Was OVDI the right choice for honest Cdn resident?

AtHomeinCanada · Post by **AtHomeinCanada** » Wed Sep 07, 2011 5:21 pm

I am a U.S. born citizen, that moved to Canada when I was a child, 35 years ago. I was raised as Canadian. I have only ever lived and worked in Canada. I do not even have a Social Security number. I never knew of any requirements to file US tax returns or FBARs.

When I read about it through an online news article, there was only a week left of the OVDI deadline. I was also out of town at the time. I panicked. Because of course I want to do the right thing. I tried to get an accountant but they were all fully booked with clients. I tried to get an appt at the US Consulate in Alberta, but again, they were fully booked. So, I quickly faxed a pre-clearance letter, and then sent couriers to OVDI to ask for a 90-day extension.

What I feel terrible about, aside from fears of loss of savings, is the 'criminal amnesty program.' I am an honest, law abiding person, who has always filed taxes in Canada. I am not hiding anything. I had no idea of this requirement to file in the US. I have no US income. I do have Canadian RRSPs and savings, because I do not have a pension plan. I have worked very hard to save this money.

Did I do the right thing by quickly applying to OVDI? Now that I take time to read other forums online, it seems this is a serious decision (which I made in haste due to the lateness of learning about it). I feel the program is more for the people who have income to declare, or tax returns to amend -- not intended for people like me, who were never aware in the first place. Some other people say they will just catch up on all the paperwork. However I have stepped forward under an amnesty program, when I was never doing anything wrong except living my life as a Canadian, and obeying all laws known to me. This means a penalty is automatic for me under OVDI.

Ultimately what I would like to do is be fully educated and compliant, and apply for my Canadian citizenship, because that is all I've ever really known, and that is where my heart and life have been spent. Should I opt out of OVDI? Or hope I qualify for the 5% (plus other penalties)? I'm scared and need some direction. Four different accountants quoted me about $15,000 Cdn to file my OVDI papers. I cannot afford professional fees AND penalties to the US government. I feel like I'm on my own, trying to do my best, and also counsel my family.

Thank you for any guidance/direction you can give me.

nelsona · Post by **nelsona** » Wed Sep 07, 2011 5:25 pm

No. You were classic case of quiet disclosure, like 1000's of US citizens have been doing for the past decade with no penalty.

Sorry that you were duped into this by tax lawyers looking to make a quick buck in difficult times.

tsanaha · Post by **tsanaha** » Wed Sep 07, 2011 5:40 pm

now what should he/she do ? as he has made noise already -- no point return to be quiet ?

still, opt out may be a good choice if the penalty is just too harsh to take.

madhoa · Post by **madhoa** » Wed Sep 07, 2011 6:00 pm

You don't sound like a good candidate for OVDI. And $15K for your paperwork seems extortionate. You would probably qualify for the 5% penalty, but even that might be too much for you. I don't think you would need professional help with your paperwork (and certainly not 15K worth).

If it makes you feel better, simply applying for the program does NOT make you a criminal. [Even quiet disclosure likely goes to a criminal investigator anyway, so VD is no different]

You could try opt out ..

tsanaha · Post by **tsanaha** » Wed Sep 07, 2011 7:58 pm

join

UBC history professor Maurice Williams of Kelowna "
no taxation without representation"

http://blogs.vancouversun.com/2011/09/0 ... residents/

nelsona · Post by **nelsona** » Wed Sep 07, 2011 11:33 pm

Let's be serious. QD does not trigger any criminal divison investigation.

And it is not taxation without representation. It is responsible citizenship.

tsanaha · Post by **tsanaha** » Thu Sep 08, 2011 4:45 am

What I do not understand about QD is

why QD no penalty --- and VD (or OVDI) not ?

does QD mean to sneak into IRS system so it is done without IRS notice.

as matter of law/policy --- the gov should be consistent. QD or VD should have the same result.

madhoa · Post by **madhoa** » Thu Sep 08, 2011 6:14 am

I didn't say that QD triggered a criminal investigation (any more than VD does). What I said was that QDs (at least those involving foreign accounts) are likely sent to a CI agent for vetting in any case (just as VDs are). Since the original poster seemed to be concerned about being branded a criminal simply because she (I think its a she) applied for OVDI, I was just pointing out that no -- that she was not branded a criminal, it was really no different from QD.

[ I surmise that QDs are vetted by CI because there was one case reported a few months back where someone tried a QD (which was incomplete, another strike) and got a visit from CI in 1 week --- this would imply that they are vetting QDs, although you likely have to done a lot of bad stuff and been stupid (incomplete disclosure) to be honored with a CI visit.]

nelsona · Post by **nelsona** » Thu Sep 08, 2011 10:22 am

Trying QD as an end-around tax evasion, and using QD legitamtely, as it has been for 20 years are 2 separate issues.

QD for soemone who never had an SSN and never lived/worked in US, will trigeer no investigation.

madhoa · Post by **madhoa** » Thu Sep 08, 2011 10:49 am

I am in violent agreement with that. All I was saying was that all QDs likely go to a CI person first, who does a quick check to verify that they are not investigating this case or have some other reason to be interested (say, really large sums of tax due, accounts in multiple tax havens etc.).

And the only reason I mentioned that was because the original poster seemed to be upset that she could be considered a criminal because she had applied for OVDI. I wanted to point out that simply having CI clear your case doesn't make you a criminal any more than say the routine police/FBI check that is done at immigration time, or the types of checks that some employers require.

nelsona · Post by **nelsona** » Thu Sep 08, 2011 11:55 am

I think you've made your point about why you said what you said.

AtHomeinCanada · Post by **AtHomeinCanada** » Thu Sep 08, 2011 12:37 pm

Thank you, I feel better about things, as I certainly don't need 'amnesty' - what I need is to understand my requirements, and then fulfill them.

The OVDI program is onerous for people like me who have no SSN, and never lived/worked or voted in the U.S. Having to prepare 8 years of paperwork AND pay a mandatory penalty, versus filing 3-4 years of paperwork and likely paying no penalty, doesn't make sense for me or my siblings to be in the OVDI program.

I left a message on the OVDI hotline for someone to call me back and advise about opt-out procedures. I feel I've made my life way more complicated than it needs to be, by sending off the OVDI request without fully understanding it. Ah, the result of bewilderment and time pressure! I hope they will let me out without too much headache.

tsanaha · Post by **tsanaha** » Thu Sep 08, 2011 1:03 pm

my understanding is that you have to be formally into OVDI before opt out.

just wonder what the hotline will say, please keep us informed.