The American tax authorities have declared something of an amnesty for expats. Individuals with sole US or dual citizenship will have the opportunity to proactively come forward to the IRS to disclose any previously secret offshore bank accounts or tax returns that have not been filed.
Beginning on 1 September the amnesty will also apply to Americans with offshore pension plans including those based in Canada.
However, it is important for expats to note that this will only apply to those with small sums payable in back taxes typically less than $1500.
The IRS has been prompted to act in this way due to a widespread lack of knowledge amongst expats about the tax they are liable to pay. Many expats are unaware of Foreign Bank and Financial Account Reports or the new rules on foreign bank account and tax returns.
Expats who have used offshore financial instruments to hide large sums of money will not be able to take advantage of the new policy. This comes at a time when the IRS are attempting a renewed clampdown on offshore tax dodgers.
In a statement IRS Commissioner Doug Shulman said, "Today we are announcing a series of common-sense steps to help U.S. citizens abroad get current with their tax obligations and resolve pension issues,"