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Archive for January 2012

2012 Jan 30 – Smith

Hannah Smith
Treasury calls for FATCA exemptions on eve of new proposals
Investment Week (30 Jan 2012)


The United Kingdom Treasury is pressing for a “country to country” application of FATCA. “HM Treasury will not allow any legislation which undermines the UK’s own national sovereignty and tax framework.”

Written by usxcanada

30 January 2012 at 7:00 am

2012 Jan 30 – Toneguzzi

Mario Toneguzzi
U.S. tax crackdown has American citizens in Calgary scrambling
Calgary Herald (30 Jan 2012)


[ Similar: American expats scramble to file taxes (31 Jan 2012) ]

The story amounts to an interview with Moodys Tax Advisors, a firm that recognized an underserviced area in Calgary about three years ago. According to leader Roy Berg, the IRS has just released statistics showing “only 11 per cent of citizens residing abroad are compliant” with U.S. requirements. Numbers for US citizens resident in Calgary range “between 80,000 to 100,000” at a “best guess.”

Written by usxcanada

30 January 2012 at 6:00 am

2012 Jan 29 – Houlder

Vanessa Houlder / Shahien Nasiripour
US rethinks offshore tax evasion reporting rules
Financial Times (29 Jan 2012)


“The IRS is expected to narrow the focus of the rules on to larger accounts and bring the procedures required to identify US clients closer in line with the procedures that financial institutions already follow.”

Written by usxcanada

29 January 2012 at 6:00 am

2012 Jan 28 – Hodgen

Phil Hodgen
New website with offshore bank account, expatriation information
Hodgen Law Group (28 Jan 2012)


Hodgen commends the Canada-based Isaac Brock Society web site and offers brief comment on OVDI/FBAR cases and on expatriation. Hodgen writes this blog entry from the Middle East where he is encountering “massive, massive interest” in cancellation of US citizenship.

Written by usxcanada

28 January 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 Jan 27 – Godrey

Mike Godrey
US Treasury aims to lower FATCA burdens
Tax-News (27 Jan 2012)


Godrey reports on remarks made by Acting Assistant Secretary for Tax Policy, Emily McMahon about provisions for FATCA implementation being in “the final stages of clearance at the United States Treasury and the Internal Revenue Service (IRS).” McMahon traces FATCA measures to “a series of events in 2008 and 2009 involving very serious instances of offshore tax evasion” and U.S. government intention to cover “significant gaps [that] remained in the system.” Adjustments include (1) setting higher threshholds for reporting (2) use of existing provisions on money laundering and know-your-customer (3) expansion of categories of FFIs that are deemed compliant (4) exception for retirement plans (5) less immediate linkage responsibility attributed to affiliated institutions (6) seeking to use foreign governments as intermediaries for the required reporting.

Written by usxcanada

27 January 2012 at 6:00 am

2012 Jan 26 – Elias

Christopher Elias
Foreign Account Tax Compliance Act threatens investment in the U.S.
Reuters U.S. (26 Jan 2012)


This lengthy technical article delves into how “the combination of a wide definition of FFI and the scope of what is considered a U.S. ‘person’ places a substantial burden on foreign financial institutions to track, monitor and report U.S. foreign holdings.” Attention is focused on the implications of broken chains, passthru payments, derivatives, and conflicts of law. “Crossbridge, a London-based consultancy for the investment banking industry, estimated recently that compliance costs may be between US$150 million to $200 million for every medium sized bank.”

Written by usxcanada

26 January 2012 at 8:00 am

2012 Jan 26 – Hawkins

Lenore Hawkins
Americans renouncing citizenship over onerous tax code
Meritas Advisors (26 Jan 2012)


Hawkins lists specifics on the punitive nature of the current United States tax code with a link to video of her recent appearance on Fox network.

Written by usxcanada

26 January 2012 at 7:00 am

2012 Jan 26 – McKenna

Barrie McKenna
U.S. poised to soften offshore tax crackdown
Globe and Mail (26 Jan 2012) B4


“Concessions apparently include an extended phase-in period and a work-around of domestic privacy laws.” One option to meet privacy concerns may involve having a national government act as intermediary to “transmit information to the IRS.” Any measures to mitigate the impact of FATCA will have no effect on the reporting requirements still to be enforced against all expatriate US citizens.

Written by usxcanada

26 January 2012 at 6:00 am

2012 Jan 25 – Hilton

Anthony Hilton
US taxman is coming – and it will cost City dear
London Evening Standard (25 Jan 2012)


“As things stand, every major financial institution in the UK will have to strike an agreement with America’s Internal Revenue Service. … The cost for a large institution to instal systems that allow it to comply with this legislation is estimated at about £100 million.”

Written by usxcanada

25 January 2012 at 7:00 am

2012 Jan 25 – Tax Code

Tax code driving Americans to renounce citizenship
Fox Business (25 Jan 2012) 4:03


Fox-style discussion of recent citizenship renunciation figures.

Written by usxcanada

25 January 2012 at 6:00 am

2012 Jan 22 – Tompor

Susan Tompor
Some foreign accounts must be reported to IRS
Detroit Free Press (22 Jan 2012)


Michigan residents are warned that Canada is “offshore.” Coverage includes Form 8939, FBAR, and reopened OVDP.

Written by usxcanada

22 January 2012 at 6:00 am

2012 Jan 19 – McKenna

Barrie McKenna
Watchdog slams IRS for alienating expats
Globe and Mail (19 Jan 2012)


Criticisms of the IRS in the Taxpayer Advocate Service annual report for 2011 form the core of the story. “Devastating penalties and an over-complex international tax reporting regime” do not encourage compliance among expatriate filers. “New procedures to help dual citizens become compliant … along with other information for offshore filers, will be posted ‘within the next month’ on the IRS website, spokesman Dean Patterson said.”

Written by usxcanada

19 January 2012 at 7:00 am

2012 Jan 19 – Worst

Worst nightmare as IRS wants $550K in penalties over $4K tax bill
Investment News (19 Jan 2012)


The representative for the client in the headline case is “stalling” to see if the IRS will grant “more discretion to reduce the penalties for those remaining in the voluntary disclosure program.” To opt out of the program may trigger examination that entails unacceptable uncertainty and risk.

Written by usxcanada

19 January 2012 at 6:00 am

2012 Jan 18 – Cohn

Michael Cohn
Taxpayer Uncertainty Prompts Citizenship Renunciations
Accounting Today (18 Jan 2012)


“The increasing complexities of U.S. tax law are leading more people to renounce their citizenship.” Cohn discusses the 2011 annual report from Taxpayer Advocate Service. Tax lawyer Bob McKenzie regrets lack of a deadline in the latest program. “Even though clients may initially balk at the amount of money they will need to pay, he explains to them that if they are at high risk, receiving a letter from the IRS that the agency won’t prosecute them has a great deal of value.”

Written by usxcanada

18 January 2012 at 6:00 am

2012 Jan 17 – Leslie

Megan Leslie
Tax information session for US/Canadian dual citizens — hosted by Megan Leslie
Megan Leslie — NDP Member of Parliament, Halifax (17 Jan 2012)


Announcement of “an information session for constituents who were born in the United States and are now Canadian citizens” to be held at Dalhousie University in Halifax on 18 Jan 2012. Three panelists: immigration lawyer, tax consultant, chartered accountant.

Written by usxcanada

17 January 2012 at 7:00 am

2012 Jan 17 – McKenna

Barrie McKenna
The clock is ticking on filing with the IRS
Globe and Mail (17 Jan 2012)


“The 2011 tax year marks a pivotal decision point for expatriate Americans” because of (1) IRS promise to accommodate (2) “a new amnesty program” [continuation of 2011 OVDI with higher maximum penalty] (3) onerous new reporting required on Form 8938 (4) FATCA implementation in 2014. The main story concludes with summary of five options for response: just-cause defense, disclosure under OVDP, soft disclosure, do nothing, renounce citizenship. An appended piece by Sean Silcoff explores the perils of TFSA.

Written by usxcanada

16 January 2012 at 6:00 am

2012 Jan 11 – Dobby

Christine Dobby
Thinking of coming clean with the IRS? Read this
Financial Post (11 Jan 2012)


After a review of the current situation, with links, Dobby suggests four steps for persons “considering getting up to date with U.S. tax and foreign bank account filings”: (1) Obtain US identification number (2) File US tax returns (3) File foreign bank account reports (4) Consider seeking professional help. For a tax return alone, the IRS estimates “the average time burden for record keeping, tax planning and form completion at 22 hours.”

Written by usxcanada

11 January 2012 at 11:00 am

2012 Jan 11 – McKenna

Barrie McKenna
IRS attaches no deadline to amnesty program
Globe and Mail (10 Jan 2012)
[ Print: No deadline on new IRS amnesty program (11 Jan 2012) B7 ]


McKenna reports the IRS “has launched a permanent amnesty program” for Americans with offshore money — even though the IRS says it could cancel the program at any time. Penalties range to a new high of 27.5 percent, plus taxes owing, plus interest. “The IRS has also disclosed that it’s developing special procedures [for] delinquent filers.”

Written by usxcanada

11 January 2012 at 10:00 am

2012 Jan 11 – National

National Taxpayer Advocate battles IRS on terms of offshore voluntary disclosure program
IRS Tax Attorney [Blog] (11 Jan 2012)


A lengthy and technical account of how the Taxpayer Advocate has alleged “unfair treatment of certain participants” in 2009 OVDP.

Written by usxcanada

11 January 2012 at 9:00 am

Posted in Legal, Uncategorized

2012 Jan 11 – National

National Taxpayer Advocate delivers annual report to Congress
Taxpayer Advocate Service [U.S.] (11 Jan 2012)


The annual report “focuses on IRS funding and taxpayer rights.” The report addresses policy change under 2009 OVDP contravening “the IRS’s written pledge that ‘under no circumstances will a taxpayer be required to pay a penalty greater than what he would otherwise be liable for under existing statutes’.”

Written by usxcanada

11 January 2012 at 8:00 am

2012 Jan 11 – Sloan

Steven Sloan
IRS gives another chance to U.S. citizens with undeclared assets
Bloomberg Business Week (11 Jan 2012)


“In an attempt to encourage taxpayers to come forward soon, Shulman said the penalties might be increased further or the program ended at any point.”

Written by usxcanada

11 January 2012 at 7:00 am

2012 Jan 11 – Temkin

Jeremy Temkin
Offshore voluntary disclosure part III — yet another last chance for taxpayers
Forbes (11 Jan 2012)


Temkin provides an unusually detailed account of OVDI and its origins in the early 2000s. “Without the ‘stick’ of a genuine fear of detection, it is doubtful that the ‘carrot’ being offered by the IRS will lead many additional non-compliant accountholders to come forward.”

Written by usxcanada

11 January 2012 at 6:00 am

2012 Jan 10 – IRS Renews

I.R.S. Renews Disclosure Program for Offshore Assets
New York Times / Bloomberg News (10 Jan 2012) B6


This report provides many relevant quantitative figures and sets the program in brief historical context. “We’re gaining momentum in our international efforts, and the word is spreading across the globe,” IRS commissioner Douglas Shulman stated in a conference call on Jan 8.

Written by usxcanada

10 January 2012 at 7:00 am

2012 Jan 10 – Rettig

Charles Rettig
Déjà vu: yet another IRS FBAR voluntary disclosure initiative
Forbes [IRS Watch] (10 Jan 2012)


Summary history is provided for IRS disclosure programs going back to 2003. “The ability of a U.S. taxpayer to maintain an undisclosed, ‘secret’ foreign financial account is fast becoming nonexistent. Foreign account information is flowing into the IRS.” Information gathering relies on tax treaties, whistleblowers, linkages through disclosures, the new Form 8938, and the implementation of FATCA. “U.S. persons having interests in foreign financial accounts should not find comfort in a belief that their foreign financial institution will somehow refrain from disclosing very small accounts in the current enforcement environment.”

Written by usxcanada

10 January 2012 at 6:00 am

2012 Jan 9 – Berg

Roy A. Berg
IRS promises new procedure for taxpayers who haven’t filed but owe no tax and indefinitely extends Offshore Voluntary Disclosure (OVDI) Program
Moodys Tax Advisors [Blog] (9 Jan 2012)


Berg calls attention to IRS proclamation of “currently developing procedures” and speculates on possible IRS motivations.

Written by usxcanada

9 January 2012 at 9:00 am

Posted in Legal, Uncategorized

2012 January 9 – IRS

IRS offshore programs produce $4.4 billion to date for nation’s taxpayers; Offshore Voluntary Disclosure Program reopens
IRS (9 Jan 2012)


News release. Title says it all.

Written by usxcanada

9 January 2012 at 8:00 am

2012 Jan 9 – Saunders

Laura Saunders
IRS reopens limited amnesty for offshore accounts
Wall Street Journal [Blog] (9 Jan 2012)


According to IRS Commissioner Doug Shulman, more than 33,000 people came forward in the 2009 and 2011 programs, resulting in collection so far of $4.4 billion. “The new confession program is similar to that for 2011, except that the highest penalty is greater: 27.5 % of the highest aggregate balance in the undeclared foreign accounts or entities during the eight full tax years before the taxpayer stepped forward.”

Written by usxcanada

9 January 2012 at 7:00 am

2012 Jan 9 – Wood

Robert W. Wood
New IRS offshore amnesty announced: third time’s a charm
Forbes (9 Jan 2012)


“This third offshore program will be open indefinitely.” Tax lawyer Wood lists seven points to outline what he sees as new.

Written by usxcanada

9 January 2012 at 6:00 am

2012 Jan 8 – Spiro

Peter Spiro
FATCA Fallout: Mass Renunciations?
Opinio Juris (8 Jan 2012)


If you have permanently relocated … US citizenship doesn’t do you much good. In the past, it didn’t do you much harm, either, but now it poses some significant costs. … So rational Americans abroad might just ditch the citizenship.”

Written by usxcanada

8 January 2012 at 6:00 am

Posted in Academic, Uncategorized

2012 Jan 7 – Dutchmen

Dutchmen grounded: dual citizenship
Economist (7 Jan 2012)


The Dutch government is atypically proposing a new law (1) to limit dual nationality among immigrants (2) to make it easier for authorities to strip nationality from Dutch who acquire other citizenships. Openness to multiple citizenship is relatively recent, partly because dual nationality has become harder to control. An historical perspective reaches back to 1849. Reference is made to the practice of many different countries. “In large parts of the world, especially in poorer and more dictatorial countries, dual nationals remain anathema.”

Written by usxcanada

7 January 2012 at 6:00 am

2012 Jan 7 – In Praise

In praise of a second (or third) passport
Economist (7 Jan 2012)


“America’s policy of taxing its citizens wherever they live seems especially perverse; it is an accountants’ charter.”

Written by usxcanada

7 January 2012 at 6:00 am

2012 Jan 6 – Poe

Curtis Poe
Renouncing your citizenship
Overseas Exile [Blog] (6 Jan 2012)


“I’m seeing more Americans on expat boards, Facebook expat groups and other places openly discussing renunciation.” Brief account of context with key points.

Written by usxcanada

6 January 2012 at 7:00 am

2012 Jan 6 – Wood

Robert W. Wood
Are expats derailing the FATCA express?
Forbes (6 Jan 2012)


Tax lawyer Wood provides multiple links to other sources. “Of all the groups gaining traction over this mess, the subset of expats living in Canada — many with dual U.S. and Canadian citizenship — has seemed the most blindsided.”

Written by usxcanada

6 January 2012 at 6:00 am

2012 Jan 4 – Tax-haven

Tax-haven wars: editorial
Washington Times (4 Jan 2012)


“Astronomical” cost of compliance with FATCA make it “increasingly difficult [for Americans] to access banking services overseas. … As the U.S. environment becomes more hostile and rapacious, financial transactions will move to more open markets.”

Written by usxcanada

4 January 2012 at 6:00 am

2012 Jan 3 – Fallows

James Fallows
The FATCA chronicles: tales from China, Canada, and Estonia
Atlantic (3 Jan 2012)


Lengthy extracts from correspondence with Americans in China (problems of joint accounts and joint business ventures), Canada (uncertainties and inconsistencies of US citizenship policy), Estonia (self-employed, US compliant, “under the radar” in Estonia to avoid overall tax liability of 70%).

Written by usxcanada

3 January 2012 at 8:00 am

2012 Jan 3 – Kieran

Brian Kieran
U.S.-born Campbell River senior fears Uncle Sam’s tax wrath
Campbell River Mirror (3 Jan 2012)


An unnamed resident of Campbell River BC, male aged 65, Canadian citizen for 40 years, views IRS policy as entrapment “smokescreen.” He fears travel to US to visit family. “Once I showed my Canadian passport at the border and the U.S. border guard told me ‘you are a U.S. citizen until we tell you you’re not’.”

Written by usxcanada

3 January 2012 at 7:00 am

2012 Jan 3 – McGurn

William McGurn
Washington’s assault on American expats
Wall Street Journal (Online) (3 Jan 2012)


“The U.S. is the only developed nation in the world that taxes its citizens on income they earn abroad.”   “Our tax code appears to rest on the assumption that the American expat is a criminal and must be treated that way.”   U.S. disregard for its expatriate citizens fails to recognize their value as “the human counterpart to the social [web] sites.”

Written by usxcanada

3 January 2012 at 6:00 am

2012 Jan 2 – Fallows

James Fallows
The FATCA menace!
Atlantic (2 Jan 2012)


Lengthy extracts from correspondence with Americans in Sweden (required reporting includes “life insurance policies, telephone prepaid cards, my customer card at the supermarket and my lunch card at work”), Canada (attention drawn to new Isaac Brock Society), Germany (citizenship renounced in order to have a bank account), Washington DC (a Congressional staffer who presumes that very few are affected).

Written by usxcanada

2 January 2012 at 7:00 am

2012 Jan 2 – Northrup

Doug Northrup
Hopes dashed for U.S. tax reprieve
Times & Transcript [New Brunswick] (2 Jan 2012) C2


“Based on our experience of U.S. clients catching up on U.S. tax filing, the IRS is accepting multiple years of filings without assessing penalties. And when a client has been assessed a penalty, appeals have been successful in the majority of cases. However, this does not mean the IRS will continue this practice.” [Tax Talk is a weekly column prepared by Doug Northrup, a master tax professional]

Written by usxcanada

2 January 2012 at 6:00 am