Just retweeted this courtesy of Terry Ritchie.
Monday, March 05, 2012 by Kevyn NightingaleI have written previously about Americans in Canada who are delinquent in filing their US tax returns and Foreign Bank Account Reports.
What We Already Know
On December 1, 2011, David Jacobson, the US Ambassador to Canada suggested that the IRS may provide these people with some relief from the over-the-top penalties that can apply. The IRS issued a fact sheet on December 8, but that sheet basically reiterated the Service’s longstanding position. The IRS will evaluate each filing to determine whether the taxpayer has “reasonable cause” for filing late. There are no specifics about relief from penalties, so there is no certainty whether penalties will apply. Each taxpayer is dependent on the vagaries of the particular IRS agent assigned to her case.
The Good News
The good news though is that the IRS is acting on this imperative. On March 2 at the 36th annual Tax Law conference held by the US Federal Bar Association, IRS Chief Counsel William Wilkins said the IRS is “actively studying options for a different kind of kind of disclosure path for citizens residing abroad who do not have material US tax obligations.” This is the first time an IRS official has proposed something new on the record.
The 2011 OVDI has been reintroduced , essentially identically, for 2012.
But people anticipating coming forward should consider waiting until more details are forthcoming from the IRS.
This fellow is a lawyer in Toronto and I am quite surprised he would advise anyone to wait.
IF IRS really does develop a different kind of disclosure, do you think it would really change much? Would they stop asking for FBARS? 8938s? 1040s? Would they ever acknowledge our registered plans? Do you think anyone will re-consider renouncing?