Taxation issues due to long absences

[ponyo_rocks]

My husband and I spent nearly 2 years out of the country (with re-entry permits for both of us & trips back to the US) from mid 2012-2014. We'll be applying for naturalization 4 yrs and 9 months since we established continuous residence (we're at 4 years now). But since I am an expert worrier I want to get our tax matters sorted, if any.

We filed federal taxes while we were away (Form 1040 and declared foreign income and paid taxes to IRS) but did not file state taxes since we had 0 California income, which was our state of residence prior to time spent abroad (deduced using tax software). Now this will make our answer on Part 12. 7. A on N400 "Yes". "Have you ever not filed a federal, state or local tax return...".

How much of an issue is this? If it is a big one, I'd like to consult a tax specialist and/or immigration lawyer and file back taxes. Do I talk to an international tax lawyer or a tax preparer like H&R block or just a regular tax accountant? Are immigration lawyers well versed in these matters? The one attorney I spoke to sort of waved it off as inconsequential, so I am uncertain in that regard. I am simply not sure in what order I should to talk to immigration/tax specialists to ensure I dont waste money on random consultations.

Or is this all unnecessary? Thanks for your time.

[suziq38]

People have asked me this question. My answer is that I do not know, as I am only a citizenship teacher, not a lawyer.
I would take your own suggestion and go to an HR Block and see if someone there knows the answer. Maybe there is a really short form and you can file it yourself, or with minimal help. Maybe you can check with the IRS website for the form to print out.
Let us know what happens. All I know is that the USCIS officer may ask you if you filed and paid your taxes every year. This way, you can tell h/her "Yes."

[YRC]

My husband and I spent nearly 2 years out of the country (with re-entry permits for both of us & trips back to the US) from mid 2012-2014. We'll be applying for naturalization 4 yrs and 9 months since we established continuous residence (we're at 4 years now). But since I am an expert worrier I want to get our tax matters sorted, if any.

We filed federal taxes while we were away (Form 1040 and declared foreign income and paid taxes to IRS) but did not file state taxes since we had 0 California income, which was our state of residence prior to time spent abroad (deduced using tax software). Now this will make our answer on Part 12. 7. A on N400 "Yes". "Have you ever not filed a federal, state or local tax return...".

How much of an issue is this? If it is a big one, I'd like to consult a tax specialist and/or immigration lawyer and file back taxes. Do I talk to an international tax lawyer or a tax preparer like H&R block or just a regular tax accountant? Are immigration lawyers well versed in these matters? The one attorney I spoke to sort of waved it off as inconsequential, so I am uncertain in that regard. I am simply not sure in what order I should to talk to immigration/tax specialists to ensure I dont waste money on random consultations.

Or is this all unnecessary? Thanks for your time.

Since you are an ?expert worrier,? you might consider two or three options. One, speak to an immigration lawyer. A good one will not wave you off. They might charge for being a good listener. Two, attach a note explaining why you did not file a CA tax return with your N400. In the note, you can quote the relevant section of the California tax code. Being forthcoming will count in your favor. Three, find out if you can file state tax returns retroactively. Even if you had no taxable income for those years, you might be able to file returns now. It will cost you the fees for a tax consultant, but will give you peace of mind. For the third option, you should still submit an explanation with the N400. Lastly, HR Block folks might not be in a position to advise on the implications for your N400.

[ponyo_rocks]

Thanks for your replies, folks! I am still a way off from applying (husband applies in Nov and I apply around April next year), but I'll be back with an update!