U.S. Citizens in Canada
Under U.S. law any U.S. citizen, whether living temporarily or permanently in Canada, must annually report on all accounts above $10,000 and file a U.S. return.
This may include accounts such as the Tax-Free Savings Account, an RRSP, Mutual Fund investments and principal residences.
There are roughly a million U.S. citizens living in Canada, more than anywhere else. If these individuals don’t comply, they could be subject to penalties that include 25 percent of the amount of the undisclosed assets plus repayment of back taxes plus interest penalties plus possible imprisonment.
The U.S. laws apply even though these individuals may have disclosed and paid Canadian tax on all of the relevant income, often at higher rates than U.S. ones.
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