Archive for September 2011
2011 Sept 28 – Zajac
Andrew Zajac
IRS strikes a conciliatory tone toward Canadians
Financial Post / Bloomberg News (28 Sept 2011)
http://business.financialpost.com/2011/09/28/irs-strikes-a-conciliatory-tone-toward-canadians/
Tax attorney Scott Michel estimates the number of Canadian residents affected by US disclosure requirements as closer to 750,000 than to one million. IRS spokesman Terry Lemons “sounded a conciliatory note in addressing individual Canadian reporting requirements” when he stated that the IRS “recognizes that many Canadians face complex tax situations because of dual citizenship.” In an April 2011 letter to IRS and Treasury officials, Peter van Dijk of Toronto Dominion Bank “estimated that complying with FATCA would cost $100 million.”
2011 Sept 28 – Get the IRS
Get the IRS taxman off the backs of innocent Canadians
Globe and Mail (28 Sept 2011)
The editorial concludes: “The Obama administration and the Congress should legislate forthwith to eliminate all heavy penalties against residents of Canada.”
2011 Sept 27 – Berry
Shawn Berry
U.S. tax rules cause concern for Canadians
Times & Transcript (27 Sept 2011) A10
http://timestranscript.canadaeast.com/news/article/1443228
Financial planner Terry Ritchie describes the situation of most noncompliant dual citizens as a matter of filing required reports rather than a matter of tax owing. “While he hasn’t seen a client penalized, he said it is a concern now.” Tax lawyer Paul DioGuardi says: “They’re not really tax evaders. They thought they’d paid everything up to date to Canadian authorities, and they did. They didn’t think they had to file in the United States.”
2011 Sept 27 – Cayo
Don Cayo
Bad options worsen for non-resident U.S. citizens targeted by the IRS
Vancouver Sun (27 Sept 2011) D4
http://www.vancouversun.com/options+worsen+resident+citizens+targeted/5466178/story.html
Cayo opens: “The issue isn’t unpaid taxes. … The issue is penalties.” Some have not known that they were US citizens, while others reasonably assumed they had lost that citizenship. Cross-border tax expert Ron MacDonald says noncompliance faces increased financial penalties, the possibility of criminal prosecution, and “even jail.” Colleague Jyothi Rao estimates “about half [of clients] decided not to proceed with filing.” Fees alone could amount to $100,000 or more. There is “no basis to predict a probable outcome” in present circumstances. “Non-compliant Canadian residents … could continue to do nothing, particularly if they can avoid ever again going to the U.S.”
2011 Sept 27 – IRS tax
IRS tax grab: Flaherty’s welcome entry into the debate
Windsor Star (27 Sept 2011) 2
http://www.windsorstar.com/news/Editorial+grab/5462567/story.html
The editorial opens: “The Internal Revenue Service is attempting to conscript Canadian banks in a cross-border tax grab that not only threatens individual privacy rights but Canadian sovereignty.”
2011 Sept 26 – Brooker
Kevin Brooker
U.S. taxman bullying citizens living abroad
Calgary Herald (26 Sept 2011)
http://www.calgaryherald.com/news/taxman+bullying+citizens+living+abroad/5457847/story.html
Columnist Brooker criticizes US exceptionalism, outlines the complexities and difficulties faced by dual citizens, and declares: “These people need protection from a bully, and it is imperative that the Canadian government agitates on their behalf.”
2011 Sept 26 – McKenna
Barrie McKenna
IRS tars law-abiding expats with same brush as tax cheats
Globe and Mail (26 Sept 2011)
After a survey of the effects of FBAR, FATCA, and OVDI, McKenna reports: “The IRS won’t say how many Canadians are among the 12,000 amnesty-seekers [in the second round of OVDI]. But accountants with dual Canadian-American clients say most have opted to stay in the shadows.” Two solutions are then proposed: coming into compliance without penalties, and unrestricted renunciation of citizenship. Without a reasonable possibility of resolution, “tens, and perhaps hundreds, of thousands of Canadians will continue to live like fugitives in their own country.”
2011 Sept 26 – Pritchett
Jennifer Pritchett
New U.S. tax law threatens savings
Telegraph-Journal (26 Sept 2011) A1
http://telegraphjournal.canadaeast.com/front/article/1442837
Russell Hunt, English professor at St. Thomas University since 1968, has stopped crossing the border “until the issue has been sorted out and he doesn’t plan to file an American tax return any time soon.” New Brunswick has many dual citizens. Member of Parliament John Williamson has heard from dozens of his constituents on the issue.
2011 Sept 24 – Dobby
Christine Dobby
U.S. campaign to catch tax cheats snaring Canadians
[ Print title: ‘Lost Americans’ vs. IRS: Canadians with distant links fearful of massive U.S. tax penalties ]
National Post (24 Sept 2011) FP3
http://business.financialpost.com/2011/09/24/u-s-campaign-to-catch-tax-cheats-snaring-canadians/
Minnesota natives Esther Thompson 70 and sister Betty 69, both married to retired Saskatchewan farmers, await the outcome of their participation in OVDI. Joint accounts with husbands that show large fluctuations related to grain sales cause them concern. So far each has spent $6,000 on legal and accounting fees. Tax analyst Cleo Hamel has never “seen anything like this that’s caused this much concern, even in Canadian tax.”
2011 Sept 24 – Steel
Suzanne Steel
Americans in Canada: Q and A
National Post (24 Sept 2011)
http://business.financialpost.com/2011/09/24/americans-in-canada-q-and-a/
Cross-border tax expert Christine Perry answers seven common questions: (1) Who is an American? (2) How can the IRS track down expatriates? (3) Under what circumstances do penalties apply? (4) To what extent can the IRS enforce penalties in Canada? (5) What effect does tax noncompliance have on travel to the United States? (6) What are the provisions for disclosure after the OVDI deadline? (7) What about informal disclosure without professional advice?
2011 Sept 23 – Crowder
Jean Crowder
New U.S. tax law creating privacy, cost concerns
Citizen (23 Sept 2011)
[ Note: No longer available through link ]
http://www.canada.com/creating+privacy+cost+concerns/5451221/story.html
Member of Parliament Jean Crowder outlines US tax issues and says that the New Democrat foreign affairs critic “will be contacting the Canadian embassy to raise our concerns with this legislation.”
2011 Sept 23 – Wilson
Carla Wilson
American tax hunt haunting Victorians
Victoria Times-Colonist (23 Sept 2011) B1
http://www.timescolonist.com/news/American+hunt+haunting+Victorians/5445345/story.html
The story features the “panic and anxiety” of a dual citizen who has lived in Canada for two decades without filing US tax returns. “Statistics Canada’s 2006 census information showed nationally that 226,755 people reported they held either single or dual U.S. citizenship. In B.C., that number was 48,945, and in Greater Victoria it was 5,215.” Accountant Terry Dyer reports “up to 65 calls a day … in late August as the initiative deadline approached.” He estimates that professional fees alone to achieve compliance “could reach $20,000 to $30,000.”
2011 Sept 22 – Freeman
Sunny Freeman
Ignorance no longer an excuse: Americans in Canada must file taxes to Uncle Sam
Winnipeg Free Press / Canadian Press (22 Sept 2011)
[ Note: No longer available through link ]
Tax professional Peter Aylett gives perspective on the situation of dual citizens in Canada. According to cross-border tax adviser Terry Ritchie, “Among some seven million Americans living abroad, only about 4.6 per cent have been filing returns in the U.S.”
2011 Sept 21 – Roseman
Ellen Roseman
United States clamps down on citizens living in Canada
Toronto Star (21 Sept 2011) B2
No link available.
The story opens with the case of Anita, a dual citizen who moved to Canada in the 1960s and has never filed a U.S. tax return. A cross-border tax expert says, “There’s a lot of hearsay, rumour and lack of facts out there.” Required FBAR reporting is “an even bigger issue” due to large penalties for failure to comply. The article closes with a look at the issue of renouncing citizenship.
2011 Sept 20 – McKenna
Barrie McKenna
IRS amnesty nets only 12,000 people
Globe and Mail (20 Sept 2011) B4
http://www.theglobeandmail.com/report-on-business/irs-amnesty-nets-only-12000-people/article2172006/
The OVDI program that expired on Sept 9 “has so far netted only 12,000 people and $500 million (US). … IRS commissioner Doug Shulman, however, hailed the figures as a sign the U.S. agency is making huge strides in finding offshore tax cheats.”
2011 Sept 20 – Protest
Protest U.S. tax grab
Toronto Star (20 Sept 2011) A26
http://www.thestar.com/opinion/editorials/article/1056365–protest-u-s-tax-grab
This editorial criticizes “a clumsy and unnecessarily harsh law that risks sideswiping hundreds of thousands of people living normal, law-abiding lives in Canada.”
2011 Sept 20 – Wente
Margaret Wente
Help! I’m on the IRS hit list
Globe and Mail (20 Sept 2011)
http://www.theglobeandmail.com/news/opinions/opinion/help-im-on-the-irs-hit-list/article2171697/
Columnist Wente and friends are “outraged [at] confiscatory and extraterritorial” US tax policy. Wente moved to Canada at age 13 and has held citizenship since 1979. Her brother renounced US citizenship at 17 after receiving a draft notice. Wente’s friend and his wife have been told their liability would be $250,000.
2011 Sept 19 – Steel
Suzanne Steel
Americans in Canada: tax confusion reigns
Financial Post (19 Sept 2011)
http://business.financialpost.com/2011/09/19/americans-in-canada-tax-confusion-reins/
A brief summary of the September 2011 situation is accompanied by a set of links.
2011 Sept 17 – Dioguardi
Paul Dioguardi
Innocents abroad
Calgary Herald (17 Sept 2011)
http://www.calgaryherald.com/news/Innocents+abroad/5418304/story.html
Tax lawyer Paul Dioguardi advocates Canadian government action to support US citizens resident in Canada.
2011 Sept 17 – Molgat
Kent Molgat
B.C. residents among dual citizens targeted by IRS
CTV News Video (17 Sept 2011) 2:26
Maury and Linda Williams face a $30,000 expense to become compliant with the US tax regime (eight years of filings) and they also fear for their children. Maury “left the U.S. in 1973 and has been a Canadian citizen for 25 years.”
2011 Sept 17 – Shecter
Barbara Shecter
Hands off our taxpayers, Flaherty tells U.S
National Post (17 Sept 2011) FP1
http://www.financialpost.com/personal-finance/Hands+taxpayers+Flaherty+tells/5417357/story.html
Canadian Minister of Finance Jim Flaherty has sent a letter of concern about IRS pursuit of US tax objectives in Canada. Recipients are the New York Times, the Wall Street Journal, and the Washington Post. Content of the letter is described. Canadian Bankers Association head Terry Campbell says the CBA “urged Canada’s Department of Finance to press the issue with its counterpart in the United States and with the IRS.” A concluding section provides six short paragraphs of numerical facts about OVDI.
2011 Sept 16 – Canada
Canada should protest unjust U.S. tax grab
Vancouver Sun (16 Sept 2011)
http://www.vancouversun.com/news/Canada+should+protest+unjust+grab/5412138/story.html
This editorial concludes: “Individual Canadians are powerless to fight this unjust tax grab. Ottawa must speak out about this financial assault on Canadians.” Criticism is directed at 2011 OVDI and proposed FATCA.
2011 Sept 16 – McKenna
Barrie McKenna
Flaherty slams IRS over cross-border tax crackdown
Globe and Mail (16 Sept 2011)
Canadian Minister of Finance Jim Flaherty has sent a letter of concern about “unnecessary stress and fear” placed on Canadians by IRS pursuit of US tax objectives. Recipients are the New York Times, the Wall Street Journal, and the Washington Post. Content of the letter is described.
2011 Sept 16 – Steel
Suzanne Steel
Read Jim Flaherty’s letter on Americans in Canada
Financial Post (16 Sept 2011)
http://business.financialpost.com/2011/09/16/read-jim-flahertys-letter-on-americans-in-canada/
The text of the 16 September 2011 from Canadian Minister of Finance Jim Flaherty to major US newspapers is provided.
2011 Sept 13 – Are You
Are you on the IRS hit list?
Globe and Mail (13 Sept 2011)
The entry includes a transcript of a Sept 14 Cover-It-Live discussion with tax specialist Wayne Bewick on US tax crackdown. Bewick concludes with anticipation of continued IRS pursuit and recommends seeking to become compliant as soon as possible.
2011 Sept 13 – Bhatti
Jay Bhatti
How U.S tax policy is forcing 5 million Americans abroad to reconsider citizenship
Business Insider (13 Sept 2011)
“In the past 6 months, I have seen a high level of fear, apprehension, and outright anger with regards to this US policy amongst not only US citizens living abroad, but also people looking to become US citizens someday.” Bhatti sees this situation leading to out-migration from the United States by foreign nationals and renunciation by expatriate US citizens.
2011 Sept 9 – Cross-border
Cross-border tax grab
Ottawa Citizen (9 Sept 2011)
http://www.ottawacitizen.com/business/Cross+border+grab/5374462/story.html
The editorial opens: “The U.S. government’s decision to aggressively enforce its overseas tax-reporting rules is cruel and manifestly unfair. The Canadian government ought to tell it so, in no uncertain terms.”
2011 Sept 9 – McKenna
Barrie McKenna
U.S. tax amnesty: Not cheap or popular
Globe and Mail (9 Sept 2011)
The OVDI program is set to expire at midnight.
2011 Sept 9 – Plattor
Candace Plattor
Get out of my pocket, Uncle Sam
Vancouver Observer (9 Sept 2011)
http://www.vancouverobserver.com/blogs/psyched/2011/09/09/get-out-my-pocket-uncle-sam
Personal narrative of a Canadian citizen who has “neither lived nor worked in the US since 1974” and has just discovered the liabilities imposed by US citizenship.
2011 Sept 8 – Luciw
Roma Luciw
U.S. tax-evasion amnesty deadline extended
Globe and Mail [Update] (8 Sept 2011)
The IRS has extended its OVDI deadline from Aug 31 to Sept 9. Toronto accountant Wayne Bewick cites the example of “one client with a net worth of $2-million who left the U.S. when he was 11 years old and has never filed a U.S. tax return. This client has decided to apply for the amnesty program and pay a huge fine [$125,000], even though he has not lived there in over 40 years.”
2011 Sept 6 – Cayo
Don Cayo
Obama asked to intervene in IRS assault on Canadian residents
Vancouver Sun [Matters blog] (6 Sept 2011)
“Today the American government has apparently become what it despises. Through its tax collection arm, the Internal Revenue Service, it has launched a campaign against its own non-resident citizens that’s every bit as arrogant and uncaring as the Brits ever were to the Americans.” Cayo goes on to publish the text of a letter that UBC history professor Maurice Williams of Kelowna has sent to President Obama.
2011 Sept 3 – Golombek
Jamie Golombek
The ultimate pledge of disallegiance
National Post (3 Sept 2011) FP9
http://business.financialpost.com/2011/09/03/the-ultimate-pledge-of-disallegiance/
Tax planner Golombek quotes tax lawyer Christine Perry on the approaching OVDI Sept 9 deadline. “Taxpayers must continue to deliberate over whether they should come forward voluntarily or take a wait and see approach.” “Some dual citizens are contemplating whether they should take the ultimate pledge of disallegiance.” Technicalities of relinquishment of US citizenship are compared with renunciation.
2011 Sept 2 – Christianson
David Christianson
Long arm of American tax law
Winnipeg Free Press (2 Sept 2011) B11
http://www.winnipegfreepress.com/opinion/columnists/long-arm-of-american-tax-law-129017373.html
Financial planner Christianson marvels at the response to his recent column on US taxation of Canadian residents: “We received more emails and phone calls from that article than any in the last 16 years of publishing this column.” Christianson categorizes reactions according to “financial personalities.” Rampant and most common was denial, with a few instances of anger and defiance. The difficulties of hiding will only grow. “At the other extreme [stood] borderline pathological rule followers … prone to panic when faced with stress.” Christianson finds disturbing the many cases where “tax advisers and accountants have wrongly told … many U.S. citizens living in Canada … that they have no filing requirement in the United States.”
2011 Sept # – Bernstein
Jack Bernstein
Obligations of US green-card holders and citizens
Canadian Tax Highlights 19:9 (Sept 2011) 9-10
For a Canadian, a US green card or US citizenship entail “a lifetime of weighty US tax responsibilities.” Ten specific points are enumerated and briefly discussed. FATCA and FBAR are included.
2011 Sept # – Frew
Erin L. Frew / S. Natasha Reid
US tax collection in Canada
Canadian Tax Highlights 19:9 (Sept 2011) 1-2
Ramifications in law of collection by Canada of U.S. taxes, interest, and penalties, with reference to the Canada-US treaty and selected relevant case law.
2011 Sept # – Ward
Robert E. Ward
Advising US citizens and long-term residents on expatriating
STEP journal (Sept 2011)
http://www.stepjournal.org/journal_archive/2011/tqr_september_2011/advising_us_citizens_and.aspx
STEP = Society of Estate and Trust Practitioners. This article with 75 footnotes is structured as a script of 23 questions with succinct summary of considerations. The meaty content may serve as detailed preparation for consultation with a professional. A confident do-it-yourselfer who is able to assess the information and their own competence may find that this substitutes, at least with regard to specific questions.
U.S. Citizens in Canada InfoShop 