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  • Writer's pictureFort Group CPA

Voluntary Compliance with the IRS for U.S. Citizens Living in Canada

According to recent estimates there could be anywhere between 900,000 and 2,000,000 U.S. citizens currently living in Canada. As residents of Canada these U.S. citizens living abroad are often correctly filing their Canadian income tax returns. However, many of these individuals are not filing their annual U.S. income tax returns. U.S. citizens often come to us with a variety of reasons for not filing a U.S. tax return while living in Canada. Most commonly a lack of awareness that a U.S. citizen must file an annual tax return regardless of the fact that they no longer live in the U.S. leads to compliance issues that must be resolved.

Fortunately, the IRS has recognized that some U.S. citizens have unknowingly been missing their annual U.S. tax filings and want to get caught up without being exposed to potential tax penalties. In an effort to help these taxpayers the IRS have instituted a series of programs that can allow U.S. citizens living abroad to come into full compliance with their federal tax filings without the fear of recourse from the IRS.


These such programs include the Offshore Voluntary Disclosure Program (OVDP), the Offshores Streamlined Filing Compliance Procedures and other programs for specific individual filings such as the Report of Foreign Bank and Financial Accounts (FBAR).


To date the programs have successfully helped more the 100,000 delinquent taxpayer’s get caught up with their U.S. filing obligations and provide a safe alternative to non-compliance for U.S. Taxpayer’s living abroad. In 2016 the IRS commissioner John Koskinen stated “As we continue to receive more information on foreign accounts, people’s ability to avoid detection becomes harder and harder. The IRS continues to urge those people with international tax issues to come forward and meet their tax obligations.”


If you are a U.S. citizen living in Canada who has questions about coming into compliance with their U.S. federal tax obligations please feel free to contact our US Tax group for a consultation.

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