@aussiebobaustin , having gone through the thread again and generally agreeing with the points made by my colleague @Opus 17 , I am not sure that I understand the reasoning behind your doubts as to the path to follow:
(a) As far as I know Australia , like most countries and unlike US , taxes either by source or by residence or both. Thus if you are no longer a resident of Australia, then you are taxed ONLY on Australia sourced income ( the treaty specifically control the right to tax govt. remuneration and public sourced payments / distributions ). This is pretty common for most countries. Thus your US sourced pension ./ Social Security are generally taxed only in the USA.
(b) Therefore you can always ignore the treaty benefits and recognize the Australian income as from a foreign trust and pay taxes as ordinary income ( note that per your earlier statements and if your employer did not include its contribution to the fund , on your behalf, as taxable income to you ) with a basis of zero i.e. it is all taxable .
(c) I do not believe you will find a different answer that will stand the test of IRS audit ( in that rare case ) -- the laws are pretty clear. Also depending on the actual facts, the tax attracted by this distribution may pale in comparison to employing a tax professional familiar with the subject and/or defending an audit.
That is my two cents.
Is there more I can do for you ?
pk
