Foreign Tax Account Compliance Act – and how it could affect you!
If you are one of those Canadian residents that is also a US citizen, but you haven’t been compliant with your US filing and reporting requirements, you may want to consider taking advantage of the Offshore Voluntary Disclosure Program before it ends. Since 2009, the IRS has had special rules in place allowing Canadians in this situation to comply with their US filing and reporting requirements without penalty. Originally slated to end in 2012, the IRS has left this program open, but could announce its closure at any time. With FATCA in place, financial institutions will have to report to the IRS all clients who are US citizens and hold certain financial accounts. This means that the IRS will soon be aware of individuals who haven’t been compliant in their filings. This could mean tens of thousands of dollars in penalties for non-compliance. If you think this may be a situation that could affect you, talk to your financial advisor.