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Discussion Starter · #1 ·
US citizen; permanent resident Canada.

I have several years of unfiled US taxes and am not eligible for Streamlined. I desperately need advice from an experienced tax professional as I am at a loss as to how best to become compliant. I had received some 'advice' from both an accountant and lawyer, but do not feel comfortable with the information provided (contradictory; incomplete; seemingly not well thought out). Due to the potential high tax burden, I really need a 2nd opinion.

Can anyone recommend an experienced tax lawyer/tax professional?

Thank you!
 

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US tax law tends to be somewhat vague and definitely open to multiple interpretations. If you aren't comfortable with the advice you've been given so far it's not clear that a different tax professional will give you any different (or any "better") advice.

The tax people you've consulted so far, were they in Canada or in the US? You could try to find an Enrolled Agent, which is a tax professional qualified by the IRS to prepare tax returns (and to represent clients in tax court). You can check the website for their professional association https://www.naea.org/ to see if there are any enrolled agents in your area - or find someone to deal with over the Internet.

An EA might give you a slightly different perspective on your issues.
Cheers,
Bev
 

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Discussion Starter · #3 ·
Thank you, Bev.

The tax people were in Canada. Accountant referred to the Lawyer; then each of them basically said 'ask the other one'... a very frustrating and costly experience without a solid plan/approach as an outcome.

Do you think an EA in the US would be better than one in Canada? Or were you simply asking (location) out of curiosity?
 

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As far as I know, there are US EAs in Canada. (Actually, there are a few here in Europe, too.) Just asking because the qualifications of a "tax adviser" outside the US may vary - and there are no actual "requirements" in the US for holding oneself out as a "tax adviser." A "tax lawyer" may be admitted to the bar in either the US or Canada or both.

The EAs may be accountants or lawyers, but at least there is a basic "certification" by the IRS directly. Not that that gives them all the answers, but it's at least a verifiable base line, whether the person is in the US or in Canada.
Cheers,
Bev
 

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Also, and I say this without knowing anything of your situation, slow down and take a deep breath and ask yourself if you really need to become compliant. Many people think they do but are far better served by staying out of the US tax system, even if they're at risk of being reported under FATCA. (This depends on whether you have Canadian citizenship, the presence of US assets and income, and various other factors.) You will find that the Isaac Brock Society is a good resource.

Lawyers and accountants generally have a bias towards compliance, which is not necessarily the wisest course of action, certainly not for dual citizens in Canada with no US ties.
 

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Discussion Starter · #8 ·
As a matter of fact, I just happened upon that information today. Thanks.

I know it's serious. I just don't know who to turn to for help (still). The current advice is to go down the OVDP path. I wasn't comfortable with it before I read the Dewee case and now even less so.
 

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If anyone recommends OVDP, not only should you fire them immediately, but also refuse to pay their bill. Absolutely idiotic advice unless you're some sort of actual criminal.

As I am dual and therefore cheerfully, unrepentantly non-compliant, I can't make a recommendation. But you might do worse than talking to John Richardson, who has a public profile campaigning against this idiocy, and seems to help people manage this problem in what appear to be sensible ways. Find him at Citizenship Counselling For U.S. Citizens in Canada and Abroad | Counselling, life planning, investment solutions, expatriation, U.S. tax assistance and citizenship solutions in a FATCAesque world!.

A US tax lawyer with a good reputation for solving thorny expat problems is Phil Hodgen (Google will find him). I expect he's not cheap, however.
 

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Discussion Starter · #10 ·
Thanks!

I couldn't agree more!! I'm just too much of a wimp to refuse to pay.

Phil Hodgen is awesome. Unfortunately for me, I cannot afford him.

I contacted John earlier and am waiting to hear back.
 

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And I just re-read the first post... If you're a US citizen only, then you need to take the situation more seriously, as you are less protected against IRS penalties etc.

I assume the Dewees case caught your attention: IRS fines Toronto man $165,000 for not filing forms; CRA helped collect - National | Globalnews.ca
Being a dual citizen does not absolve you of your U.S. tax obligations, unfortunately. And lawyers, CPAs, and EAs stress compliance not just because it's partially how they make a living, but also because the consequences of non-compliance can be huge.
 

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Thanks!

I couldn't agree more!! I'm just too much of a wimp to refuse to pay.

Phil Hodgen is awesome. Unfortunately for me, I cannot afford him.

I contacted John earlier and am waiting to hear back.

As Bev mentioned, what you probably need is an Enrolled Agent (EA) who specializes in expat taxes. That's all, really, unless your situation is so complex it warrants something more.

Even if you don't quality for the Streamlined Foreign Offshore procedures, that does not mean your situation is hopeless.

Also, participating in the OVDP does not mean one is a criminal; it just means that one was non-compliant, that's all.

There are numerous programs available to get caught-up, but one thing is for sure - do not take the advice given here by some people who recommend you to take no action and actually gloat about the fact that they are willfully being non-compliant.
 

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I'm going to take a sort of middle ground here. The Isaac Brock Society tends to promote the renunciation option, which is fine except that it does nothing for the tax years prior to when you actually renounce.

Living in Canada, which is just next door to the US makes your situation a bit trickier. The IRS has pushed compliance a bit heavier in Canada, and apparently has made some efforts to catch and prosecute tax issues in Canada. But no matter where you are, deciding on full compliance, partial compliance or staying under the radar really depends on your own risk assessment. That takes into account where your savings and investments are located, what other potential ties you have back to the US (i.e. the potential for inheritances from US family members, benefits from the US, etc.) and a number of other factors.

It's also possible to simply backfile "late" (no matter what level of compliance you choose) and pay the penalties and then see what happens.

Tax professionals insist on rather strict compliance (according to their own interpretation of tax rules) largely because if they're connected with multiple returns that wind up being audited and/or re-assessed, then their reputations (and business) are shot. So yes, they will tend to be particularly conservative in their interpretations.

Net-net, the decision is up to you, because even if you hire the world's greatest tax adviser, you're the one who is ultimately responsible for any IRS decision in your case.
Cheers,
Bev
 

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Anyone thinking of compiling with US tax obligations should first have an assessment done to see how much tax they may owe if any before making a decision of a course of action. I don't see why anyone thinking of compiling that is only guilty of some form crime, can't just come forward in a normal way and back file without entering a program. People were catching up for years like this before any amnesty program even existed. There is no law that says one needs to use a program. Those programs are designed to punish and confiscate assets.

It's OK if you are eligible for streamlined but anything else is ridiculous. Why would someone who is doing normal things like earning a living, investing for old age and maybe even owe no tax sign up for something like that?

I just read the Dewees case and it's disgusting! Punishing people with zero owing tax returns. Pilfering from other countries economies as well.

Hopefully the OP will get good advice from the lawyer provided by Nononymous
 

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Discussion Starter · #16 ·
FWIW, I contacted several EAs through the website listed above a couple of days ago and have not heard back from any of them yet.
 

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Due to the timing of the US tax season, it's highly likely that many EAs are just getting around to some well-earned vacation. (Generally speaking, they can get extensions of the filing date out until about October.) Give them a couple of weeks to respond.
Cheers,
Bev
 

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Discussion Starter · #18 ·
Makes sense. I assume that is why I am finding it difficult (in general) to get a hold of any type of tax professional at this time of year.

Thanks
 

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As Bev mentioned, what you probably need is an Enrolled Agent (EA) who specializes in expat taxes. That's all, really, unless your situation is so complex it warrants something more.

Even if you don't quality for the Streamlined Foreign Offshore procedures, that does not mean your situation is hopeless.

Also, participating in the OVDP does not mean one is a criminal; it just means that one was non-compliant, that's all.

There are numerous programs available to get caught-up, but one thing is for sure - do not take the advice given here by some people who recommend you to take no action and actually gloat about the fact that they are willfully being non-compliant.
We don't know the details of the OP's situation, but if it's simply failure to file returns and/or FBARs for a few years then OVDP with it's mandatory penalties is a likely a very poor choice. Early on, circa 2010, people were scared into compliance and directed into OVDP by tax professionals at huge personal cost, when they could have simply back-filed quietly or, in some cases been perfectly safe staying out of the system.

As for being willfully non-compliant, yes I do gloat a little, but it is generally the best course of action for dual citizens with no financial ties to the US (income, assets, future inheritance, regular work travel). I quite clearly followed up my first post to state that the OP, being a US citizen only, did not fall into that category. In fact it's a bad position to be in because Canada is one of a handful of countries with collection assistance in the tax treaty (hence the Dewees case). The flip side of that is that Canada will not assist with any form of collection against its own citizens, even if they are dual, so someone in my situation has nothing to fear.

I can think of no good reason for a person whose only connection to the US is birth to be in the US tax system, given the very real possibility of dual taxation (capital gains on primary residence) or inability to use certain investment vehicles due to complicated reporting and compliance requirements. Far better to simply remain off the radar.

Thanks to FATCA a US birthplace may cause problems with banking access in Europe or Asia, but enforcement in Canada is very weak, no validation is required when one simply fails to check the box for US citizenship upon opening an account.

But the OP, who is not a dual citizen, is in a very different situation than someone with the protections of Canadian citizenship, and should tread more carefully.
 

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A further thought. There are two lessons from the Dewees case:

One, obtain Canadian citizenship if you're going to live in Canada for a long time. Permanent resident status does not protect you from IRS collection efforts; citizenship does (though only for debts incurred as a citizen, not prior to naturalization).

Two, be wary of voluntary compliance. The reason Mr. Dewees got into trouble wasn't that the IRS found him, but that he learned of his filing obligation and his idiot lawyer told him to enter OVDP. Then he saw a six-figure bill for failure to fill out a certain form and, throwing good money after bad, paid the fine in order to contest it, unsuccessfully. I suspect that if he had simply said "****** that" and done nothing, he'd be in a far better position today. In his case, it's the consequences of *compliance* that were huge.
 
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