U.S. Citizens in Canada InfoShop

Archive for January 2013

2013 Jan 31 – Townsend

Jack Townsend
Warnings on continued government patience for offshore account ostriches
Federal Tax Crimes (31 Jan 2013)


Townsend extracts from and comments on an article from Tax Notes Today which reports that Kathy Keneally (Assistant Attorney General for the Tax Division) “has warned that amnesty for offshore account evasion will not last forever. … Persons with offshore accounts who continue their noncompliance are indeed dumb.”

Written by usxcanada

31 January 2013 at 7:00 am

2013 Jan 31 – Bachmann

Helena Bachmann
Mister Taxman: why some Americans working abroad are ditching their citizenships
Time World (31 Jan 2013)


Tina Turner’s recent abandonment of U.S. citizenship sets the stage for this article. The sharp increase in renunciation is foregrounded. FATCA gets two paragraphs. Aspects of individual stories are provided for three individuals who have already made the news: Peter Dunn in Canada, Genette Eysselinck in France, Amy Webster in Switzerland.

Written by usxcanada

31 January 2013 at 6:00 am

2013 Jan 29 – Wallace

Ellen Wallace
Packing up, going home: one US citizen in Switzerland vents his anger
Geneva Lunch (29 Jan 2013)


Swiss resident William Olenik publishes an email about his plan to move back to the United States because of the untenable status being imposed on U.S. persons living abroad. Comment — Olenik reaps the harvest of this bonehead attitude: “I refuse to give up my citizenship, as I am 100% American, to my bone marrow.” It sounds like he really does belong back in the homeland.

Written by usxcanada

29 January 2013 at 6:00 am

2013 Jan 28 – Feldman

Amy Feldman
The perils of overseas tax disclosure: an immigrant’s story
Reuters U.S. (28 Jan 2013)


Andrew Winfield, a British immigrant to the United States, entered OVDI 2011, filed amended returns for 2003-2010 to cover foreign accounts, paid an additional $2800 in tax, and now faces FBAR penalties of $28,000. According to Feldman, there are “some 39 million immigrants in the United States.” Annual FBAR filing is said to run at a level of 500,000.

Written by usxcanada

28 January 2013 at 6:00 am

2013 Jan 25 – Allentuck

Andrew Allentuck
Dual Canadian-U.S. citizens can conquer tax challenges
Financial Post (25 Jan 2013)


A Toronto family with income of up to $218,000 per year is said to face no serious problems in remaining compliant with two tax systems. The fatuous closing sentence says of the primary wage earner: “In the end, careful observance of rules of both countries will keep his tax bill to no more than what it would be in Canada without exposure to American taxes.” RESPs are mentioned, but not the excessively burdensome and expensive reporting requirements. Despite the couple’s intention to remain in Canada, no mention is made of their perhaps considering renunciation of U.S. citizenship.

Written by usxcanada

25 January 2013 at 6:00 am

2013 Jan 20 – Christians

Allison Christians
Why FATCA is a tax treaty override
Tax, Society & Culture (20 Jan 2013)


“FATCA overrides the existing [Canada-U.S.] tax treaty by significantly limiting a material benefit thereunder, and the only valid way to fix that override is to change the treaty itself, by entering into a new protocol.”

Written by usxcanada

20 January 2013 at 6:00 am

Posted in Legal, Uncategorized

2013 Jan 17 – Cohn

Michael Cohn
Treasury releases final FATCA regulations to fight offshore tax evasion
Accounting Today (17 Jan 2013)


“A long-awaited set of final regulations [will have] far-reaching implications for U.S.-born taxpayers abroad.” Much of this article seems to embed the Treasury/IRS press release, with added history and context.

Written by usxcanada

17 January 2013 at 8:00 am

2013 Jan 17 – Foreign

Foreign financial institutions given reprieves in US, sort of …
Thailand: The Nation (17 Jan 2013)


Interim IRS announcements “only alleviate the immediate panic based on the unrealistic mid-2013 deadlines. … The IRS has also only engaged with a limited number of countries, leaving FFIs in all other jurisdictions to fend for themselves in establishing a direct relationship with the US tax agency. … What was a mild sense of panic has now been reduced to a sense of futility mixed with the recognition that FFIs need immediately to initiate their Fatca programmes if they want to have the on-boarding processes in place and signed off in time to meet the new deadline of December 31, 2013.”

Written by usxcanada

17 January 2013 at 7:00 am

2013 Jan 17 – Treasury

Treasury and IRS issue final regulations to combat offshore tax evasion
U.S. Dept. of the Treasury (17 Jan 2013)


“The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today issued comprehensive final regulations implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA).” A filing version 544 page pdf of the regulations (publication scheduled for 28 Jan 2013) can be found at https://www.federalregister.gov/articles/2013/01/28/2013-01025/information-reporting-by-foreign-financial-institutions-and-withholding-on-certain-payments-to.

Written by usxcanada

17 January 2013 at 6:00 am

2013 Jan 16 – Green

Nigel Green
Foreign banks rejoice: overreaching U.S. tax law in trouble
American Banker (16 Jan 2013)

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Green cites “two clear reasons” for his belief that FATCA implementation could well fail: (1) Dept. of Treasury has failed to meet two of its own deadlines — September 2012 and end of 2012 (2) “only the U.K., Denmark, Ireland and Mexico, plus a handful of British crown dependencies, have signed FATCA’s required Intergovernmental Agreement.”

Written by usxcanada

16 January 2013 at 7:00 am

2013 Jan 16 – Jacoby

Erich Jacoby-Hawkins
American FATCA punishes law-abiding Canadians
Barrie Examiner (16 Jan 2013)


An op-ed rattles a Canadian saber and mentions two bad-match-up tax situations for U.S. persons in Canada: capital gain on principal residence, and TFSA/RESP/RDSP.

Written by usxcanada

16 January 2013 at 6:00 am

2013 Jan 15 – McKenna

Barrie McKenna
U.S. expats in Canada face new Obamacare health care tax
Globe and Mail (15 Jan 2013)


The new 2013 tax on investment income of 3.8% for wealthier U.S. extraterritorials may vitiate the supposed relief (strangely described as an “amnesty”) provided in 2012 by a special “streamlined” IRS program for previous nonfilers. Higher U.S. income tax rates, intergovernmental tax information sharing, and steep penalties pose further legal and financial hazards. McKenna quotes four different tax law and accounting professionals who stand to profit from generating fears. Consequently, this poor excuse for journalism amounts to a single-source infomercial for this class of “professionals.” In Kevyn Nightingale’s estimation, “tens of thousands of Americans living in Canada could be affected.”

Written by usxcanada

15 January 2013 at 6:00 am

2013 Jan 14 – Rozeboom

Bill Rozeboom
Featured letter: Canadian tax shelters offer no refuge from Uncle Sam
Edmonton Journal (14 Jan 2013)

Original link:

Additional link:

This substantial and well-written letter details the difficulties that TFSAs and RESPs pose for extraterritorial U.S. persons. Conclusion: “Canada is unlikely to influence the way the U.S. treats its citizens abroad, but the Canadian government should not be complicit in making life miserable for any of its law-abiding dual-citizen residents.”

Written by usxcanada

14 January 2013 at 6:00 am

2013 Jan 12 – Golombek

Jamie Golombek
Obamacare could cost some Canadians a lot of money
Financial Post (12 Jan 2013)


As of 2013, U.S. persons in Canada who exceed a defined income threshold will face “a 3.8% surtax on net investment income, including interest, dividends and capital gains” to support Obama’s new federal health coverage plan.

Written by usxcanada

12 January 2013 at 6:00 am

2013 Jan 7 – Gifford

James Gifford
2013 — The fiscal cliff, Obamacare, and maybe even US tax reform
Moodys Tax Advisors (7 Jan 2013)


Tax lawyer James Gifford says: “Foreign taxes most likely will not be creditable against the 3.8% Obamacare tax on net investment income. … At this time it is unclear whether the Income Tax Treaty between the US and Canada, which strives to eliminate the double taxation of income, will apply.” Threshold is “based on adjusted gross income plus the amount of any foreign earned income exclusion” [emphasis added]. The lowest threshold is $125,000 for married filing separately. In the broader picture, “dramatic changes in the US tax landscape that have occurred since 2008 are finally crystalizing into … a policy framework for ordinary Americans living abroad to get and stay compliant, with the FATCA rules making foreign governments and banks assist the IRS.”

Written by usxcanada

7 January 2013 at 9:00 am

2013 Jan 7 – Land

The land of the free? The US FATCA law will likely affect both Americans in Thailand and financial institutions that deal with any Americans
Bangkok Post (7 Jan 2013)


This longer article covers a lot of standard facets of the topic from a Thailand perspective. Jonathan Blaine of KPMG Thailand says: “”KPMG expects most banks in Thailand will comply with FATCA, but that doesn’t mean they won’t throw their American clients out.”

Written by usxcanada

7 January 2013 at 8:00 am

2013 Jan 7 – Nightingale

Kevyn Nightingale
New US investment income tax
mnptax.ca (7 Jan 2013)


A Toronto CPA specializing in expatriate taxation warns that U.S. citizens in Canada may, as of 2013, be subject to a new 3.8% taxation of investment income (interest, dividends, capital gains, annuities, and rents), tax that cannot be offset by Canadian income taxes paid. The lowest tripwire for such taxation seems to be at the level of total annual income of $125,000 for married filing separately.

Written by usxcanada

7 January 2013 at 7:00 am

2013 Jan 7 – Whiteley

Don Whiteley
IRS wants Canada to nab U.S. tax cheats: Why we should care
Globe and Mail (7 Jan 2013)


Whitely calls attention to current behind-the-scenes negotiations about how Canada will bow to the U.S. FATCA imperative. FATCA itself is characterized as “the most egregious example of extra-territorial reach the U.S. has ever attempted.” Whitely asserts of the Harper government: “The plan is not to bring the details of such an agreement before Parliament.” The article ends by dangling the question of how the Canadian government can reach a deal that satisfies the United States without violating the Canadian Charter of Rights and Freedoms.

Written by usxcanada

7 January 2013 at 6:00 am

2013 Jan 4 – Francis

Diane Francis
Canada take note: America’s tax system is messy but good
HuffPost (4 Jan 2013)


Dual citizen Francis uses her “expensive perch” to claim a “unique perspective” that the U.S. system of “checks and balances” has just now become operational — despite “a big fiscal mess, due to panic over 9/11, the 2008 debacle and unjustifiable tax cuts and wars paid for with a national credit card.” Meanwhile, Canadians are judged to “pay higher taxes because there are no checks and balances.” Comment: It is a pleasure to think that a person with this narrow tax-focused mindset will continue to be subjected to the highest taxation going in either of the two systems, together with the costs and uncertainties and risks of compliance with U.S. filing requirements.

Written by usxcanada

4 January 2013 at 6:00 am

2013 Jan 2 – Smith

Ralph Smith
Taxes and American citizenship
FedSmith.com (2 Jan 2013)


A former U.S. federal civil servant bluntly assesses expatriation and the U.S. exit tax at some length with multiple links to other accounts.

Written by usxcanada

2 January 2013 at 6:00 am

2013 Jan 1 – Thomas

Cal Thomas
How much is it worth to be a U.S. citizen? Tax laws make it hard for expatriates to justify keeping an American passport
Baltimore Sun (1 Jan 2013)


Thomas tells the story of anonymized Sam, a Hong Kong resident who felt financially forced to abandon US citizenship. Details of the burden of asymmetry include confiscatory taxation of 14 years of pension savings. Sam says: “I had paid over $1 million in U.S. taxes but didn’t receive any benefits, nor did my wife and kids.”

Written by usxcanada

1 January 2013 at 6:00 am