This new streamlined filing program is designed specifically for low compliance risk taxpayers. All submission will be reviewed by the IRS. Should your returns present a low compliance risk, the IRS will expedite the review and will not assess penalties.
Who can file under the ‘Streamlined Filing’ program?
You are eligible if you meet the following criteria:
- Resided outside the US since January 1, 2009
- Not filed U.S. tax returns during this period
- Present a low compliance risk
Determining your compliance risk?
Low risk is determined based upon a simple tax return and less than $1,500 tax due in each of the years. There are several risk factors that can increase the risk level.
- If any of the returns submitted through this program claim a refund;
- If there is material economic activity in the United States;
- If the taxpayer has not declared all of his/her income in his/her country of residence;
- If the taxpayer is under audit or investigation by the IRS;
- If FBAR penalties have been previously assessed against the taxpayer or if the taxpayer has previously received an FBAR warning letter;
- If the taxpayer has a financial interest or authority over a financial account(s) located outside his/her country of residence;
- If the taxpayer has a financial interest in an entity or entities located outside his/her country of residence;
- If there is U.S. source income; or
- If there are indications of sophisticated tax planning or avoidance.
What is to be filed?
Taxpayers under this program will be required to file US tax returns for the past 3 years, along with all related information returns and FBARs for the past 6 years. Any tax and/or interest is to be remitted at the time of filing. There is an additional questionnaire that must be submitted with the returns.
What if you are filing amended tax returns?
The IRS will treat amended returns submitted through this program as high risk and subject to examination.
There is, however, one exception to this. The IRS will accept amendments to the tax returns should the sole purpose be to late-file Form 8891 to take advantage of the deferral of income election for certain retirement or saving plans (RRSP, RRIF).
AG TAX LLP Can Help
If you have any other tax-related queries, and/or need assistance with tax planning/filing please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian tax laws and can provide you the right guidance to handle your tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canada and other international tax laws.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a consultation to discuss your tax related queries, please contact us at:
- 416-238-5920 (Greater Toronto Area, ON)
- 604-538-8735 (Greater Vancouver Area, BC)
- 780-702-2732 (Greater Edmonton Area, AB)
Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.