I just saw this news piece on Global News tonight. The only thing that I can do is to ask why is it that, the federal government hasn’t put the word out that “U.S. persons are a threat to the Canadian economy?” Canadians seem to be just as naive as the Americans are deceptive. No one seems to be listening to what the U.S. is doing.
Americans aren’t allowed to emigrate in the true sense of the word. What is so difficult to comprehend about that message?
On a general note, there is going to be a program in French on Swiss TV tonight about the death of bank secrecy. http://www.rts.ch/emissions/temps-present/economie/4391635-banques-etat-d-urgence-br-secret-bancaire-adieu.html
What’s the difference between ignorance and apathy? I don’t know and I don’t care.
When most folks deemed US taxpayers in Canada haven’t yet had their OMG moment, how can be possibly expect the general Canadian population to know about this? We are the very few who live outside the bubble. Even if they knew, how much responsibility should a potential employer of US citizens in Canada take in informing a citizen of another country of their tax filing obligations, especially when it could act as a deterrent to recruitment?
@bubblebustin- It isn’t the lack of knowledge amongst the general population on either side of the border that baffles me. Rather it is the clear continued ignorance of the politicians that amazes me. You would think that by now that the Federal government would have sent the word that U.S. immigrants are no longer desired. You would also think that the provincial leaders who claim to exercise some policy with regards to provincial immigration, would have exercised their due dilligence and shut down U.S. recruitment.
This is all just stupid. When it comes to the U.S. everyone seems to live in la la land.
In my Pre-2013 Budget submission to the government of Canada, I suggested that if the US was to continue being negligent in informing its citizens living abroad of their tax filing obligations, that the Canadian government should allocate funds in doing so. I wrote (with a little help from my friends):
“For various reasons, parts of Canada are experiencing a shortage of qualified people to fill jobs.
Americans would be a good fit for Canada, but problems will naturally arise due to the US’s policy of
extraterritorial taxation, making these workers less desirable than those from other countries. The Canadian government must make every effort possible to persuade the US to abandon its policy of
citizenship-based taxation in order to make American workers less impeded when competing for jobs
and business opportunities abroad. The taxation of US persons in Canada threatens the economic
security and independence of those citizens by taking from their savings through taxes, penalties and
the high cost of compliance. With Canada’s aging population, it is of increasing importance that
individuals are able to sufficiently save in order to supplement the government plans that are available.
When the US government penalizes through taxation, the ability of US persons to contribute to even
some of Canada’s mandatory and voluntary retirements savings opportunities, US persons are left
vulnerable and less able to contribute to the Canadian economy in old age and will potentially place more of a burden on Canadian government subsidies. The Canadian government must examine what
the cost will be to Canada’s economy when US persons, unable to contribute to RRSP’s, PRPP’s, TSFA’s,
and RDSP’s, are less able to contribute to the Canadian economy or cover the costs of their own care in
The IRS has the responsibility, duty and obligation to reach out to US persons
living abroad to make filing requirements discoverable and known to those who are required to make
them. The IRS seems to have deliberately ignored their citizens living abroad in its education and
outreach efforts, when in fact these groups should have been the primary audience. Accepting this,
should the Canadian government be unable to make a compelling argument for the US to invest in
responsible and adequate means to educate its citizens, the Canadian government itself must step up to
do so in order to protect its citizens from the potentially life altering consequences through the actions
of the IRS. The Canadian government should be informing US persons in Canada of which measures our
government is taking to protect their rights as Canadians or permanent residents. Finally, the
Government of Canada must give consideration to the long-term effect its permanent residents and
citizens with US tax and reporting requirements will have on the economic stability and tax base of
Canada. Eventually, Canadian immigration authorities may need to recognize that US persons seeking
residence here have inherently divided loyalties forced upon them by US tax policies, therefore
becoming potential liabilities to Canada. As a result, it may become necessary for the Canadian
government to restrict US persons from seeking permanent residency and citizenship in Canada.”
I’ve had arguments both in and outside Brock about allocating tax dollars to what some see as a purely a US issue. I don’t know what more I can do!
FOX news was in Edmonton last week taping a show about how unemployed Americans are flocking to Alberta for jobs. The province is actively recruiting Americans (with skills) for industry work. My husband grumbles b/c, being very Canadian, he doesn’t see the influx as a good thing for Alberta (“Alberta is already too much like Texas,” he says.)
I just marvel at how naive these people are although I know that some probably do know about the filing implications and are okay with it.
Husband’s company is sending tons of workers down to their Texas operations and he was talking to one recently who is going down there for a second stint. He even has a son who is a USP, having been born there during the last assignment. This guy was well aware of the filing and thinks little of it.
So, it’s either ignorance or acceptance or something in between. Sometimes I wish I was less awake. It’s gotta be an easier way to live life.
Curious, your husband’s fellow worker who “thinks little of it”, does he file and think little of of the obligation of having to do so, or does he think little of the obligation to file, therefore doesn’t?
@a- the problem is that people hear the word “filing” and interpret it in a very simple way which is to treat it like doing translation work where you are purely looking for equivalencies. Little do they realize that filing and compliance are two different things.
They don’t realize that living a life of compliance is very complicated and is much more restrictive. Nor do they understand the implications of the U.S. denial of their “lack” of status in their country of residence or how having bank accounts outside of the U.S. can get them in serious trouble.
They haven’t a clue about all of the trap doors that are built into the U.S. tax code just for them.
@bubblebustin- I agree that Canada has to immediately cease accepting U.S. immigrants who have not renounced their U.S. citizenship. Canada should implement a fast track process to Canadian citizenship just for U.S. immigrants.
Canada should cease to any longer be a party to an arrangement in which one side calls all of the shots by expecting its laws to govern its citizens when they no longer reside within its jurisdiction. The residents of Canada should be governed by only one legislative body and that legislative body should be exclusively the one of their country of residence.
Canada needs to stop trying to avoid embarrasing the Americans. The Americans care nothing about embarassing the Canadians.
Freedom for all Canadian persons in Canada.
I wonder if he is REALLY aware of the filing requirements outside of the US vs those inside the US? I have read of longer-term snowbirds just having a US preparer do their US tax return in the States, preparers that may not at all be cognizant of their clients’ real tax return and reporting requirements (from outside the US). Although Canadian preparers are becoming more knowledgeable of US tax return and reporting requirements for US persons, this too is a long time coming. Many USPs in Canada have been told by Canadian preparers, including me long, long ago, it was not required to submit US tax returns. In hindsight, good money paid for bad, dangerous advice.
The OMG moment — the hit in the head by a 2 by 4. How incredulous were we all? How unbelievable is this to other USPs or, even more unbelievable, to other Canadians who think none of this affects them?
Re: “Even if they knew, how much responsibility should a potential employer of US ctiziens in Canada take in informing a citizen of another country of their tax filing obligations, especially when it could act as a deterrent to recruitment?” I guess I would answer: Is it an economic issue? OR Is it a moral issue? Someone along the line needs to inform these potential USP employees (labourers especially, with little financial literacy) of their requirements. Their school system failed educating them; their country / IRS failed to educate them and now these jobs for otherwise unemployed in the US skilled labourers is a carrot in front of their (and their families’) hungry faces.
” Is it an economic issue? OR Is it a moral issue? ” YES!
I describe my OMG moment as when I looked down at my feet and shackles appeared around my ankles. They had been there all along, I just never saw them until then. 🙁
Right — the shackles around our ankles and the tatoos on our butts.
At first my husband thought that perhaps his coworker didn’t really understand all the obligations, or the implication of his son’s USP status, but after a bit of conversation, it appears that this guy really did get it and just saw it all as a paperwork thing. No big deal. Does it all himself. Considers it when of those annoying yearly tasks like cleaning the gutters or something. I should add though that he is an engineer. They see the world in its most practical sense and often they just sigh out of annoyance and deal.
There’s the joke about them:
The optimist sees the glass as half full. The pessimist sees the glass
as half empty. The engineer sees the glass as twice as big as it needs
I’ve run into more than a few of hub’s co-workers who regularly transfer back and forth from US due to job. A few have even become dual by acquiring USPness themselves. They don’t seem upset though I don’t know how well each of them understands or if they get that the filing is starting to pile up or what FATCA might mean. They just look at it as “I need to do this. What’s the best way to approach and complete the task?”
I am, personally, amazed by those who just trust that govts do what is best for ppl b/c I don’t think necessarily that the evidence really supports that level of complacency. Or they just plod through with a “when in Rome” attitude. Though to me, it’s annoying to live by Roman standards when technically you don’t live there anymore.
Thank you for clarifying that. I suppose if you know what you’re getting into, the experience will be totally different than if you moved to Canada as a child and find out 44 years later that you have a tax obligation. When every US citizen becomes informed of the reality of the situation, we will surely see fewer Americans emigrating, and more renunciations. USA, one of the most un-free nations in the world in terms of its citizens going abroad, yet the people you speak of seem resigned to it.
If you husband’s co-worker understands the in’s and out’s and severe consequences and penalty costs of not correctly and completely timely filing US IRS forms listed below (ex. 3520 and 3520A’s — how many of us got caught in that fiasco?), HAT’S OFF to him. He’s a better man than I am a woman.
International Tax Forms
Tax Returns Required by U.S. Persons with Foreign Source Income and/or Foreign Persons with U.S. Source Income
Form 56 – Notice Concerning Fiduciary Relationship
Form 706 – U.S. Estate Tax Return
Form 720 – Quarterly Federal Excise Tax Return
Form 706-CE – Certificate of Payment of Foreign Death Tax with Claim for Credit Against U.S. Estate Tax
Form 709 – United States Gift Tax Return
Form 926 – Return by U.S. Transferor of Property to a Foreign Corporation
Form 1040 – U.S. Individual Income Tax Return
Form 1040-B – Schedule B – Part III – Information Regarding the Creation of and Transfer of Property to Foreign Trusts and Accounts
Form 1040-C – U.S. Departing Alien Income Tax Return
Form 2350 – Application for Extension of Time for Filing U.S. Income Tax Return for U.S. Citizens Abroad
Form 1040-ES(NR) – U.S. Estimated Tax for Nonresident Alien Individual
Form 1040-NR – U.S. Nonresident Alien Income Tax Return
Form 1041- U.S. Fiduciary Income Tax Return
Form 1042 – Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
Form 1078 – Certificate of Alien Claiming Residence in the United States
Form 1116 – Foreign Tax Credit for Individual, Fiduciary or Nonresident Alien
Form 1118 – Foreign Tax Credit for Corporations
Form 1120F – U.S. Income Tax Return of a Foreign Corporation
Form 1120-FSC – U.S. Income Tax Return of a Foreign Sales Corporation
Form 2063 – Departing Alien Income Tax Statement
Form 3520 – Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts
Form 3520-A – Annual Information Return of Foreign Trust With a U.S. Owner Form 4970 – Tax on Accumulation Distribution from Foreign Trust
Form 3903-F – Foreign Moving Expense Deduction
Form 4224 – Statement Claiming Exemption from Withholding on Income Effectively Connected with a U.S. Trade or Business
Form 4789 – Currency Transaction Report
Form 4790 – Report of International Transportation of Currency or Monetary Instruments
Form 5471 – Report by Shareholders of a Foreign Corporation
Form 5472 – Information Return of a 25% Foreign Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business
Form 8233 – Exemption from Withholding on Compensation for Nonresident Alien Individual
Form 8288 – U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property
Form 8279 – Election to be Treated as Foreign Sales Corporation
Form 8621 – Return by Shareholder of a Passive Foreign Investment Company or a Qualified Electing Fund
Form 8805 – Foreign Partner’s Information Statement of Sec. 1446 Withholding Tax
Form 8832 – Entity Classification Election
Form 8833 – Disclosure of Treaty Based Return Position
Form 8854 – Expatriation Information Statement
Form 8865 – Return of U.S. Persons with Respect to Certain Foreign Partnerships
Form W-8Ben – Certificate of Foreign Status of Beneficial Owner for U.S. Tax Withholding
Form 9003 – Information Statement by Applicants for Permanent Residence in the U.S.
Form SS-4 – Application for Federal Tax Identification Number
Form TD F 90-22.1 – Report of Foreign Bank and Financial Accounts
Form TD F 90.22.47 – Suspicious Activity Report
Form W-8 – Certificate of Foreign Status
plus Form 8891 (Canadian RRSPs) and new FATCA Form 8938 (My former CA won’t take any more US clients because of the time requirement and cost to her clients for completion of the 8938.)
@a, bubblebustin, Calgary411- I personally don’t think that any of the people who claim to understand the tax code as it relates to overseas residence actually do understand it. Even professional practioners don’t claim to have full comprehension.
What I think actually happens is that people simplify what is an overly complex problem and judge their knowledge or compliance on a relative scale as opposed to the absolute scale that is used by the IRS.
If you want another example of a government law that resident U.S. citizens should be up in arms opposing, I would invite you to read this article which details how privacy of U.S. persons is going to be restricted even more. Civil rights in America are fast being tossed aside and an unnecessary interference with the government’s prior right to act.
Expect all Victoria’s Secret undergarment stores to be under constant surveillance.
At this point I WISH nine aliens would come down to save us from ourselves on December 21st 🙁
“What I think actually happens is that people simplify what is an overly complex problem and judge their knowledge or compliance on a relative scale as opposed to the absolute scale that is used by the IRS.”
Like refusing to use a map while driving in unfamiliar territory?
Oh, I agree. I think most ppl think they have a handle on it until a mistake gets pointed out or they suddenly realize that they don’t as they try to wade through rule changes.
And I do agree that it is about information. Right now, it is only those who bother to educate themselves – like folks who have to relocate for jobs – who have (most) of the correct information. I only continued to file tax forms when I moved up here b/c I knew it was required. It’s not like the USG proactively informs on that count b/c I am still finding things out.
But I still think that most folks just rationalize and live in their own perception of how things are until rudely awakened. Most ppl are asleep.
1984 is finally here. Very few paying attention in this “entertain me” world. Why don’t US citizens seem to care about the removal of their rights, little by little, big by big?
Total Information awareness is back in another form, or so it would seem. Remember when the Reps tried to create it in 2002?
How is this much different? These efforts never end, they just morph into a new form. Combine this with GATCA BIG DATA collection, and yes, it is way past 1984! Orwellian is almost a quaint term for where we are heading.
Why don’t they care? Well, I have a theory related to social media. I think the Facebook culture of sharing of everything, with little in the way of privacy concerns, has inoculated many of them from caring!
Don’t forget the form 8938 that is now filed with the form 1040 (under penalties of perjury) and lists all the (relatively wealthy) US person’s foreign accounts and assets, and their value, other than real estate…