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IRS cracking down on U.S. expat taxpayersSteep penalties for Americans who don't comply with U.S. tax lawsBy Jon Hembrey, CBC News Mar. 08, 2012 |
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 The 2011 tax year may be a pivotal one for many U.S. citizens living abroad, including the roughly one million living in Canada, as the Internal Revenue Service moves towards enforcing reporting guidelines and compliance rules for its expatriates. The United States requires all of its citizens file a tax return on global income regardless of where they live or for how long, even if no money is owed to the IRS. That applies to dual U.S.-Canadian citizens living here — even those who might have moved to Canada as a baby and never returned to their country of birth, let alone ever earned any income in the U.S. It also applies if a person has dutifully paid all their taxes — often at a higher rate — in Canada, although a treaty prevents such a person from getting dinged twice by the taxman. The U.S. government also requires Americans to file annual Reports of Foreign Bank and Financial Account (FBARs) if they held foreign accounts that, taken together, totalled $10,000 or more at any point in the tax year. In other words, the U.S. imposes tax obligations on the basis of citizenship, not residency. And the IRS can impose steep penalties on U.S. citizens for non-compliance. Read More |
