OVDI FAQ #17

[Pathologic1]

Concerned Canadian.
I agree with all you have said. Who knows.

They leave the door open to taking just about everything one might have. Nothing really there at all to protect you. Pretty one sided. Except the Canadian government says they won't collect FBAR and other fines levied for failing to file informational returns. So the CRA will continue to collect unpaid taxes with associated interest, fines, and penalties but will not do the same for informational returns like FBARs and presumably the rediculous form 3520. This would lead to the US trying to collect from you themselves and without the massive powers of the CRA.

Unless you have undisclosed income I think you may have been better off with quiet disclosure but you are obviously intelligent and aware of the possible bias in your lawyer. I'm not saying he's wrong, because I don't really understand the whole OVDI process but the US tax lawyers I spoke with seemed a little unclear and new to the whole thing and they too seemed to favor OVDI. In contrast, the US CPA expat accountant I spoke with and who did my taxes said his organization had done in excess of 300 quiet disclosures from several countries and had a problem with only one return and that one was from a person with undeclared income from a Swiss bank account (UBS).

Hopefully they will toss yours out from OVDI

PLEASE keep us posted as I will. It is very important that we share the knowledge about this dark and murky process.

And by the way there is long thread on the same topic

http://www.expatforum.com/expats/canada ... iling.html

Again if anyone ever hears anything back from the IRS please let us Know.

[madhoa]

If your lawyer is relying on the 'laziness' of IRS agents, then it seems to me that it would be better to do quiet disclosure, since there is at least some sort of discretion, where as once submitted to OVDI, there is no discretion and a formalized process to track entries.

My understanding is that you only meet FAQ 17 if you have reported all INCOME on a US tax return (not sure what happens if you are not required to file because you are below the tax limit), not just because you have no tax due. Thats the formal definition of FAQ 17.

Realistically, the IRS is extremely unlikely to pursue an expat who has little to no US source income and/or assets and has little to no tax due barring other irregularities.