have a US social security number (SSN);
ARE YOUR US TAX OBLIGATIONS UP-TO-DATE?
Over the past several years, media in Canada has been a tireless educator on the requirements of US citizens to file their US income tax returns and financial disclosure reports. These filing obligations exist whether or not the person lives in the USA. The financial penalty risk for non-compliance is very high and the future path of the duration or shape of the currently available tax amnesty programs is unknown.
If there is a US connection in your family (US place of birth, US green-card ownership, US citizen parent) you may be a US citizen even if you have lived outside the USA for most, if not, your entire life. In most instances, US citizenship does not go away just because you move to, or become a citizen of, a foreign country.
Streamlined Procedure for US Taxpayers Living Outside the USA
A US taxpayer in the current version of the Streamlined Foreign Offshore Compliance Procedures must:*
If the above requirements are satisfied the US taxpayer:
There are similar Streamlined Procedures for US taxpayers living in the USA (Streamlined Domestic Offshore Compliance Procedures). To be eligible, the US taxpayer must already have filed income tax returns for the past 3 years, in which there was an omission of foreign income, foreign asset or foreign financial disclosure. If so, the offshore financial disclosure penalty on the undisclosed foreign financial asset is 5% of the highest amount identified in the revised financial disclosure filings in the 6-year period. In addition, the participating taxpayers must remit additional tax and interest arising from the previously underreported income.
Taxpayers who timely filed their US tax returns reporting their worldwide income but failed to file certain disclosures will be eligible to come forward on a penalty-free basis with regards to the delinquent disclosures under the Delinquent Submission Procedures which is an administrative offshoot of the Streamlined Procedures.
How do I Comply under the Streamline Procedures?
As a general rule, it is advised that you connect with your tax practitioner and discuss the best course of action. Each taxpayer needs to evaluate which option is more appropriate given their individual circumstances.
The “Streamline” procedures may not be an option for the candidates who are seeking assurance that they will not be subject to criminal liability or substantial monetary penalties as they provide no protection against future IRS review of the years submitted. If the circumstances were such that there was a “willful” failure, the IRS could subsequently review the prior year submission and assess full non-disclosure penalties without protection.