Double trouble.. US citizens in Canada

oldgringo · Post by **oldgringo** » Fri Jun 24, 2011 3:15 pm

my wife and i are retired Canadians born in the USA ... we both moved to Canada with our parents when we were children myself 11 and my wife 13.. i became a Canadian 40 years ago and I'm not considered a dual citizen (as far as i know), My wife became a Canadian about 7 years ago and is a dual citizen,neither one of us has ever had a social security number. i recently read an article that said we should have been filing a US return... i was flabbergasted and have been all over the Internet to see what i have to do...i just found this web site and have found some answerer's..... but i would like to ask a couple of questions.
1. I became a Canadian in 1971 and at the time i thought i lost my US citizenship because there was no such thing as a dual citizen at the time... does anybody know if that is true and if it is true am i exempt from having to file a tax return?
2. regardless it looks like one or both of us has to file... i see we have to start with social security numbers...but what is the next step?... do we have to apply under the 2011 amnesty program with all it's penalties which scares me to death...or can we just have a tax preparer file for us the last 6 years and see what happens?
if i hadn't read the article in the paper i would be living in ignorant bliss until one day they caught up with us...i just can't imagine how many unwitting Americans in Canada and around the world are going to caught up in this mess!
i sure would appreciate any help on this...thanks Oldgringo

nelsona · Post by **nelsona** » Fri Jun 24, 2011 4:09 pm

1. Probably not a US citizen, since at that time naturalizing to another citizenship caused loss of US citizenship, but only if you were over 18. So, were you over 18 when you became a Cdn citizen? Your spouse definitely is.

2. You were not evading tax. All you need to do is file the last three year, if no tax was owing, 6 years is only if some tax was owing in the past three years.

Only your wife needs to file, she should request her SSN number.

oldgringo · Post by **oldgringo** » Fri Jun 24, 2011 4:40 pm

thank you ,thank you, thank you!

oldgringo · Post by **oldgringo** » Fri Jun 24, 2011 4:51 pm

sorry i was so elated by your answer i didn't reply that i was 23 at the time i became a Canadian.. thanks again for your help..we will start the process of getting my wife's US tax affairs in order.

nelsona · Post by **nelsona** » Fri Jun 24, 2011 4:59 pm

Note, that there may be times when you will need to join your spouse on her return (as a dependant, for example) or in the year you sell your principal residence if it has appreciated substantially, so you may need to get an ITIN when this occurs, and may need top report your income as well.

But, in general, USC's living in Canada with no US income, do not end up owing any money to IRS, even if they file married filing separate, with no info about spouse.

oldgringo · Post by **oldgringo** » Mon Jul 04, 2011 1:32 pm

we have booked time with a tax preparer in Canada who also is a U.S. citizen working in Canada... she suggested my wife file 5 years back income tax and then when we get a chance renounce my wife's U.S. citizenship. does anyone have any thoughts on this strategy... and is there any pertinent questions we should ask this tax preparer?

nelsona · Post by **nelsona** » Tue Jul 05, 2011 6:45 am

Yeah, ask her why she picked five years. The rule is 3 unless you owe tax, then it becomes six.

oldgringo · Post by **oldgringo** » Tue Jul 05, 2011 8:18 am

we only talked to her on the phone and she wanted 5 years because of the rules on renunciation of Citizenship i think?...we go to see her today and my thought was to just do the 3 back years and really try to investigate the renouncing ramifications.. then after 5 or 6 years of filing make a decision about doing it.. my wife has to get a social security number before we send in her returns so that is next on the list...also this year her U.S. passport expires and we really just want to get her a Canadian passport but i have read some U.S. citizens have problems travelling in and out of the states with foreign passports..i have been using a Canadian passport that says i was born in the states for at least 20 years with no problem...I'm leaning towards getting both and then try to travel just on the Canadian ...
this has been a very upsetting experience for the both of us...my instinct is to do nothing and let them catch us with the thousands of U.S. citizens that have never filed and no clue what is coming in 2013... but we would have trouble sleeping at night worrying about that day so we will do the right thing... thank you for your help

nelsona · Post by **nelsona** » Tue Jul 05, 2011 9:57 am

Oh, there is NO DOUBT that you should take care of this before getting caught.

She will owe no tax. the five years may have to do with renunciation.

I'm not a fan of renunciation, so I simply won't talk about it. Others will.

oldgringo · Post by **oldgringo** » Tue Jul 05, 2011 10:29 am

thanks again.. we are going to file the 3 years .

rlb · Post by **rlb** » Tue Jul 05, 2011 10:53 am

"i have been using a Canadian passport that says i was born in the states for at least 20 years with no problem...I'm leaning towards getting both and then try to travel just on the Canadian ..."

This sounds as though you are leaning toward getting US passport for [u]yourself[/u]. You can't do that if you are no longer a US citizen. (Perhaps however you meant your wife).

As far as your wife is concerned, my understanding is that a US citizen is required to enter the US on a [u]US passport only[/u]. There is no problem with her having both passports, and using the Canadian one for other foreign travel, but not the US.

Canada does not seem to apply the same restriction. My wife and I are dual citizens, have only US passports at the moment despite having relocated to Canada permanently a few months ago, and have had no trouble entering Canada on the US passports, since the US passports show Canadian birth. (We will get Canadian passports shortly, but will use only the US ones to enter the US.)

oldgringo · Post by **oldgringo** » Tue Jul 05, 2011 8:13 pm

yes i did mean a Canadian passport for my wife...thanks for the head up..

oldgringo · Post by **oldgringo** » Thu Jul 07, 2011 10:54 am

sorry to keep this thread going... we met with the tax preparer and she is going to do 6 years back taxes and if money is owed we would send in the 6 years .. if no tax was owing we would send in 3 years in a quiet disclosure...i was feeling pretty good about everything until i did a search on quiet disclosure on the Internet and found that a lot of lawyer type Internet sites said that the IRS did not like quiet disclosure they said if your quiet disclosure is picked out of the pile of returns for audit you could be in trouble...i don't know if they are just trying to scare people to drum up business or if filing the quiet disclosure could open up a world of hurt on us. i assume that most people that disclose that they have off shore accounts are U.S. citizens living in the U.S. that have moved money out of the U.S. and are not claiming it on their income taxes...i would like to think that we would be looked at by the IRS as a different category than the people who willfully evaded taxes...so i guess my question to nelsona or anybody with firsthand knowledge of people in our circumstances who did do a quiet disclosure... did it work out ok? and if not what could a lawyer do for us to help? like i said sorry to keep this thread going but this whole thing is very upsetting to us...we worked hard,saved our money for retirement, paid our taxes...did everything right to our knowledge and now this comes out of the blue to turn our world upside down...
again any constructive comments are much appreciated.

nelsona · Post by **nelsona** » Thu Jul 07, 2011 2:47 pm

"i don't know if they are just trying to scare people to drum up business"

Scare mongering at its finest.

Quiet disclosure works fine for Cdn residents.

oldgringo · Post by **oldgringo** » Thu Jul 07, 2011 3:35 pm

Thank you for the reply. Again you make us feel much better about this situation. Hopefully we will be able to put an end to this thread!