#americansabroad living in Canada face #IRS tax deadline http://t.co/4K1dMgSSjt – from the media and the #FATCA compliance industry!
— U.S. Citizen Abroad (@USCitizenAbroad) June 12, 2013
You may want to get over to today’s article in the Toronto Globe and Mail and add your thoughts. I would say it is one more in a long series of weak articles that seems to miss the point(s). Perhaps you can help educate.
It begins with:
The deadline for Americans living in Canada to file a tax return with the U.S. Internal Revenue Service is less than a week away, but not everyone is scrambling to get their paperwork in order.
You can guess the horror that follows!
There is one comment that seems to make some sense:
Arrow
12:41 AM on June 12, 2013
As per the usual custom with the Globe’s coverage of this issue, it neglects to point out that “Joe” doesn’t have anything to worry about as long as he stays out of the US. CRA will not pursue IRS claims for tax or penalties against a Canadian citizen in Canada. And Canadian courts have so far refused to rule in favour of the few cases the US has tried to bring against people like Joe.
And as far as renouncing his US citizenship — the US will try to insist that Joe pays the piper before they let him go. If his estimated cost for doing that is $50,000 just in accounting fees, plus whatever tax they decide he owes, he should simply give them the middle finger and steer clear of the border.
Why is there no sense of outrage over how the US treats “accidental” Americans like Joe? If we’ll send an Eritrean consul packing because he’s trying to extort from Canadians a 2% diaspora tax, why do we let the US ambassador stay in the country?
The two accountants are with Trowbridge Professional Corp, the same accounting firm that’s holding the BMO seminar for US persons in my neighbourhood on June 17th.
We should send these accounting and law firms packing. They don’t understand the law. There is no justification in law for the world-wide taxation of “US citizens” who have citizenship in their non-US country of residence. None. This is because such people like “Joe” do not enjoy the protection of the United States, because of the doctrine of non-interference of nations, for the entire time that he lives in Canada where he is a citizen. When you live in a country of citizenship, your protection comes from that country.
The US cannot say, “Oh, we can tax this person because he enjoys the protection of the United States.” It says right on the US passport that you don’t receive that protection if you are a dual citizen and living in your other country. Come on everyone. Stop worrying. Start lobbying the Canadian government to protect its citizens and to sue the United States for wrongfully taxing our people.
These cross-border compliance folks should become readers of the blog, folks. There is no justification for what they are doing and charging their clients while their at it. It is general American stupidity. Please read this post and those linked to in it: http://isaacbrocksociety.ca/2012/01/07/dominant-and-effective-nationality-and-why-it-matters/
I just felt my blood pressure rise again! I wish the Canadian government would hurry up and do SOMETHING already! Even if an IGA is signed, at least we can take the next step with class action law suits instead of this interminable waiting.
Is our government is going to wait to the bitter end (October 15) before doing anything concrete? So, we do have a definitive end date to the waiting, I guess.
FFI’s must be shaking in their boots right about now, since they have a July 15 deadline to consider. If none of them sign up, then I take it that means that FFI’s know something we don’t.
I was interviewed for the article – but in the end, asked them not to use my name, because at the time I was interviewed I was just a few weeks away from applying for my CLN, which I am now waiting to receive.
My story is that I am no longer a US person, rather I have been a Canadian since 1985. I do not have tax obligations in the US, and am not filing any tax forms in the US, as I don’t act as a US person. I regret that my story did not appear…and may write back to the editor once I have my CLN in hand. ETA – July.
The Canadian media has not told our story. They lazily parrot whatever the IRS puts out. They should have been digging into this — or have they been gagged?
I have had much more mileage speaking with the US media than that in Canada — unless it would be a story exploiting my son.
All I can really hope to do when I go to the BMO Trowbridge Vulture seminar is to maybe throw a spanner in the works. If there’s a question period at the end, I intend to make folks aware of the fact that the US is considering moving to a residency based system of taxation and how listeners can contact Canada’s Department of Finance to say no to FATCA. I also plan to hand out info sheets on where the Green Party and NDP (lots of them here on the Sunshine Coast) stand on the issue and who is making efforts to repeal FATCA. People have to know that it’s not time to surrender!
Well, I just came home from the US tax information seminar sponsored by BMO. The speaker, Mo Ahmad was from Trowbridge Professional Corporation, and the audience consisted of about 20 people (more than I thought there’d be up here on the Sunshine Coast) most of whom were in their autumn years.
Mr Ahmad spent about 45 minutes reviewing the many aspects of US tax compliance and took questions throughout the seminar. After about 10 minutes in, many were turning around to have a look at the woman who was interjecting from the last row. My comments started from the get go when his powerpoint presentation make an erroneous reference to Form 8939.
The speaker didn’t really make a hard sell of accounting services and surprisingly almost skimmed over FATCA, so much so that I didn’t feel compelled to bring up the fact that many in the US are seeking to repeal it. I did however have to correct him when he talked about loss of US citizenship and misled the audience into perhaps believing that they hadn’t done so when they got Canadian citizenship many years ago. I advised the audience to make sure that if they believed they lost US citizenship by becoming Canadian not to do anything to reinstate it until they looked into obtaining a CLN. I know in fact that I had diverted at least one US citizen who was already on the reinstatement path because he came up to me after and asked for more information and told me he has been working on FBAR’s. He seemed incredibly relieved. Sadly, one other man told me he had never done anything over the years until he voted for Obama. We both had sort of a half-chuckle when I said that was bad for two reasons. I had a couple of handouts I’d made and suggested they go to Isaac Brock for more information on relinquishment and obtaining a CLN. My other shining moment was when I asked the speaker if he was aware that the US is considering going to a residency based system of taxation similar to Canada’s and that all of this may be just a moot point. His response was a dismissive: “that kind of thing could take years” he said. I suggested that listeners go to American Citizens Abroad for more information about it. I was pleased that many wrote that down. We did get into a bit of a tussle when he said that you can’t renounce without paying US taxes and I said that one in fact can renounce to ‘stop the tax bleeding going forward’. There was no clear winner there, but my objections were enough that one would be compelled not to take his words at face value.
I also had a young person from the bank assure me that they would not be asking recalcitrant account holders to leave the bank. Pretty good evidence of how clueless the average bank employee is, I’d say.
If I saved just one person from the IRS’s clutches, it was worth having my bank manager think I’m a real pain 🙂
@bubblebustin,
Good for you! I am sure you saved more than one person from unknowingly taking a path they might live to regret.
Yeah for you bubblebustin!
Every bit helps, and wow, you obviously saved some people from jumping or falling into the quicksand. Knowledge came too late for some, but at least we can make others aware as the opportunity arises.
Bravo, bubblebustin. I know that felt good! Those others got excellent information by your attendance. Perhaps the Norway and Sweden information meetings should have someone like you in their last rows. Good work in passing on information on what will be life-changing for many there.
@bubblebustin
Great stuff! You have guts!
Am glad the Toronto meetings are so different from this one and probably, the ones in Norway and Sweden. I can’t really imagine any challenge (and thus, useful information) coming out of meetings organized by the govt, banks or acct/legal industries.
Super, Bubblebustin! Terrific you were there speak up with the facts at the presentation. Because of you, some of the attendees probably got a lot more benefit from the seminar than they ever would have expected! That was a great idea to provide a handout too.
Thank you everyone. I wished I been attending the meeting in Toronto instead, believe me.
I’ve been reflecting on something else the speaker said. I thought it curious that he would suggest that some might consider using his services to arrange their financial affairs so that they are protected from scrutiny by the IRS (i.e. put accounts in non-US persons name).
This may indicate that we should be preparing ourselves to see in Canada a blossoming of accounting services for USP’s that aim to conceal information from the IRS. This advice to take evasive action is very dangerous and could have a potentially worse outcome than doing nothing, imo! Is this the kind of predatory behaviour we can expect from Canadian accounting firms, to encourage and profit from US taxpayers taking evasive action? Who’s left holding the bag if things foul up?
Not only that, something must happen to a person psychologically when they take an action that seriously contradicts past behaviour in this way. Was this discussed in Toronto last weekend? I know for myself I couldn’t go that route for reasons I can’t quite explain, but as I wrote in a previous post: “slipping though the system in this way has at least one very direct negative consequence: there is one less voice to express the atrocities against us. It may be sauve que peut, but we then become complicit in allowing the crime to perpetuate itself through our own self-interest and preservation, to silence ourselves when we instead should be publicly speaking out against it regardless of the consequences of doing so.”
…and perhaps as a result changing it.
@bubblebustin
I look at it as FATCA avoidance, not evasion.
I enjoy discussing this with you WhiteKat, because we look at the problem from entirely different angles. Perhaps if you were in my shoes you would have done what I have done, and I you. Both of us, it seems are willing to live with the consequences of our actions. It’s evident that this war will continue to be fought on many different fronts perhaps for a very long time, with the risk of all types of casualties-but nonetheless must be fought!
@Bubblebustin,
Actually, I think we agree on a lot more than we disagree on :), but as you indicated, our personal situations are different, and necessitate different actions.
For example, you say: ‘I know for myself I couldn’t go that route for reasons I can’t quite explain, but as I wrote in a previous post: “slipping though the system in this way has at least one very direct negative consequence: there is one less voice to express the atrocities against us”‘.
I don’t equate avoiding FATCA and citizenship-based taxation, as ‘slipping through the system’ or as resulting in ‘one less voice to express the attrocities against us’. I think it is quite possible to actively endeavor to avoid the negative repercussions of US tax and reporting laws, while simultaneously expressing one’s opposition to the immorality of it.
@bubblebustin,
I sure do agree that the ‘compliancy’ firms, and the lawyers, and the accountants are predatory – and that someone in your situation is in a better position to educate others who are leaning towards the ‘compliance’ route.
I would love to have been a fly on the wall (or buzzing around the speaker’s head) at the BMO session you attended!
I agree with Whitekat. Why would you cooperate with some one who is trying to rob you? Arranging your affairs to avoid trouble is perfectly reasonable.
@Bubblebustin,
You mention that some of the information from Trowbridge Professional Corporation at the BMO meeting was incorrect. By coincidence, I was complaining to the same company yesterday that some of the tax information it provided to the Globe and Mail in its June 11 article (above) was incorrect.
Today correction of the error was made (online).
@Petros, you say: “These cross-border compliance folks should become readers of the blog, folks.”
I agree.
@KalC,
If the robber is pointing a gun at your head, you are likely to co-operate. So far, I don’t see any gun.
@KalC
I guess it would involve determining what the odds of the thief being successful are, wouldn’t it?
I’ve heard it recommended that we treat the compliance dilemma as a business decision. One must remember like any business decision, it must be constantly reviewed of it’s merit.
@bubblebustin,
Isn’t that how the USA justifies FATCA – as a ‘business decision’?
Isn’t that also how other countries justify their acceptance of FATCA despite its negative impact on innocent ‘US persons’ abroad?
If we treat our own compliance issues, unemotionally, in a business like way, what does that say about us as individuals?
@IRSCompliantForever
And coincidently enough, I was thinking the same thing this morning. Should I send a link to this conversation to my new friend, if only to allow him the chance to defend himself?
May I ask what the correction was?
And I just remembered that the speaker said that there have already been incidences of people being asked by US border agents if their taxes are in order! I haven’t heard of ANY incidences of this happening. Is this just scaremongering?
@Bubblebustin, the article originally stated that the new 3.8% Obamacare tax (for the many US medical services services you and I receive) kicks in at incomes of $450,000 per couple and $400,000 per individuals. These very high thresholds are incorrect as the actual numbers are much lower: $250,000 married filing jointly, $200,000 single, but only $125,000 for married US persons who are filing single (does not want to involve non-US spouse).
The consequence of the incorrectly stated tax threshold is that most US persons will say: good news, I don’t make 400k so I can ignore Obamacare tax—but the threshold is much lower and many do earn $125,000.
The “correction” statement at the bottom of the article is still somewhat misleading. The new text is now not incorrect, but it also is not helpful as the actual thresholds are not provided.
My hope is that the combination of FATCA plus the new Obamacare tax (probably no foreign credits can be used for this, and RRSPs might be affected in a treaty violation) will anger so many US persons in Canada that Flaherty will be forced to provide us with some “protection.” This may be the first time that many US persons in Canada will actually have to pay some tax to US.
Regarding border crossing, I was told recently that two renouncers were “stopped” at the BC border. I cannot confirm.