Archive for June 2012
New IRS rules for disclosure of foreign assets
Reuters U.S. (29 June 2012)
A competent but uncritical rehash of the new IRS rules. How those rules will “help distinguish between true tax cheats and American citizens abroad” remains far less clear than this article proposes.
Roy A. Berg
IRS offers partial tax amnesty for Canadians with “low compliance risk,” though questions remain
Moody’s Tax Advisors (28 June 2012)
“The terms of the new procedures, and the determination of who may qualify make it unclear as to the actual number of Canadians who may be able to qualify.”
U.S. taxman finally eases pressure on American citizens in Canada
Vancouver Sun (28 June 2012)
Cayo makes clear that the new IRS announcement leaves much uncertainty in its wake. Comment from two tax specialists indicates that IRS tough talk already has been accompanied by some restraint in exacting penalties. Many Canadian residents will still face difficulties. Those “onerous filing obligations” remain in place for all US persons.
Finance Minister applauds U.S. government decision to help dual citizens with their foreign tax obligations
Department of Finance Canada (27 June 2012)
“I am happy the U.S. government has listened to our concerns,” says Jim Flaherty, Minister of Finance.
Comment: Too much praise. Partial and uncertain mitigation of some of the concerns.
IRS announces efforts to help U. S. citizens overseas including dual citizens and those with foreign retirement plans
IRS (26 June 2012)
IRS announces new procedures effective 1 September 2012 to (1) “Allow taxpayers who are low compliance risks to get current with their tax requirements without facing penalties or additional enforcement action” (simple tax returns owing $1,500 or less in tax for any of the covered years) (2) “Allow resolution of certain issues related to certain foreign retirement plans (such as Canadian Registered Retirement Savings Plans).” The basic requirement is “to file delinquent tax returns along with appropriate related information returns for the past three years, and to file delinquent FBARs for the past six years.”
Comment: This “help” with compliance could cost many affected individuals thousands of dollars for the specialized paperwork required to demonstrate that no tax is owing.
IRS says offshore effort tops $5 billion, announces new details on the voluntary disclosure program and closing of offshore loophole
IRS (26 June 2012)
IRS Commissioner Shulman updates on OVDI income and disclosures, reporting “the collection of more than $5 billion in back taxes, interest and penalties from 33,000 voluntary disclosures made under the first two programs. In addition, another 1,500 disclosures have been made under the new program announced in January.”
Tax amnesty offered to Americans in Canada
Globe and Mail (26 June 2012)
The first part of the article retails material from the IRS news release. The reporter’s use of derogatory innuendo — “to come clean” — is highly offensive. A Toronto “professional” who stands to profit guesses that “about 90 per cent of Americans in Canada … will fall into the low risk category” and qualify for participation. According to McKenna, “U.S. officials have struggled internally over whether people who haven’t filed for years deserve any special leniency.” The situation of an unnamed “56-year-old Ottawa woman who has lived in Canada since her family moved here when she was nine” is outlined.