In June of 2012 the IRS announced streamlined procedures for non-resident US taxpayers (often applicable for Canadian tax residents with US citizenship) who wanted to become compliant with their US tax returns for prior years.
The streamlined procedures came into effect on September 1, 2012 and unlike prior years the IRS has developed specific procedures for non-resident US tax payers to become compliant with their US returns
The new procedures are intended for taxpayers that the IRS considers “low compliance risk”. Generally speaking a taxpayer will be considered “low risk” if the amount of US tax owing for any particular year filed is under $1,500 (discuss with a professional other factors for compliance risk assessment that may also be considered by the IRS)
To be eligible for the streamlined procedures the taxpayer must:
- Be considered “low compliance risk”
- Have resided out of the US since January 1, 2009
- Must have a valid US tax identification number
A summary of the streamlined procedures are as follows:
- Submit complete and accurate US tax returns for the last 3 years
- Submit any taxes owing for those years
- If applicable submit complete and accurate FBARs (form TDF 90-22.1)
- Submit a copy of the new streamlined filing questionnaire
- Submit relevant late filing treaty elections e.g. Canadian RRSP deferrals
Note that the procedures listed above are general guidelines only and each taxpayer’s situation and requirements will vary according to circumstance. Consult a competent tax professional before assessing your tax filing requirements under the new streamlined tax filing procedures.
To discuss your US tax filing obligations and to assess if you’re eligible for the new streamlined US tax filing procedures please call us at 250-381-2400 or you can contact us electronically here.