For several years now, the Internal Revenue Service (IRS) has been engaged in a vigorous campaign against international tax fraud and failure to declare bank accounts outside the U.S., including Canada. As a U.S. citizen or resident alien (including green card holders) residing in Canada, what are your U.S. tax obligations and what solutions are available to you?

U.S. income tax return filing requirements

U.S. citizens and resident aliens residing outside the United States are required to annually file a U.S. income tax return and declare worldwide income to the IRS, insofar as this income is equal to or greater than the personal exclusion amount and the applicable basic deduction.

The application of specific U.S. deductions combined with the foreign tax credit and the exemptions of the Convention Between Canada and the United States of America will, in the majority of cases, makes it possible to avoid double taxation.