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Archive for December 2011

2011 Dec 31 – Fallows

James Fallows
FATCA: the menace you’ll hear about in 2012
Atlantic (31 Dec 2011)


The story opens with mention of recent coverage in New York Times and Wall Street Journal. Foreign banks are rejecting US clients. US expatriates are divesting from the United States and looking toward renunciation of citizenship. “In practical terms, Fatca seems to be turning into a nightmare and disaster.”

Written by usxcanada

31 December 2011 at 6:00 am

2011 Dec 29 – Banks

Banks sweat as tax net tightens
Wall Street Journal (Online) (29 Dec 2011)


“New U.S. tax regulations … are prompting some foreign banks to ditch their customers and their American counterparts to worry that they could lose crucial deposits.”

Written by usxcanada

29 December 2011 at 7:00 am

2011 Dec 29 – Marsh

Ann Marsh
Why tax-compliant clients may soon find it harder to live abroad
Financial Planning (29 Dec 2011)


“Americans living abroad [after 2013] are going to find it very hard to maintain assets abroad. … This may be the widest expansion of jurisdiction by U.S. authority in American history” — H. David Rosenbloom, director of the International Tax Program at the New York University School of Law; former director of the Office of International Tax Affairs, U.S. Treasury

Written by usxcanada

29 December 2011 at 6:00 am

2011 Dec 27 – Jolly

David Jolly / Brian Knowlton
Law to find tax evaders denounced
New York Times (27 Dec 2011) B1


New requirements alarm businesses and citizens who are external to the United States.

Written by usxcanada

27 December 2011 at 6:00 am

2011 Dec 23 – Nightingale

Kevyn Nightingale
Specifics of the OVDI only raise more concerns
MNP.ca (23 Dec 2011)


“The IRS has now confirmed that the Fact Sheet [of Dec 8] was the guidance the Ambassador had alluded to when he promised further relief [on Oct 18].”

Written by usxcanada

23 December 2011 at 6:00 am

2011 Dec 21 – FATCA

FATCA implementation — upcoming challenges for 2012 and beyond
Accenture (21 Dec 2011)


Concerned with the technicalities of FATCA implementation, this article opens with an eight-point timeline stretching from 1 Jan 2013 to 30 June 2015.

Written by usxcanada

21 December 2011 at 6:00 am

2011 Dec 19 – McKenna

Barrie McKenna
Why the IRS crackdown puts Canadian banks in a tight spot
Globe and Mail (19 Dec 2011)


“Canadian financial institutions … will soon have to start tracking the citizenship of millions of account holders to identify their American customers. … European financial institutions are in full revolt. Several major banks … are already dropping U.S. customers, rather than comply with FATCA. … [Meanwhile,] the Canadian Bankers Association is already ramping up for FATCA.”

Written by usxcanada

19 December 2011 at 7:00 am

2011 Dec 19 – Webel

Beth Webel / Christopher Gandhu
Cut U.S. tax ties
Advisor.ca (19 Dec 2011)


Written by two tax practitioners with PricewaterhouseCoopers, this article provides a summary of the considerations attaching to relinquishment of US citizenship, including (1) three conditions that lead to continued taxation (2) exception for certain dual citizens from birth (3) exit tax and related categories of special property.

Written by usxcanada

19 December 2011 at 6:00 am

2011 Dec 17 – Golombek

Jamie Golombek
The IRS, expats and ‘reasonable’
National Post (17 Dec 2011) FP10

No link available.

Publication of a new IRS Fact Sheet is presented as follow-up on a “promise to grant relief to the estimated one million U.S. citizens, including dual citizens, living in Canada.” Treatment of late-filed FBARs depends on IRS assessment of “reasonable cause.” A partner from KPMG says that persons coming forward remain “at the mercy of the IRS” and “subjective determination.” A cross-border lawyer warns that reasonable cause is “a very narrow technical concept.”

Written by usxcanada

17 December 2011 at 6:00 am

2011 Dec 16 – Wood

Robert W. Wood
IRS exempts many expats from FATCA
Forbes (16 Dec 2011)


New in 2011, IRS form 8938 (Statement of Specified Foreign Financial Assets) sets thresholds at a level that will impact fewer filers than anticipated.

Written by usxcanada

16 December 2011 at 6:00 am

2011 Dec 15 – Saunders

Laura Saunders
Dual citizens face wrath of IRS
Total Return – Wall Street Journal (15 Dec 2011)


A few basic unsourced numbers for expatriates, their returns filed, and “amnesty” participants. Mention of recent IRS fact sheet.

Written by usxcanada

15 December 2011 at 6:00 am

2011 Dec 14 – European

European banks stop serving American customers
Spiegel Online International (14 Dec 2011)


“Several European banks have elected to no longer serve American securities investors” — German, British, Swiss — in response to new US reporting requirements. “Several large banks, including Credit Suisse, Barclays and the Canadian bank TD Bank have spent millions fighting the law.”

Written by usxcanada

14 December 2011 at 6:00 am

2011 Dec 13 – Luciw

Roma Luciw
Four tips for Americans looking to come clean on their taxes
Globe and Mail (13 December 2011)


A recent IRS statement on US citizens resident outside the United States brought mostly disappointment, especially to many noncompliant Canadian residents who seek relief and certainty. Tax professional Wayne Bewick offers four tips under the headings (1) Show reasonable cause (2) File six years of tax returns (3) Don’t delay (4) Keep your receipts.

Written by usxcanada

13 December 2011 at 7:00 am

2011 Dec 13 – Valli

Faizal Valli / Brian Dennehy
US citizens resident in Canada — common circumstances where US tax may be payable
Moodys Tax Advisors (13 Dec 2011)


Two tax professionals outline 12 instances of tax system “mismatch” where US citizens resident in Canada may have to pay tax to the United States even though none is due to Canada.

Written by usxcanada

13 December 2011 at 6:00 am

2011 Dec 10 – Saunders

Laura Saunders
What’s next for offshore accounts?
Wall Street Journal (10 Dec 2011)


Legitimate opportunities and incentives for US wealth to move offshore are contrasted with the crackdown following the 2009 UBS Swiss banking scandal, which has so far resulted in 36 convictions, 4 pending trials, and many more cases expected.

Written by usxcanada

10 December 2011 at 6:00 am

2011 Dec 9 – Dobby

Christine Dobby
IRS eases up on tax penalties for Americans living abroad
National Post (9 Dec 2011)


Dobby gives an account of the content of the Dec 7 IRS statement, noting: “The U.S. embassy [in Ottawa] said last week that the clarified IRS rules would allow those who took part in earlier amnesty programs to ‘opt-out’ and reapply under normal examination procedures, but this is not mentioned in the IRS fact sheet.”

Print: National Post (10 Dec 2011) FP6

Written by usxcanada

9 December 2011 at 7:00 am

2011 Dec 9 – Feldman

Amy Feldman
Taxpayers with overseas accounts seethe at big penalties due
Reuters U.S. (9 Dec 2011)


This story is based on “phone conversations and emails with more than a dozen people during the last three weeks” about their “stress, fear and attempts to do the right thing before the latest voluntary disclosure window closed in September.” Marvin Van Horn 62 in New Zealand suffered more than two years of negotiations that ended in an FBAR penalty of $25,000. Accounts included two persons from Canada, Ruth 53 in Kingston ON and a woman identified as L. 54 in Vancouver BC.

Written by usxcanada

9 December 2011 at 6:00 am

2011 Dec 8 – Livingston

Gillian Livingston
IRS hints at leniency for Americans living in Canada
Globe and Mail (8 Dec 2011)


An IRS release of Dec 7 “confirmed … that for Americans living outside the country it will waive penalties for not filing tax returns — providing those taxpayers owe no U.S. tax.” The IRS further “hinted that it may be lenient with penalties for those who have failed to file” FBARs. U.S. tax specialist Kevyn Nightingale in Toronto pointed to continuing lack of “certainty around penalties” and doubted that the statement offers much relief for current stress.

Written by usxcanada

8 December 2011 at 6:00 am

2011 Dec 7 – Egan

Louise Egan
Ottawa awaits U.S. accommodation on tax law
Reuters Canada (7 Dec 2011)


Canadian Finance Minister Jim Flaherty said he has had “further discussions” on FATCA with US officials and is waiting to hear back. “I certainly have the assurance from the secretary of the treasury that the matter is being reviewed, with a view to trying to be accommodative.”

Written by usxcanada

7 December 2011 at 7:00 am

2011 Dec 7 – IRS

Information for U.S. citizens or dual citizens residing outside the U.S.
IRS (7 Dec 2011)


This is the official statement from the US Internal Revenue Service that was foreshadowed by an Oct 18 Ottawa speech by US ambassador to Canada David Jacobson. “Taxpayers who owe no U.S. tax (e.g., due to the application of the foreign earned income exclusion or foreign tax credits) will owe no failure to file or failure to pay penalties. In addition, no FBAR penalty applies in the case of a violation that the IRS determines was due to reasonable cause.” Two subsequent paragraphs sketch considerations relating to determination of “reasonable cause.” Notice is given of new Form 8938. Nothing is said about mitigation of OVDI penalties.

Written by usxcanada

7 December 2011 at 6:00 am

2011 Dec 6 – Mendoza

Moises Mendoza
Stateless in Slovakia: what if you renounce US citizenship …
GlobalPost (6 Dec 2011)


Anarchist Mike Gogulski in Slovakia is one of two US citizens known to have chosen to become stateless.

Written by usxcanada

6 December 2011 at 6:00 am

2011 Dec 3 – Berry

Shawn Berry
Dual citizens catching break from IRS
Telegraph-Journal (3 Dec 2011) A1


Robert Gerard 64 of New Maryland NB, a retiree who has lived in Canada for over 35 years, helped organize a public forum on US tax enforcement at the University of New Brunswick. American citizens travelled from Miramichi, Woodstock, and Saint John. “We had 275 people there, we were expecting less than 50.”

Written by usxcanada

3 December 2011 at 7:00 am

2011 Dec 3 – MacKenzie

Amy MacKenzie
Americans living in Canada, beware of the IRS
New Brunswick Beacon [St Thomas University Journalism] (3 Dec 2011)


Marie Cashion, retired University of New Brunswick faculty, organized a Nov 28 public meeting in Fredericton about US filing requirements. Russell Hunt of St Thomas University is “staying away from the border” until the status of his noncompliance with FBAR is resolved. Ex-American lawyer David Lutz urged concerted action against the US measures.

Written by usxcanada

3 December 2011 at 6:00 am

2011 Dec 2 – Dobby

Christine Dobby
Tax respite in the works for Americans living in Canada
Financial Post (2 Dec 2011)
[ Print: U.S. IRS to ease up on tax fines for dual citizens: rules revised — National Post (3 Dec 2011) FP4 ]


Dobby indicates that US ambassador David Jacobson offered special words to Canadian residents: “Mr. Jacobson said clarifications to the IRS regulations as they apply to citizens in other countries besides Canada will also be forthcoming {{emphasis added}}, although he was not sure of the timing.” Jacobson is reported to have said: “Because there are so many more people in Canada who are subject to this than anywhere else in the world, we wanted to let Canadians know as soon as we knew what was going on.” Dobby observes that the “promised respite” will not mitigate the payment of “thousands on accounting and legal fees” by affected persons.

Written by usxcanada

2 December 2011 at 7:00 am

2011 Dec 2 – McKenna

Barrie McKenna
U.S. taxman to go easy on American residents in Canada
Globe and Mail (2 Dec 2011) B1, B11


McKenna hyped an October 18 statement by US ambassador David Jacobson as “a big break from Uncle Sam” for “Americans living in Canada who’ve neglected to pay their U.S. taxes” and went on to declare “the new rules will be announced within weeks by the IRS.” (The disappointing IRS document issued on Dec 7 reiterated existing policy, had no particular application to Canada, and said nothing about how “individuals who took part in earlier amnesty programs this year and in 2009 can reapply and get back penalties already paid.”) Mike Vance 26 of Nanaimo BC is “using this as a warning sign” and has embarked on “the complex process of renouncing his U.S. citizenship.”

Written by usxcanada

2 December 2011 at 6:00 am

2011 Dec # – Kellogg

Leslie R. Kellogg
Renouncing US citizenship?
Canadian Tax Highlights 19:12 (Dec 2011)

No link available.

Written by usxcanada

1 December 2011 at 7:00 am

2011 Dec # – Salahudeen

Adam Salahudeen
Important information about recent changes in U.S. tax legislation and enforcement
ScotiaMcLeod Exchange (winter 2011)


The first two pages of this semiannual newsletter from the brokerage arm of Bank of Nova Scotia address U.S. tax legislation and enforcement. The presumption of this article is remarkable: “For the most part, U.S. Persons are aware of their U.S. status and their duty to file a yearly tax return and other tax documents with the U.S. government.” Over half of the article is concerned with U.S. treatment of PFIC (known to ordinary investors as Canadian mutual funds).

Written by usxcanada

1 December 2011 at 6:00 am

Posted in Banking, Uncategorized