Some non-filers may find some relief from penalties and taxes. US citizenship is acquired at birth or upon naturalization and can be lost if certain acts are performed voluntarily and with the intention of relinquishing US nationality. Expatriating acts include naturalization in a foreign country and oath of allegiance to a foreign country, but not evasion of military service. Some formerly expatriating acts are now non-expatriating.
Citizenship is critical for tax purposes.
US citizens wherever resident are taxable on worldwide income, and their estates attract estate tax on their worldwide value. Shareholders may be taxed currently on undistributed earnings of certain non-US corporations. Certain gifts of property must be reported annually. Non-US citizens and residents and their estates have less tax exposure. As a practical matter, the US income tax liability of a US citizen resident in Canada may be minimal due to the foreign earned income exclusion and foreign tax credits.