Disparity Between Statutes for Audits between US and Canada

[Canadian Newbie]

The statute of limitations for most returns is 3 years for audit and amending US returns. My 2014 US return will soon be out of time to be able to amend it. Does the US allow amendment past the three year period in cases where the Canadian statute of limitations is longer?
I was just curious what my remedy would be if a year from now my Canadian return is audited and adjusted and it affects my US filing. Should I extend the statute on my US return somehow?
Thanks in advance.

[nelsona]

First let’s clarify that there is a difference between how far back YOU can AMEND your return (3 yrs) and how far back IRS can audit and amend your return (6 yrs, if the discover a pattern of underreporting)


However, in the case of foreign tax redetermination, you can/must go back 10 years,which is the carryforward limit. See form 1116 and Pub 514 instructions for redetermination.

[Canadian Newbie]

Thanks for the info.
Most of our income is Canadian sourced such as interest income, wages earned in Canada and even my social security is re sourced to Canada.
So , there is not much going on with the Foreign tax credit on my canadian returns except for credit for the US tax on a US based state pension. However, I was concerned if there were adjustments 5 years from now I would be stuck but you have answered the question. I guess the IRS used 10 years so it would give taxpayers a break on most countries longer statutes.

Thanks again!

[nelsona]

Since the FTC you will be concerned with is on the US return, you will always be concerned about Cdn tax redetermination, as it will affect your Form 1116s. That will be what may cause changes to your US return

The 10 years is not because of longer omforeign amendment periods, it is because, as I said, IRS allows you to carry forward 10 yrs of unused credits. If they allow you to use tax credits that are 10 yrs old, they want it to be accurate.