My clients are US Citizens. They surrendered a Life Insurance policy to Sun Life (a Canadian company). They received Canadian financial documents and what looks like tax forms. The proceeds were $15553. The Cost Basis is reported as $3885. It looks like Canadian tax was withheld in the amount of $2590. HELP! Do we have to file a Canadian tax return? I've never done that. I assume it's necessary to report the transaction on their US return? if so, how? Is there any recourse for the amount withheld? Thank you for any guidance.