Looking for a US Tax preparer

Fellow bean counters, I am looking for a tax preparer, in the YEG area, that is knowledgeable about non-resident US citizens filing US taxes. The husband is a US citizen but his wife and kids are Canadian and I have filed the last 3 years of T1 returns. The husband is anticipating he will receive a US inheritance in the future and wants to get out in front regarding any IRS issues. He has only worked in Canada but has never filed a US return. If you’re interested in taking this client on, let me know and I will provide my contact number. Thanks

Keith Verdin

I presume your client already has some awareness of the situation, he probably needs to do a “streamlined foreign offshore” kind of filing, not just a tax return…

  • the streamlined (SFOP) filing is a type of voluntary disclosure/amnesty program offered by the IRS. I am presently dealing with this myself (except I renounced my citizenship, so a different program).

US citizens are required to file US returns even if there’s no income. Each missed form generates its own penalty. Count the number of forms per year x number of years not filed x penalty per form = total penalty. Then add interest. Heard of a doctor once who owed $600,000. No tax. Just penalties and interest. He’s never crossed the border since this was revealed to him.

are there that many forms that can generate penalties? Perhaps they are lucky and not offside on them and can just file returns regularly?

Most forms don’t have penalties associated with them but there are a few exceptions. FBAR’s (Canadian bank accounts for more than $100k US), Form 3520 (trust returns) and Form 5471 (if they have Canadian Private Corporations) are the three I can think off off hand. As long as you only have Canadian sourced income however you are generally okay filing regular tax returns as long as you don’t have trusts or private corporations. I have never seen them assess FBAR penalties but they do regularly assess them on form 5471 and 3560 - I suspect a large part of the doctor’s problem was these forms over multiple years.

My understanding is that the FBAR threshold is 10K (not 100) US collectively i.e. sum of all bank and investment accounts except RSP’s. And then there is a related tax form 8938 that has a higher threshold. And trust filing may extend to ownership of certain mutual funds…
I would suggest your client do a bit of digging around, there is a LOT of information out there re: US Expat tax filing.

Sorry - yes collectively $10k and not $100k. Typo error on my part. As far as I am aware RRSP’s do have to be reported on the FBAR’s as well. Mutual funds are not reported on form 3560 as far as I am aware but they do have a separate form to report that sort of thing on and I forget off hand what form number it is.

Maybe its the 8938 that doesn’t count RSP’s (I know something doesn’t) ? And yep, mutual funds go on the 8621 - I was getting confused as I think I have both. There are SO many potential complications!