I am enclosing a price list if you wanted us to look after it. There is
obviously a discount if we do several years at the same time but that
discount would disappear if we were doing them from about Feb 15th to the
end of August.
------------------------------
Phone consultations are $400 for 15 minutes to 50 minutes (professional
hour). Please note that GST is added if product remains in Canada or a phone
consultation is in Canada.
This is not intended to be definitive but in general I am quoting $800 to
$2,400 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you
lived in one country only - no self employment or rentals or capital gains -
you did not move into or out of the country in this year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,200 would be the minimum with a move in or out of the country. These are
complicated because of the back and forth foreign tax credits. - The IRS
says a foreign tax credit takes 1 hour and 53 minutes.
$1,500 would be the minimum with a rental or two in the country you do not
live in or a rental and a business and foreign tax credits no move in or
out
$2,400 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection
period) with two or three slips and no capital gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing
period) with about the same things in the same range with a little bit more
if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS
be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part
of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales) are likely $50.00 for the first and $20.00 each after
that.
Just a guideline not etched in stone.
--------------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://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 and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance, preparation, or
consultation in connection with personal or business affairs such as at
www.centa.com <http://www.centa.com> . If you forward this message, this
disclaimer must be included."
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