Before You Hire a Cross-Border Accountant: Why a Written Position Review First Saves the Engagement You Don't Need

The cross-border client's first conversation with any firm is usually a mismatch: the client describes a situation, the firm quotes a return, and neither knows yet whether the situation is the one described. A position review exists to fix the sequence. What it is: a fixed-scope, written analysis of the client's cross-border tax position — residency status in each country under the domestic tests and the treaty, the returns and information forms actually required for the current year and any open prior years, the elections and positions in play (or missed), the accounts and assets with their reporting consequences, and the exposures (penalties, statutes, mismatches) that exist today — delivered as a document the client can read, keep, and hand to any preparer, with a recommended path (annual compliance, a catch-up procedure, a restructuring, or nothing) and an estimate of what that path involves. What it covers, concretely: residency — are you a resident of Canada, the US, both, or neither, on what date did it change, and does the treaty tie-breaker apply; obligations — which returns (T1, 1040, 1040-NR, section 216 or 217, state), which information forms (FBAR, 8938, 8621, 3520, 5471, T1135, T1134), for which years; elections — the departure-basis election, the Roth election, the RRSP deferral, the net election on US rental income, the section 962 election, the 45(2) election, and whether each was made, should have been, or still can be; accounts — the TFSA, RESP, RRSP, Canadian funds, US retirement accounts, corporations, trusts, and real property, each with its treatment and its recommended disposition; exposures — the years still open, the penalties that could attach, the double-tax leaks that exist, and the mismatches between what was filed and what the facts required; and the path — what to do, in what order, with what it will roughly cost in professional time (the pricing page carries the fee structure; the review's job is to say which service applies). What it is not: it is not the preparation of any return; it is not a substitute for the catch-up procedure, the departure engagement, or the annual filing it may recommend; it is not legal advice on willfulness or criminal exposure (the civil-versus-criminal guide covers when a lawyer, not an accountant, is the first call); and it is not free — a fixed fee buys a document, credited in full toward the engagement if you proceed within 60 days of the written report, with the fee set out on the Position Check page rather than in this article. Why first: the client who engages return preparation without a review often buys the wrong service — a 1040 prepared for a year that needed a streamlined submission, a T1 prepared for a year the client was a non-resident, a section 216 return for a property that needed an NR6 first, annual PFIC forms for funds that should have been sold — and the review's fixed cost is routinely smaller than the cost of the wrong engagement, or of the right engagement started late; the review also produces the document the client can take to another firm, which keeps the client's options open and makes the review's recommendation accountable. Who benefits most: the person who has just moved (either direction) and doesn't know which of the guides on this site apply to them; the accidental American who has just learned they are one; the emigrant with a decade of Canadian filings and no idea whether the departure year was done right; the family with a mixed-status marriage, a corporation, or a trust that has accumulated forms; the retiree about to draw on accounts in both countries; and the client who has received a letter from either agency and wants to know what it means before responding. Who doesn't need it: the established American in Canada with a competent annual preparer and no changes (the annual engagement is the right product); the Canadian snowbird with a 8840 and nothing else (a form, not a review); and the client whose situation is genuinely a single return with no cross-border features. How to use the document: read it; ask the questions it raises; decide on the recommended path (with this firm or another); and keep it — the review is dated, and the next life event (a move, a marriage, a sale, an inheritance) is the moment to update it rather than start over. The honest framing of the sales pitch: this firm offers the review as a service, at a fixed fee set out on the Position Check page and credited in full if you proceed within 60 days of the written report, and recommends it as the first step because the engagements that go wrong in this corridor go wrong at the scoping stage — the review is the scoping stage, done once, in writing, before anyone prepares anything.

Key takeaways

• A position review is a written scoping document: residency, required returns and forms by year, elections made or missed, accounts and their treatment, exposures, and a recommended path with a rough estimate of the work.
• It precedes preparation: the wrong engagement (a 1040 for a streamlined year, a T1 for a non-resident year, PFIC forms for funds that should be sold) costs more than the review that would have prevented it.
• It is not the return, not the repair, and not legal advice: it says which service applies; the pricing page says what the services cost; a lawyer answers the willfulness question.
• Who needs it: recent movers, newly discovered accidental Americans, emigrants unsure about their departure year, mixed-status families with entities or trusts, retirees about to draw in both countries, and anyone holding a letter from either agency.
• Who doesn't: the established filer with a competent annual preparer and no changes, the snowbird who needs only a form, and the single-return client with no cross-border features.
• Keep it and update it: the document is dated; the next life event updates it rather than restarting the analysis.

What a review answers, in one page

Where am I resident, and since when? Which returns and forms do I owe, for which years? Which elections did I make, miss, or still have time for? Which accounts and assets should change? What am I exposed to today? What should I do first, second, and third — and roughly what does that involve? Six questions, one document, before any return is prepared. The Position Check is this firm's version of it — a fixed-fee written report, credited in full toward the work if you proceed within 60 days; the pricing page carries the firm's ongoing service fees.

Worked example

A Kelowna physician, US-born and raised in Canada, contacts the firm after a FATCA letter, asking for "a US return." The review, delivered within a few business days: residency — Canadian resident, US citizen, no treaty tie-breaker issue; obligations — no US returns ever filed; six years of FBARs owed on accounts far above the threshold; Form 8938 for the RRSP years; 8621s for the Canadian funds in her TFSA and taxable account; no 3520 position taken on the TFSA; elections — the RRSP deferral automatic once returns are filed; no others in play; accounts — the TFSA to close, the taxable account's Canadian funds to replace, the RRSP fine; exposures — all years open, information-return penalties waivable through the streamlined foreign offshore procedure, no willfulness indicators, no criminal exposure; path — streamlined submission (three returns, six FBARs, the 8621s, the certification), then annual compliance with the credit method and the refundable child tax credit for her two children, then the portfolio rebuild; rough scope — a catch-up engagement plus an annual package, priced per the pricing page. She had asked for one return; the review showed she needed a procedure, and the procedure's cost was a fraction of the penalties it waived. Her colleague, who skipped the review and engaged a US preparer for "this year's 1040," filed a single resident return for the current year — a quiet disclosure that advertised six unfiled years to the IRS, forfeited the streamlined procedure's certification for those years, and required a repair engagement that the review would have prevented for its fixed fee.

Official sources

The IRS explains that the streamlined filing compliance procedures are available to taxpayers whose failure to report foreign financial assets and pay tax did not result from willful conduct, requiring amended or delinquent returns for the most recent three years and FBARs for the most recent six years, with the offshore penalty waived entirely for eligible taxpayers residing outside the United States. — Internal Revenue Service, Streamlined filing compliance procedures, https://www.irs.gov/individuals/international-taxpayers/streamlined-filing-compliance-procedures

The CRA lists the significant residential ties that determine residency status as "a home in Canada," "a spouse or common-law partner in Canada," and "dependants in Canada." — Canada Revenue Agency, Determining your residency status, https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html

Practitioner note

The engagements that go wrong in this corridor go wrong at scoping, which is why we sell the scoping as its own product and recommend it before anything else: a written position review that answers residency, obligations, elections, accounts, exposures, and path in one document the client keeps and can take anywhere. The physician who asked for 'a US return' and needed a streamlined procedure is the pattern — the review is cheaper than the wrong engagement, and the right engagement started late is the most expensive thing we see.

See also: For the status options and tax start dates when an American moves to Canada, see the status options and tax start dates when an American moves to Canada; and browse every cross-border tax topic guide, organized by situation.

Next step

Fairlight prepares the Position Check — the written review of residency, required returns and forms by year, elections, accounts, and exposures, with a recommended path and scope, delivered before any preparation is engaged. See cross-border pricing or book a call.