Barrie Mckenna has recast his article from yesterday to include the following information: Flaherty pleased with IRS partial tax amnesty decision.
Here is my response:
Thanks for informing us the Jim Flaherty is happy with this accomplishment. Yes, he made the Americans back down, didn’t he? But lets see: the IRS says I owe 3000K in 2009. That’s more than the $1500 concession they are making (that’s such a trivial sum–it’s not much of a challenge for the IRS to find that you owe that much or more). That’s from my regular filing because they did not allow my Foreign Earned Income Exclusion. Then there is my friend in Vancouver who paid 100K in capital gains on the sale of her Vancouver, BC, home, because Canada charges no capital gains on one’s primary dwelling. Then there is the guy who said he paid 3000 because his TFSA is not an exempt account. Then there was the person who paid the Alternate Minimum Tax of $[6000] because the Canada US tax treaty is less recent than Congress’ passing the AMT, so that the courts decided the most recent law, not the treaty, is what matters if there is disagreement. Meanwhile, everyone of these Americans who wants to file will have to pay a qualified expert, because you can’t use an uncertified tax preparer anymore, and that will cost between 1-3K if there are no complicated issues like if you own a “foreign” mutual fund (read, “Canadian” mutual fund) which is treated as PFIC, and subject to draconian tax treatment.
Mr. Flaherty is happy because he’s not an American and he can now proclaim a victory. But this is not a victory. This is still only first step sideways on the part of the US, in a major invasion. This is going to be long and hard fought battle and it is not too different from the conditions that led to Canada’s last real war with the United States, the War of 1812, when Isaac Brock fought of the US forces giving his life in the process. This why we call ourselves the Isaac Brock Society. Visit us if you too want to join in protecting Canada from an American invasion of the tax base (see http://isaacbrocksociety.ca ).
Mr. Flaherty: No country allows another to invade its tax base without having first lost a military battle. Well, not unless that country has already lost its sovereignty. That’s something to think about.
@calgary, Roy Berg’s summary sounds really attractive doesn’t it? I’m sure Canadians will be lining up to take the bait! (Oh yes, and spending thousands of dollars in the process). I think Flaherty and gang dropped the ball on this one. Drone strike, hit the bunkers!
@joe smith, I laughed so much, I cried…and cried…and cried.
@bubblebustin, @Joe Smith,
The IRS has only offered us more questions with no good answers. Too many if’s / many waiting traps. What about those of us who have already waded into the morass? Shall we stop; move forward? What about people (including my son for whom I do not have the right to renounce on behalf of / he is developmentally delayed) who hold legitimate registered accounts from the Canadian Government — our Tax Free Savings Accounts, our Registered Education Savings Plans, our Registered Disability Savings Plans on behalf of our family members with an intellectual developmental disability, dementia, etc.? Am I “high risk” (sophisticated tax planning or avoidance) if I set up a testamentary trust for my disabled family member to make sure he is not living under a bridge upon my death?
I am glad to see Roy Berg’s take on what some of the “traps” might be. They would have not entered my mind.
More waiting. Will it ever end?
IRS has upgraded from ‘Pandora’s box’ to ‘black hole’, where energy enters to never return. The only fix is to abolish citizenship based taxation.