IRS reaction time

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formerpatriot
Posts: 62
Joined: Mon Feb 23, 2015 4:13 pm
Location: Montreal

IRS reaction time

Post by formerpatriot »

My wife is a dual citizen (Canada-USA). We moved to Canada many years ago. She did not file a US tax return for some 20 years. In early 2015, she filed a whole bunch of past years tax returns, up to the year 2013, the "quiet disclosure approach". Quite simple really. One job. One salary. Form 2555. No taxes due. In April 2015, she filed her 1040 for 2014, same thing, one job, one salary, Form 2555, no taxes due. All these tax returns were send in paper format via good old fashioned postal mail. This past March, she filed her 1040 for 2015. Same thing, one job, one salary, Form 2555, no taxes due. It looks like the IRS did received the tax returns that she filed last year because this year we were able to find the appropriate number/code on the IRS web site so that she was able to file electronically for the first time (with TaxAct). She also filed a bunch of FBAR going back 6 or 7 years.

Question 1: Is it normal that the IRS does not send us a letter of acknowledgement, like Canada does and like Quebec does, to let us know that they have treated your tax returns and that everything is ok?

Question 2: How many years does the IRS have to get back to us if there is something they do not like in my wife's tax forms submitted in early 2014?

Thanks
FormerPatriot in Montreal
ND
Posts: 291
Joined: Thu Feb 21, 2013 5:28 pm

Post by ND »

1. Be aware: Taxpayers eligible to use streamlined procedures who have previously filed delinquent or amended returns must pay previous penalty assessments. Taxpayers eligible to use the streamlined procedures who have previously filed delinquent or amended returns in a attempt to address U.S. tax and information reporting obligations with respect to foreign financial assets (so-called "quiet disclosures" made outside of the Offshore Voluntary Disclosure Program (OVDP) or its predecessor programs) may still use the streamlined procedures by following the instructions set forth below. However, any penalty assessments previously made with respect to those filing will not be abated.
https://www.irs.gov/individuals/interna ... procedures

If we ignored the fact that she did quiet disclosure catch-up filings and instead addressed the same question for an up-to-date compliant taxpayer, note that:
Unlike CRA, IRS doesn't issue a notice of assessment after processing one's return if it doesn't have any issue with the filing. For instances when IRS identifies a problem, it then issues a notice that references the tax year in question.

As a general rule of thumb, if there was fraud or >25% underpayment of tax due SOL doesn't kick in. 3yrs from return due date is standard SOL. IRS maintains records for six years.
MGeorge
Posts: 313
Joined: Fri Jun 22, 2012 9:23 am
Location: Canada

Post by MGeorge »

Hello,

I went through this a several years ago.
The IRS doesn't send any kind of letter of acknowledgement. It's basically "no news is good news". I ended up calling them, and the lady on the phone confirmed that she had all of my returns in the system.

Cheers.
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MGeorge is neither an accounting nor taxation professional.
exPenn
Posts: 106
Joined: Tue Aug 20, 2013 3:06 pm
Location: GTA

Post by exPenn »

Went through very much the same process with my wife several years ago. If you want verification that all your filings are up to date, go to the IRS website and follow the links to "get a tax transcript". About 6 months after filing, we always applied for a Tax Account Transcript. This lists some of the basic information from your last tax return, proving that it was received by the IRS. It also lists any balance owing for taxes, interest, or penalties on your account. We always carried this when crossing to border, in case we had to prove that her US taxes were up to date and nothing was owed (but never had to use it).
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