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ARTICLE · 16 MARCH 2020

Reporting Relief For US Citizens Residing In Canada

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Complying with US tax reporting is often a complex and time-consuming process for US persons living abroad.

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Aasim Hirji
Aasim Hirji
Jennifer Silvius
Jennifer Silvius
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Complying with US tax reporting is often a complex and time-consuming process for US persons living abroad. For US persons living in Canada, navigating US tax issues is even more complex because many common Canadian investment plans (including Registered Education Savings Plans ("RESPs") and Registered Disability Savings Plans ("RDSPs")) are classified as foreign trusts for US purposes, and require annual disclosure on Forms 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts) and 3520-A (Annual Information Return of Foreign Trust with a US Owner). These forms also come with steep penalties for the failure to timely file, and many otherwise compliant taxpayers have been hit with penalties in excess of US $10,000 because of inadvertent late filings.

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