Help! I would like a second opinion on what this page on the HR Block Canada site is really saying. It appears to me that they are either directly saying (or at least implying) that U.S. citizens in Canada MUST enter the Voluntary Disclosure Initiative. To me this sounds as though they are saying that people must enter the OVDI program that was reactivated in January 2012. VDI is certainly different from a general requirement to file U.S. tax returns. The page URL is here (it states a 2012 publication date):
What follows is an excerpt from the page. (You may want to read it all.) Am I misreading this? Am I misinterpreting this? How would a U.S. citizen in Canada interpret this? Help! At the very least I think this is highly misleading. I have highlighted certain parts. Your thoughts?
For US Citizens Living in Canada
Any US citizen who lives in Canada (regardless of when he or she moved here and regardless of how long he or she has stayed) needs to file a US tax return with the Internal Revenue Agency (IRS) under the Voluntary Disclosure Initiative (VDI).
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Key Points Relating to the VDI for Canadian Residents
- The IRS program formerly known as the Offshore Voluntary Disclosure Initiative (OVDI) is now closed. The final application deadline was August 31, 2011. This was not an amnesty program and as such venalities and interest were still imposed by the Internal Revenue Service where applicable. Therefore, the sooner a taxpayer files, the easier it will be to mitigate any penalties and the smaller any interest assessment for balances owed will be.
- The need for US citizens living in Canada to file under the VDI does not negate their obligation to file Foreign Bank and Financial Accounts (FBAR) forms and tax returns with the IRS. See below for more information.
- While there is generally a three year time limit to receive funds in return, there is no time limit when you owe taxes to the Internal Revenue Service. Furthermore, the statute of limitation does not start running until the tax return has been filed. Filing an incorrect or incomplete tax return will also prevent the statute clock from beginning to run.