Clarity at last for US citizens in Canada that have not filed their tax returns

Fear and Uncertainty.  These two words were very representative of the general environment of US citizens in Canada that needed to catch up on US income tax return filings.  Until recently, that is.

If you are a US citizen living in Canada and have not filed your US returns for years, good news!

The IRS recently announced a new procedure for its citizens to come forward and comply.  The finer details have yet to be released, but most individuals will need only file three years of returns and six years of Report of Foreign Bank and Financial Accounts (“FBARs”).  The exact details of the procedures are scheduled to be released September 1, 2012.  For those individuals who want to come clean, and expect to owe $1,500 or less of taxes per year on their US tax returns (to be calculated by their tax preparers) this is great news. Prior to this announcement US citizens had no guidance on how far back they needed to file, and whether Canadian residents who had always been filing returns in Canada would receive leniency.

The combination of the recent IRS release and the December 2011 pronouncement that penalties will not apply in all cases means that fear and uncertainty should no longer be representative of the general environment.

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Disclaimer

Information contained within this blog or on this website, either expressly or by reference, does not constitute professional advice and is designed strictly for general information purposes. As individual circumstances vary widely anyone seeking assistance with either their accounting or tax situation are strongly encouraged to seek appropriate professional advice.

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