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Archive for the ‘Legal’ Category

2014 April 10 – Cockfield

Arthur Cockfield / Allison Christians
How the U.S. pulled off the great Canadian privacy giveaway
Globe and Mail (10 Apr 2014)


Two Canadian law professors succinctly outline unprecedented FATCA giveaway of Canadian sovereignty to the United States. They propose: “Canada should only transfer data associated with U.S. persons who are not Canadian residents.”

Written by usxcanada

10 April 2014 at 6:00 am

Posted in Canada, Legal, Uncategorized

2014 Apr 1 – Berg

Roy A. Berg / Kim G.C. Moody
Leaked guidance notes threaten to invalidate Canada’s FATCA
STEP Resources (1 Apr 2014)


“Canada’s legislation and leaked guidance notes threaten to invalidate the IGA and cast certain Canadian entities, including private trusts, out of the walled garden of the IGA and into the inky blackness of FATCA.”

Written by usxcanada

1 April 2014 at 6:00 am

Posted in Legal, Uncategorized

2014 Mar 10 – Jeker

Virginia La Torre Jeker
The tax non-compliant American abroad: what are your choices?
Angloinfo (10 Mar 2014)


“The typical client I assist owes little, or no tax after taking into account foreign tax credits and foreign earned income and housing exclusion amounts … [but] is potentially subject to huge penalties.” Options are outlined: voluntary disclosure, quiet disclosure, streamlined procedure. Specific comment also focuses on high/low risk classifications and what qualifies as “reasonable cause”

Written by usxcanada

10 March 2014 at 7:00 am

Posted in Legal, Uncategorized

2014 Mar 10 – Melnitzer

Julius Melnitzer
Canada’s draft legislation undermines FATCA agreement with U.S.
Financial Post (10 Mar 2014)


Tax lawyer Roy Berg of Calgary’s Moodys Gartner Tax Law warns that Canada’s intended implementation of FATCA legislation may prove invalid because of definition of “financial institutions.”

Written by usxcanada

10 March 2014 at 6:00 am

Posted in Canada, Legal, Uncategorized

2013 Nov 25 – Berg

Roy A. Berg
Canadian snowbirds beware! Border crossing rules for 2014 increase stakes for “day count”
Moodys Gartner (25 Nov 2013)


On 30 June 2014 new procedures will lead to precise days-of-residence counts available to both Canada and the United States. Snowbirds may encounter undesirable tax consequences.

Written by usxcanada

25 November 2013 at 6:00 am

Posted in Canada, Legal, Uncategorized

2013 Aug # – Nightingale

Kevyn Nightingale / David Turchen
The US implications of a tax free savings account
Wealth Management Times no. 77 (Aug 2013)


31 footnotes. “Most of the larger accounting firms are taking the conservative position that a TFSA is not treaty-protected. … The IRS has not pronounced on this question, and the issue has not yet been litigated.” [This article first appeared in the CCH newsletter Tax Topics No. 2146 (April 25, 2013).]

Written by usxcanada

1 August 2013 at 6:00 am

2013 July 4 – Marino

Alexander Marino
Renouncing your US citizenship: failed amendment may signal that now is the time to get out!
Moodys Gartner (4 July 2013)


14 footnotes. Recent failed legislative attempt to bar “covered” expatriates from entering the United States indicates that “the issue of renouncing one’s US citizenship is again front and center on Congress’s radar and the only guarantee moving forward is that any potential changes will not make things any easier to get out.”

Written by usxcanada

4 July 2013 at 6:00 am

2013 Apr 22 – Reed

Max Reed
The ticking time bomb of tax liability for Americans in Canada
Canadian Lawyer (22 Apr 2013)


Eventually FATCA will affect most of the one million or so noncompliant US persons resident in Canada, who remain ” blissfully unaware of the ticking time bomb of U.S. tax liability.” Reed is co-author with Dick Pound of Tax Guide for American Citizens in Canada.

Written by usxcanada

22 April 2013 at 6:00 am

2013 Apr 4 – New

New US tax law may negatively affect Canadian retirement plans
Moodys Tax Advisors (4 Apr 2013)


Unless proposed regulations are changed a new 3.8% US taxation will likely apply to RRSPs, CPP, and other pension income — with no opportunity for tax credit offset.

Written by usxcanada

4 April 2013 at 6:00 am

Posted in Canada, Legal, Uncategorized

2013 Mar 19 – Marino

Alexander Marino
Renouncing your U.S. citizenship: Is divorcing Uncle Sam right for you?
Moodys Tax Advisors (19 Mar 2013)


[40 footnotes] This summary of renunciation considerations pulls together a variety of aspects and is worth a read. Bear in mind that the writer and his outfit want to generate revenue from “assisting” you. Once the tax aspects are understood, the process of obtaining severance from the United States usually should not require “professional” services. Cast a cautious and jaundiced eye on the listing of US citizenship “benefits” in Section B. The only one of substance seems to be (d), the dubious “freedom” to seek employment in the United States.

Written by usxcanada

19 March 2013 at 6:00 am

Posted in Legal, Uncategorized

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 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

2012 Oct 7 – Berg

Roy A. Berg
Do not get out of IRS’s tax amnesty programs without knowing the facts
Moodys Tax Advisors (7 Oct 2012)


The relationship of existing voluntary disclosure programs to “the new streamlined procedure” is explored at length.

Written by usxcanada

7 October 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 Oct 1 – Schneider

Bernard Schneider
The end of taxation without end: a new tax regime for U.S. expatriates
Virginia Tax Review 32:1 (1 Oct 2012) 1-76


Among other things, this comprehensive article with 392 footnotes will serve as a bibliography to previous literature on the topic. Schneider concludes that the obvious resolution, cessation of extraterritorial taxation of U.S. person, is not “politically viable,” and then moves to propose an exit tax. Review of the existing situation covers (1) history of citizenship-based taxation (2) numbers of persons affected and tax involved (3) types of expatriates (4) current tax treatment of nonresidents (5) increasing compliance cost of being a U.S. taxpayer abroad (6) arguments for and against worldwide taxation of expatriates (7) compliance and enforcement (8) current exit tax regime.

Written by usxcanada

1 October 2012 at 6:00 am

2012 Sept 7 – Berg

Roy A. Berg / James Gifford
Do you qualify for IRS’s new streamlined procedure to bring US tax returns current?
Moodys Tax Advisors (7 Sept 2012)


Extensive analysis of the IRS instructions of 31 August 2012 leads to this basic conclusion: “There is great uncertainty as to who will qualify for the procedure and the questions asked in the questionnaire pose serious risks to the uninformed taxpayer.”

Written by usxcanada

7 September 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 Sept 1 – Townsend

Jack Townsend
IRS instructions for streamlined procedure for U.S. nonresidents
Federal Tax Crimes [blog] (1 Sept 2012)


Lawyer Jack Townsend’s relative brief and well-informed comment sees the newly announced IRS provisions for US nonresidents as likely to find very limited take-up because of compliance cost and unresolved applicant uncertainty. One category that may benefit are otherwise compliant Canadian residents who wish to rectify previous Form 8891 noncompliance (RRSP treaty election to defer income).

Written by usxcanada

1 September 2012 at 7:00 am

Posted in Legal, Uncategorized

2012 Aug 29 – Moody

Kim G.C. Moody / Roy A. Berg
Tax in Canada and the US: the differences that really matter
Moodys Tax Advisors (29 Aug 2012)


The authors highlight seven separate points as key differences:  (1)  Taxation of individuals  (2)  Estate tax  (3)  Corporate taxation  (4)  Foreign reporting requirements  (5)  Double taxation  (6)  Variations in exit/departure tax  (7)  Status of paid tax preparers. Item 5 provides a link to another essential posting of theirs that has continuing value (and so is featured in the selective reading list appended to the Start Here section). Item 7 provides the fact that “according to the IRS there are only 2,392 such [qualified] individuals in all of Canada.”

Written by usxcanada

29 August 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 Aug 22 – Berg

Roy A. Berg
IRS says FBAR penalties not collectible under Canada-US Treaty?
Moodys Tax Advisors (22 Aug 2012)


Canadian tax professionals pursue verification of Canadian government claims that IRS had confirmed that FBAR penalties would lie outside the scope of the Canada-US treaty — and find no supporting evidence.

Written by usxcanada

22 August 2012 at 6:00 am

Posted in Canada, Legal, Uncategorized

2012 Aug 16 – Current

Current relinquishment cases in Canada demonstrate the need for guidance
Flott & Co (16 Aug 2012)


A law firm specializing in United States citizenship issues describes two Canadian cases where US officials seemed less than clear and efficient in handling relinquishments.

Written by usxcanada

16 August 2012 at 6:00 am

Posted in Canada, Legal, Uncategorized

2012 July 9 – Mopsick

Steven J. Mopsick
Tax justice for Americans abroad
Tax Notes (9 July 2012) 189-196


A federal tax attorney with long experience within the IRS details the problems currently faced by U.S. persons living outside the United States. He usefully categorizes the options — “few good”! — available to “those with reasonable cause arguments” and reduces them from an apparent six to three that he sees as “realistically viable.” He illustrates difficulties with a substantial hypothetical case study of an extended family that has generations of history in Vancouver, British Columbia. “Responsible people in the government must see the absurdity of how citizenship-based taxation affects expatriates and the bizarre fact that the United States is the only country that taxes its citizens on their worldwide income.” Mopsick proposes a “facts and circumstances test” as a potentially useful “commensense approach” (p. 193), but irrationally persists in privileging the fact of birth abroad in designating persons who have had “no meaningful economic connection to the United States” over a period of many years. [14 footnotes]

Written by usxcanada

9 July 2012 at 6:00 am

2012 July 3 – Krishna

Vern Krishna
An unnecessary overreaching of U.S. tax law into Canada
Financial Post (3 July 2012)


A Canadian tax lawyer offers a commendably critical assessment of recent moves by U.S. taxation and reporting authorities. “In light of the galloping U.S. deficit, however, the IRS has awakened and is hunting for tax dollars under every rock to finance its government’s profligate spending. Canadian-Americans are now in the IRS’s headlights.” The article touches on the nature of U.S. taxation, the border-passport factor, the uncertainty of “reasonable cause,” the latest IRS policy adjustment, the implementation of FATCA, and the convolutions of citizenship renunciation.

Written by usxcanada

3 July 2012 at 6:00 am

2012 July 1 – Marlin

Megan Marlin / Kevin Curran
Homeland Security may contact U.S. persons living abroad who owe back taxes
Tax Adviser (1 July 2012)


“A U.S. or non-U.S. person whom the IRS has been unable to contact may be unaware of an assessed but unpaid federal tax liability until the person goes through U.S. Customs and is detained by Immigration and Customs Enforcement.”

Written by usxcanada

1 July 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 June 28 – Berg

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.”

Written by usxcanada

28 June 2012 at 7:00 am

Posted in Canada, Legal, Uncategorized

2012 June 23 – Tharp

Paul Tharp
US citizens leaving the country to avoid stiff tax bills
New York Post (23 June 2012)


Tharp reports interestingly high figures for renunciation — “As many as 8,000 US citizens are projected by immigration officials to renounce in 2012, or about 154 a week, versus 3,805 in 2011, or about 73 per week” — as “startling new data from Uncle Sam,” but a more specific data source is not provided. Most of the article is built on comment from “Jim Duggan, a lawyer at Duggan Bertsch, which specializes in protecting assets of the wealthy.” Duggan identifies “popular spots” for wealth expatriation as Australia, Norway, Singapore, Cayman Islands, Costa Rica, Guernsey and Antigua. Canada not included!

Written by usxcanada

23 June 2012 at 6:00 am

2012 June 5 – Hodgen

Phil Hodgen
Why people expatriate
Hodgen Law [blog] (5 June 2012)


Tax and expatriation lawyer Phil Hodgen operates at the eye of the storm. This lengthy summation amounts to a very useful mini-manual on expatriation from the United States. As a forecaster, Hodgen says: “Political signals from the United States show that expatriation and tax policies are likely to get harsher. … The cost of expatriation now is less than the expected future cost of expatriation. Better to take the medicine now rather than later. … Expect the same exit tax rules, but more of them, and worse. Expect more expatriations. … Get out while the getting is semi-good. Don’t wait for more time. More time means more laws.”

Written by usxcanada

5 June 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 May 16 – Scott

Kevin Scott
US expatriates urged to seek tax advice
Gulf News (16 May 2012)


Dateline Dubai. Much of the content derives from “Dubai-based tax specialist” lawyer Virginia La Torre Jeker. Coverage includes FATCA, Form 8938, and renunciation. “According to Jeker, claiming ignorance of US tax obligations will not be deemed a sufficient excuse to avoid penalties as Fatca has been well publicised in recent months.”

Written by usxcanada

16 May 2012 at 6:00 am

2012 May # – Sheppard

Hale E. Sheppard
The new duty to report foreign financial assets on Form 8938: demystifying the complex rules and severe consequences of noncompliance
International Tax Journal 38:3 (May-June 2012) 11-32

http://www.chamberlainlaw.com/assets/attachments/Form 8938 Article.pdf

“Confusion about Code Sec. 6038D and Form 8938 can trigger a series of negative results for taxpayers, including new information-reporting penalties, increased accuracy-related penalties, criminal charges, extended assessment periods, and a fight with the U.S. government on three fronts simultaneously.” [160 endnotes]

Written by usxcanada

1 May 2012 at 5:00 am

2012 Apr 2 – Johnston

Nigel Johnston
More on FATCA … and more to come: the Internal Revenue Service and Treasury Department release proposed regulations
McCarthy Tetrault (2 Apr 2012)


The introduction closes with a useful summary of “ongoing discussions between Canada and the United States relating to the application of FATCA.” The broad scope description of FATCA includes a five-point summary of how a “foreign financial institution” must relate to a “US person.”

Written by usxcanada

2 April 2012 at 6:00 am

Posted in Legal, Uncategorized

2012 Feb 2 – Kennedy

Patrick F. Kennedy
Schedule of fees for consular services, Department of State and overseas embassies and consulates
U.S. Federal Register — Rules and Regulations 77:22 (2 Feb 2012) 5177-5178


“The Department [of State] has decided that the renunciant should pay this fee at the visit during which he or she swears the oath of renunciation.” The Notice itself is dated 23 Jan 2012.

Written by usxcanada

2 February 2012 at 7:00 am

2012 Feb 2 – Mitchel

Andrew Mitchel
Number of expatriates for 2011
International Tax Blog (2 Feb 2012)


Mitchel reports on data just released through the Federal Register. “In 2011, the total number of expatriates was 1,781, a 16% increase from 2010.” Includes two charts.

Written by usxcanada

2 February 2012 at 6:00 am

Posted in Legal, Uncategorized

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 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 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

2011 Oct 17 – Michel

Scott D. Michel / Mark E. Matthews
OVDI is over — What’s next for voluntary disclosures?
Tax Notes 133 (17 Oct 2011) 369-378


“The essence of OVDI was to leverage a civil penalties deal into the VDP.” In the OVDI programs, “stereotypical offshore tax cheats” were few in number. A large group in OVDI 2009 had accounts gifted by or inherited from parents or other relatives. A large group in OVDI 2011 had lived abroad for many years, had routine foreign financial accounts, and complied with taxation in country of residence. Unwillingness to become US tax compliant manifests “most dramatically in Canada, with its hundreds of thousands of U.S. citizens.” [Footnote 5 details a “significant increase” in persons seeking to expatriate.] The article closes with eight specific recommendations for future disclosure, and recognizes that implementation of FATCA may render the issue irrelevant. Nine footnotes.

Written by usxcanada

17 October 2011 at 6:00 am

2011 Sept # – Ward

Robert E. Ward
Advising US citizens and long-term residents on expatriating
STEP journal (Sept 2011)


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.

Written by usxcanada

1 September 2011 at 5:00 am

2011 July 22 – Rubinstein

Asher Rubinstein
Standing up to IRS “bait and switch” tactics
Rubinstein and Rubinstein (22 July 2011)


“Suddenly, two years into the [2009] OVDP process, the IRS changed the very terms by which it attracted taxpayers to come forward and disclose their foreign accounts and declared that change to be retroactive.”

Written by usxcanada

22 July 2011 at 6:00 am

Posted in Legal, Uncategorized

2011 July # – Bernstein

Jack Bernstein
Tax tsunami for non-U.S. tax compliant Canadian residents who are U.S. citizens or green card holders
Tax profile [0827-3677] 28:7 (July 2011) 1-3


A succinct and authoritative account of tax compliance issues faced by Canadian residents, published by Commerce Clearing House Canadian.

Written by usxcanada

1 July 2011 at 6:00 am

2011 June 16 – Rampell

Catherine Rampell / Andrew Mitchel
More (wealthy) Americans are renouncing citizenship
Economix — New York Times [Blog] (16 June 2011)


A chart showing quarterly renunciations by US citizens 2004-2011 prepared by tax attorney Andrew Mitchel is accompanied by text from his email pointing to “two technical tax-related changes [that] inspired more people to give up their citizenship”: a 2008 change in expatriation rules that eliminated a ten-year filing requirement; complexity and penalties that have “caused many individuals with dual citizenship to conclude that their U.S. citizenship is not worth the stress and hassle of the U.S. tax filing rules.”

Written by usxcanada

16 June 2011 at 6:00 am

2010 Apr 12 – Bissell

Thomas St.G. Bissell
An “exit tax” enters the U.S. tax lexicon — §877A and guidance under Notice 2009-85
Tax Management Memorandum 51:8 (12 Apr 2010) 123-135

No link available.

A technical article with 51 footnotes by a tax lawyer. The IRS Notice estimated an annual renunciation of “approximately 100 taxpayers.” The new rules introduced by the HEART Act of 2008 apply “to an individual whose ‘expatriation date,’ as specially defined in the law, is after June 16, 2008.” The new Form 8854 applies to expatriations subject to §877 before 17 June 2008 as well as to expatriations after that date subject to §877A.

Written by usxcanada

12 April 2010 at 6:00 am

2010 Mar 19 – Martin

Eileen Martin / Elizabeth Buscaglia
Border crossings trip up travellers with latent tax liabilities
Lawyers Weekly (19 Mar 2010) 10


The Western Hemisphere Travel Initiative effective 1 June 2009 may affect extraterritorial US citizens seeking to enter the United States. “What begins as an innocent-sounding requirement — to travel on a U.S. passport or obtain a CLN [Certificate of Loss of Nationality] — can have serious tax consequences and preclude a former citizen’s ability to enter the U.S. for the rest of her life.”

Written by usxcanada

19 March 2010 at 6:00 am

2009 Oct # – Kwong

Yu Hang Sunny Kwong
Catch me if you can: relinquishing citizenship for taxation purposes after the 2008 Heart Act
Houston Business & Tax Law Journal 9:3 (Fall 2009) 411-444.

No link available.

This seven-part article features 281 footnotes. Parts: (1) Brief introduction (2) Cultural and financial aspects of tax-motivated expatriation (3) History of relevant law (4) Present circumstances (5) Essence of the problem (6) Possible improvements on current legislation (7) Conclusion.

The history in part 3 covers: (a) Early history (b) Expatriation Act of 1868 (c) IRC §877 and Foreign Investors Tax Act of 1966 (d) Health Insurance and Portability and Accountability Act of 1996 (e) American Jobs Creation Act of 2004 (f) Legislation 2004-2008 (g) Heroes Earnings Assistance and Relief Tax Act of 2008.

Part 4 covers different tax categories (income, gift, estate, exit, succession) as well as considerations relating to immigration law.

Kwong addresses “the difficulty of enforcing the United States’ system on wealthy taxpayers with enormous resources, patience and influence.” Yet strong “cultural resistance towards tax-driven expatriates” ensures that legislators will continue to persist in attempting to close loopholes.

Kwong concludes: “The only reliable way to remove the incentive to the expatriates is to adjust the expatriation tax regime so that it is revenue neutral.”

Written by usxcanada

1 October 2009 at 6:00 am

2009 Sept # – Sardar

Michael Sardar
The FBAR and the Fifth Amendment
Journal of Taxation 111:3 (Sept 2009) 180-182


10 footnotes. Sardar concludes: “It appears that in certain circumstances a taxpayer can make a persuasive argument — distinguishing the Sixth Circuit’s decision in Sturman on the grounds discussed above — that the filing of an FBAR would amount to self-incrimination in violation of the Fifth Amendment, and that the failure to file an FBAR is therefore justified.”

Written by usxcanada

1 September 2009 at 6:00 am

2009 Jan # – Singer

Paula N. Singer
Ten common tax return errors foreign nationals should avoid
View from the crow’s nest 6:1 (Jan/Feb 2009)


Excerpted and updated from articles four articles by the author previously published in 2006 and 2007. This succinct and useful outline of issues is produced by a tax law partner “over 25 years of experience providing advice and compliance services to individuals and their employers, and payers on cross-border matters.”

Written by usxcanada

1 January 2009 at 6:00 am

2006 # # – Sheppard

Hale E. Sheppard
Evolution of the FBAR: where we were, where we are, and why it matters
Houston Business and Tax Journal 7:1 (2006) 1-41


“Congress amended the law in late 2004, introducing new penalties for non-willful FBAR violations and more stringent penalties for willful violations. To implement this strengthened law, the U.S. Treasury Department delegated full investigatory and enforcement authority to the IRS.” [229 footnotes]

Written by usxcanada

1 January 2006 at 6:00 am