Ottawa, June 27, 2012
2012-072
The Honourable Jim Flaherty, Minister of Finance, today applauded the U.S. Internal Revenue Service’s (IRS) decision to help dual citizens residing in Canada deal with their U.S. tax filing obligations and provide assistance for people with Canadian retirement plans.
“We told the U.S. government that the vast majority of Canadians targeted were honest, hard-working and law-abiding individuals and they listened,” said Minister Flaherty. “The only transgression of these dual citizens has been failing to file IRS paperwork that they were unaware they were required to file. I am happy the U.S. government has listened to our concerns.”
The new IRS approach will provide simplified procedures to allow taxpayers who pose low compliance risk to become compliant with their U.S. tax and FBAR (Foreign Bank and Financial Accounts) filing requirements without facing penalties or additional enforcement action.
In addition, the IRS will streamline the process for U.S. citizens and dual citizens who have contributed to Registered Retirement Savings Plans or Registered Retirement Income Funds in Canada to take advantage of the provision in the Canada-U.S. Tax Treaty allowing deferral of taxation in the U.S. of income in those accounts, if they have not already done so.
“These are positive developments. It is yet another accomplishment for Canadians and a testament to our strong working relationship with our American neighbours. I appreciate the cooperative approach of the American authorities. Nevertheless, we will continue to advocate on behalf of Canadians on such issues with the U.S. government, including the implementation of FATCA (Foreign Account Tax Compliance Act),” said Minister Flaherty.
Mary Ann Dewey-Plante
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
