CONSULTING WITH CANADIANS
Good planning starts with listening. Finance Canada consults with Canadians on issues large and small, enabling public input on policy options. The Department tries to ensure that as many people as possible – whether they represent businesses, groups with special interests or individual Canadians – get the opportunity to have their say.
Very interesting, but as an American peering across the border, this issue of double taxation by the US of Canadians who knowingly or unknowingly are also considered by the US to be US Citizens and therefore also sublect to US taxation on their worldwide income, appears to me to be an issue that might merit attention at the very top levels in the Canadian Government. In order for any changes to occur in US law which mandates that the US Internal Revenue Service collect taxes from all persons with US citizenship, no matter whether they live in the US, Canada or anywhere else in the world, it is the US Congress that must act to change US tax laws. The IRS has absolutely no authority to negotiate any deal with Finance Canada, or with the tax authorities of any other country that would allow more favored treatment of US citizens resident in that county.
The tax treaty between the US and Canada currently in force acknowleges and grants the right of the US to collect taxes from US citizens resident in Canada. All US tax treaties and modifications thereto have to be approved by a vote of the US Congress.
And it is not just US citizens in Canada that are going through this identical traumatic Hell. It is taking place across the world as the IRS attempts to comply with the mandate of Congress to collect more from US citizens living abroad.
For sure this isn’t just a Canadian issue, it is for all the world’s ‘US persons abroad’. This post is but one additional avenue for awareness. I leave it to the expertise of those like you, Mr. Conklin. Your knowledge and advice to all of us here is golden.
The existing tax treaty could be renegotiated so that the US recognized RESPs, TFSAs and so on as tax-exempt savings vehicles. I suspect that this would result in zero loss of actual revenue to the US, while regaining a certain amount of lost goodwill.
It will be interesting to see what Douglas Shulman will be saying in his announcement on the 26th.