Rosenbaum & Frank LLP

 Surprise New IRS Reporting Requirements for Canadians

New IRS FBAR Reporting Requirements

Seminar at KPMG, Toronto
June 16, 2009

On June 16, 2009, AmCham Canada hosted a seminar at KPMG’s Toronto offices on the new Foreign Bank Account Reporting (FBAR) rules. Over 40 people attended, including business owners and executives from banks and accounting firms. The IRS has issued rules to expand the definition of US persons to include Canadian resident persons and companies regularly doing business in the United States. As a result of this change Canadian resident persons and companies would be required to report to the IRS all Canadian and other non-US financial accounts even if they do not have a place of business in the United States. These changes were to take effect on June 30, 2009. KPMG is in the forefront of addressing this issue and its impact on Canadians.

On June 5, 2009 the IRS deferred these reporting requirements for Canadians for one year because of the public outcry by AmCham Canada and other business groups. The IRS has asked for comments from the public by August 31, 2009. AmCham Canada will make submissions to the IRS.

The new FBAR rules have not been deferred for US citizens, US residents and US companies. Failure to properly file can result in harsh civil penalties and potentially criminal charges if FBAR reports are not received by the US Treasury by June 30, 2009 for calendar year 2008. The long reach of the IRS is expanding even further. The Obama Administration’s proposals, if enacted, will require many Canadian and other foreign financial institutions to report to the IRS all income paid to US citizens and US companies even if from sources outside the US.

Presentations on the details of these new rules and the scope of deferral were made by Jim Yager, Partner - International Executive Services, KPMG Toronto and Dean Smith, Principal, Cross Border Tax Services, Cadesky and Associates.

Event Sponsor

A Founding Member of AmCham Canada