Canadian Finance Minister has welcomed the US government’s decision to help dual citizens residing in Canada deal with their US tax filing obligations. The Internal Revenue Service (IRS) will also offer assistance to those with Canadian retirement plans. Taking a new approach, the IRS will provide simplified procedures to dual citizens. It will allow taxpayers posing low compliance risk to become compliant with their US tax and FBAR (Foreign Bank and Financial Accounts) filing requirements without facing penalties or additional enforcement action.
The IRS is also due to streamline processes for US citizens and dual citizens who have contributed to Registered Retirement Savings Plans or Registered Retirement Income Funds in Canada. It will allow them to take advantage, if they have not already done so, of the provision in the Canada-US Tax Treaty which permits deferral of taxation in the US of income in those accounts.
