Born in the USA? Time to pay attention to the IRS...

December 19, 2012 at 4:05 PM

                      The IRS has paved the way for non-resident, non-filing U.S. taxpayers to comply with their unmet U.S. tax filing obligations with less administrative burdens. The procedure is available for U.S. taxpayers who have resided outside the U.S. since January 1, 2009 and who haven’t filed a U.S. tax return during the same period.

Compliance Risk Assessment

The new procedure is specifically designed for taxpayers who present a low compliance risk.”  For these taxpayers, retroactive relief for failure to timely elect income deferral on RRSPs/RRIFs (Form 8891) is also available.  Submissions that present high compliance risk aren’t eligible for the streamlined processing procedure and may be subject to a full examination. 


In order to participate, a taxpayer must: (1) file delinquent tax returns, with appropriate related information returns (e.g. Form 3520 or 5471), for the past 3 years, (2) file FBARs (Form TD F 90-22.1) for the past 6 years, (3) pay any tax and interest along with the delinquent tax returns, and (4) submit a questionnaire, signed under penalties of perjury, with 20 “yes or no” questions outlining the factors considered in the initial risk assessment.

Specialized U.S. tax advice is needed in this area.