Required: Identify U.S. Citizens to IRS

Starting in 2014, the U.S. Internal Revenue Service will require foreign financial institutions to identify all accounts held by Americans, and this means that many Canadian banks and brokers will need tobegin documenting customers withties to the U.S. The United States requires its citizens to report their worldwide income to the IRS every year no matter where they live, as their tax system is based on citizenship, not residence as it is here in Canada.

Those who have filed in Canada will be in better shape than those who don't on both fronts: with CRA and the IRS, which gives credit for taxes paid in Canada. However, the IRS will penalize those who have not filed; and frankly, Canada will too, if money is owed. If you have not filed in Canada it's best to see a qualified tax practitioner now to make a voluntary disclosure and file under our Taxpayer Relief Provisionswhen applicable.

If you are a U.S. citizen living in Canada you are required to file both U.S. and Canadian tax returns. The IRS Voluntary Offshore Disclosure Program offers reduced penalties for delinquent U.S. tax citizens when they file their outstanding tax returns from 2003-2010. This program expires on August 31st, so check now with a U.S. tax specialist for assistance in completing your U.S. tax filing obligations.

ADDITIONAL EDUCATIONAL RESOURCES: Essential Tax Facts 2012