I AM A U.S. CITIZEN AND HAVE RESIDED IN CANADA FOR YEARS AND HAVE NOT FILED U.S. RETURNS. WHAT CAN I DO OR WHAT COULD HAPPEN IF I DO NOTHING?
I AM A U.S. CITIZEN AND HAVE RESIDED IN CANADA FOR YEARS AND HAVE NOT FILED U.S. RETURNS. WHAT CAN I DO OR WHAT COULD HAPPEN IF I DO NOTHING?

Answer

U.S. persons including U.S. citizens or green card holders residing in Canada who are not up to date with their U.S. filing obligations should consider the available programs in an effort to become tax-compliant.

The updated streamlined procedures announced on June 18, 2014 modified changes to the 2012 streamlined program, now known as the Streamlined Foreign Offshore Program (“SFOP”) requiring the filing of 3 years of past-due returns (with required disclosures and international information returns) plus 6 years of FBARs.

There were also modifications to the 2012 Offshore Voluntary Disclosure Program (“OVDP”) and a new streamlined procedure called Streamlined Domestic Offshore Program for U.S. persons residing in the United States.

The advantage of utilizing SFOP is that civil penalties including tax related penalties or information return penalties will be waived unless examination results in a determination that the original non-compliance was fraudulent and/or the FBAR violation was willful. Only tax payable, if any, and interest is due with the SFOP submission including all required international reporting forms. Upon filing under the SFOP, if there is a tax deficiency, tax related penalties could apply to the tax deficiency.

You may refer to www.irs.gov/Individuals/International-Taxpayers/Streamlined-Filing-Compliance-Procedures for detailed information.