IRS announces more tolerant policy on U.S. taxpayers living outside the U.S.

The IRS has announced that it will not seek penalties against U.S. citizens living abroad who have failed to file U.S. tax returns, if there was no tax due and the proper returns are filed for the last six years. The IRS has also suggested that it will not likely seek penalties for failure to file information returns, where the accounts in question were established in good faith and were not related to a scheme of tax evasion. This is a much more generous policy than the recent "amnesty" that was just ended. More information can be found in the recent IRS press release.

All U.S. citizens are required to report their world wide income annually to the I.R.S., and are also required to file reports, known as "FBARs" of all foreign bank accounts. over which they have signature authority, if the total amount of all such accounts exceeds $10,000 U.S. Balances in RRSP plans must also be reported on income tax returns. This includes persons who are U.S. citizens by birth to U.S. parents, even if they are not born in the U.S., and also includes dual citizens. U.S. law provides for stiff potential penalties for persons who do not file U.S. tax returns and informational returns including FBARs.

We offer a number of services to persons in Canada who are concerned about their U.S. tax situation. We can help you determine if you are in fact a U.S. citizen. We can refer you to competent tax advisors who specialize in this area. We can discuss the option of renunciation of U.S. citizenship, and assist you in the process if you choose to renounce. In some cases, we may be able to apply for proof that you may have lost your U.S. citizen as a result of naturalizing in Canada. Contact us by email or call our Canadian office at 902-275-2889. For more information, see our web page on renunciation.