Americans are taxed based on their citizenship; regardless of how long they have lived outside of the US or whether they owned US assets on death. If the deceased was a US citizen living in Canada, who never renounced their US citizenship, technically, they should have been filing tax returns and information returns with the US Internal Revenue Service (IRS) each year.

If the deceased had been filing Canadian returns and paying Canadian taxes every year, the amount of tax they owe to the IRS on the unfiled US returns may be minimal because of the Canada/US tax treaty.

On the death of a US citizen living in Canada who has not been filing US tax returns, the IRS will usually request tax and information returns be filed for the past 6 years (or more). Depending on the circumstances and assets of the deceased, there may be US estate tax owing. The IRS also reserves the right to assess significant penalties if tax returns or information returns have not been filed.

If the deceased was a US citizen, the advice of an accountant well versed in US tax matters is essential.


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