This is my letter to the IRS explaining why my 2009 tax return is late. I felt I owed an explanation, since they sent me a little while ago a letter demanding that I file my overdue return and send a questionnaire with my return. The questionnaire did not cover the bases. So I will send the following letter with it. What I want to see is if they will honour their agreement with Jim Flaherty, not to charge late charges.
Please note that as a result of the recent crackdown on American citizens living abroad, I have been taking into advisement how best to proceed with settling with your service. As a result of extreme fear that kept me up late at night and sometimes in trembling, I have delayed filing this return.
I took some courage in FS-2011-13 December 2011 which stated (emphasis mine),
As discussed in more detail below, taxpayers who owe no U.S. tax (e.g., due to the application of the foreign earned income exclusion or foreign tax credits) will owe no failure to file or failure to pay penalties.
I have been year after year in tax compliance. I’ve never owed a thing. I still owe nothing, largely owing to business losses, and secondly, to the higher rate of taxes in Canada.
Last year, on February 28, 2011, I relinquished my United States citizenship on the day I became a Canadian citizen. I informed the United States Consulate in Toronto at the earliest opportunity that I had relinquished my United States citizenship upon becoming a Canadian.
I wish that I did not have to do this but given the stress of each year satisfying the filing requirements of both the United States and Canada, I have felt the necessity to exit the door as soon as possible. Perhaps you have seen how in the past years I have filed each year, but that I never owed anything. But it was only in 2010, before filing this 2009 return, that I learned of how the slightest omission or mistake by an innocent person living abroad could result in exorbitant fines, it was more stress than I could handle. Therefore, I decided to relinquish my US citizenship and I will perhaps never return to the United States again. Not because I owe tax, but because I fear the IRS and what could happen to me as an American living abroad.
My siblings will have to bury my father.
Sincerely, Peter W. Dunn