Help with money owing issue US / living in Canada

beans · Post by **beans** » Mon May 12, 2008 10:43 pm

Hey there,

I got a letter stating that I owe a large amount of money to the IRS from late filing and under paid taxes.

I filed my US 2006 taxes late (in March 2008)
I am living in Canada, Have been here for 3.5 years without leaving, I make under $80,000 and the US is still taxing me. They say I do no qualify for the "2555 foreign earned income form" How can I fight this and get my money back? I understand the interest/penalty but not the owing taxes part.

Any advice?

nelsona · Post by **nelsona** » Tue May 13, 2008 6:35 am

You need to find out why you were not eligible for 2555. filing late does not prevent using 2555.

Even if this is the case, you shold still be able to file using 1116, and pay little tax.

beans · Post by **beans** » Tue May 13, 2008 8:22 am

yes i do no understand why I wasnt allowed to use the for.

So now I need to send proof that I live here. Not sure what to send other then record of employment and my landing papers... Can I still send the 1116 in late with my letter saying that i do qualify,, I hope something can be done arg.

I was not eligible because it said I did not meet my tax home (I do) and either did not meet physical presence test or bona fide residence and again I do.....

damn thieves.

nelsona · Post by **nelsona** » Tue May 13, 2008 8:27 am

Easy on the rhetoric.

It should be easy to prove your 255 eligibility. Unles you spen d lots of time in US (or are paid buy a US firm) this is rarelt even an issue.

Since I'm sure you did your 2006 return both ways (using 2555 or using 1116 alone) and determines that 2555 was better, I would be sticking with this method.

But, if you now think 1116 is betterm, you are quite free to choose this method.

It is rare for anyone to owe IRS money while living and working in Canada, so, once you prove this, you will owe neither tax nor penalty, even if you file late.