Possible Claim to US Citizenship - Tax Implications

mixed85 · Post by **mixed85** » Tue Nov 08, 2011 4:01 pm

Hello,

I have recently discovered i have a claim to US citizenship through my American citizen parent. Once my application has been processed, will i be required to backfile any income taxes?? will i face any penalties?? i'm confused and don't know what to do. Thank you very much.

mixed85 · Post by **mixed85** » Tue Nov 08, 2011 4:13 pm

Keep in mind i had no idea i had a claim to US citizenship until recently. Would i still be required to backfile in this case? What is the best course of action for me at this point? thanks.

nelsona · Post by **nelsona** » Tue Nov 08, 2011 4:43 pm

Likely you are a US citizen, and are thus not having to go thru a process to become a US citizen. As such you have always been liable for reporting your income to the IRS.

The typical remedy to this -- recent increased awareness to the penalties for failure to report notwithstanding -- is to back-file 3 years worth of 1040s, 8891, FBAR, etc.

The result is almost always no extra tax owed to IRS unless one has significant US holdings.

mixed85 · Post by **mixed85** » Tue Nov 08, 2011 5:05 pm

I just recently applied for my US passport as proof of my US citizenship. Prior to this, i had formal US citizenship documents, again i did not realize i had a claim to US citizenship through my american citizen parent. I thought once i reached the age of 18 i would lose this claim. Am i still required to backfile, even when i'm offically recognized as a US citizenship now after doing the paperwork???

mixed85 · Post by **mixed85** » Tue Nov 08, 2011 5:06 pm

[quote="mixed85"]I just recently applied for my US passport as proof of my US citizenship. Prior to this, i had formal US citizenship documents, again i did not realize i had a claim to US citizenship through my american citizen parent. I thought once i reached the age of 18 i would lose this claim. Am i still required to backfile, even when i'm offically recognized as a US citizenship now after doing the paperwork???[/quote]

correction *i had NO formal US citizenship documents

nelsona · Post by **nelsona** » Tue Nov 08, 2011 5:11 pm

As I said, you were always a citizen.

3 years back.

tsanaha · Post by **tsanaha** » Tue Nov 08, 2011 9:36 pm

nelsona is right, because your US citizenship is by birth, it is not through your application to become US citizen. It has nothing to do with your US citizenship document.

I would like to explore a bit more here. Say if your parents are also citizen through their parents by birth. You may not be a US citizen at all (I mean if this kind citizenship by blood (through birth parents) may not be forever, Canada only allows this kind citizenship for the 1st generation of by birth.

tsanaha · Post by **tsanaha** » Tue Nov 08, 2011 9:54 pm

i think it should be better explain as from

http://en.wikipedia.org/wiki/United_Sta ... nality_law

Birth abroad to two United States citizens

A child is automatically granted citizenship in the following cases:
1.Both parents were U.S. citizens at the time of the child's birth
2.The parents are married
3.At least one parent lived in the United States prior to the child's birth.

Birth abroad to one United States citizen

A person born on or after November 14, 1986, is a U.S. citizen if all of the following are true (different rules apply if child was born out-of-wedlock):[7]
1.The person's parents were married at time of birth
2.One of the person's parents was a U.S. citizen when the person in question was born
3.The citizen parent lived at least five years in the United States before the child's birth
4.A minimum of two of these five years in the United States were after the citizen parent's 14th birthday.

mixed85 · Post by **mixed85** » Tue Nov 08, 2011 10:05 pm

So basically me applying for my proof of US citizenship (US Passport) for the first time has pulled me into this mess? Now i'm required to file taxes for the past 3 years? and hope i don't face any penalties/criminal prosecution.. when i was totally unaware i was a US citizen in the first place?? this is really not fair at all..

tsanaha · Post by **tsanaha** » Tue Nov 08, 2011 10:17 pm

Here is the logic,

You are US citizen, but you have to prove it. I guess your parent has never registered you through US conssolate at your birth. That is why you need to prove it now.

So, you need to prove it first, then you back file your tax. No fault at all, if you never prove it --- IRS has to prove it for you before they can impose any tax or penalty on you.

nelsona · Post by **nelsona** » Tue Nov 08, 2011 10:37 pm

Frankly, whether you get a passport or not, you need to fulfill your obligations as a US citizen, which includes filing IRS taxes.

So, I don't see why getting a passport is somehow bad.

tsanaha · Post by **tsanaha** » Tue Nov 08, 2011 10:48 pm

usually parents should register oversea new born through US embassy, that process will make it easy for citizen and gov to prove this fact of citizenship.

i guess he does need to prove it (even if he is indeed a citizen but fail to prove the fact may still be possible).

of course, IRS would have no problem to collect tax or forms anyway regardless the person in question is able to prove he is a citizen or not.

nelsona · Post by **nelsona** » Tue Nov 08, 2011 10:53 pm

Registration is not a requirement (otherwise our poster would have to do a two-step porcess to get passport -- which some Brit citizens must do). Nor is even getting a passport.

So best is to file. No taxes or penalties will be due -- bescause no false return was previously submitted.

tsanaha · Post by **tsanaha** » Tue Nov 08, 2011 11:10 pm

Does he need SSN or some kind tax number before he files ? If so, how could he get one without proof that he is indeed a US citizen ?

nelsona · Post by **nelsona** » Wed Nov 09, 2011 6:42 am

That is a good point. Hpwever once he gets SSN, he must still file for past three years.

Not getting an SSN does not absolve filing requirement, otherwise there would be a large "no SSN" movement in the US alredy.