http://mopsicktaxlaw.blogspot.ch/2012/10/tax-justice-for-americans-abroad-some.html
You may qualify if you have less than $10,000 in U.S. Source income: Although it was not clear in my article, the Adams family was in trouble with the IRS simply because they had more than $10,000 in dividends from a U.S. based mutual fund. If that single fact were different and they could show the IRS that they never got more than $10,000 from a U.S. source, they could qualify under FAQ 52 category number 3, [2] provided they have been fully compliant with all the requirements of the Canada Revenue Agency during the years in issue.What makes this provision particularly appealing is the statement in the rule which says,For these taxpayers only, the offshore penalty will not apply to non-financial assets, such as real property, business interests, or artworks, purchased with funds for which the taxpayer can establish that all applicable taxes have been paid, either in the U.S. or in the country of residence.This means that for the Adams family in my article, they can sign up for the IRS’s OVDI program and file the requisite number of back tax returns and delinquent FBAR’s, and exclude from the 5% penalty base, any valuation of his manufacturing company in British Columbia, his business bank accounts, his vacation home on Vancouver Island which he rents out, and Grandma’s trust provided it does not earn more than $10,000 from U.S. sources in any given year.Even more appealing is despite the accounting fees and legal fees the family will need to pay to prove all this to the IRS, the foreign earned income credit and the foreign tax credit is likely to wipe out most or all of any U.S. taxes which might become due from their delinquently filed U.S. forms 1040***.
***Yeah right, probably in Canada, but not in some countries like Switzerland where the taxation structure is very different.
