Globalnews.ca reporter Anna Mehler Paperny is hoping to interview Canadians who have renounced US citizenship in the last few years for a story on citizenship/IRS/FATCA-related issues. Ideally she would like to use people’s real names.
Pls contact:
Anna.Mehler Paperny (at) globalnews.ca
(416) 443-6003
There’s an imp in me which would love to send Cruz a fake CRA scare letter telling him that before he can renounce his Canadian citizenship he must file 5 years of Canadian tax forms on all his “foreign” US income and he will be fined $10K per US account which he did not report to the CRA in that period and he will be subject to a Canadian exit tax. And at the end it would say, “GotchaI This is what it’s like to be an American renouncing his citizenship in Canada”. Oh and I might add, “Be grateful you are renouncing the citizenship of a more sane and humane country than the USA”.
Perhaps it should come from the CRS – Canadian Revenue Service. And also mention the massive penalties he’s likely racked up for not filing FUBARs – “foreign, undeclared bank account reports”. And, oh almost forgot, there may be criminal prosecution for not filing those pesky FUBARs.
@em Well, there is a REAL letter I received just last week from Service Canada, saying that my Canadian Social Insurance Number had been declared “dormant” due to inactivity since I live outside Canada. Despite being a Canadian citizen, in order to get it reactivated (and be able to legally work in Canada) I would need to provide an account of my activities, including documentation, for all my years outside Canada to the satisfaction of Service Canada. In practice I am told they would not demand much info, especially if I did this in Canada and had proof of Canadian citizenship. But there is something fundamentally wrong about a Canadian citizen not being able to work in Canada without the approval of Service Canada.
Em
If you are not going to cross the border, would it not be cheaper for you to not do the form 8854 FBAR, exit taxes.
Canadian Government and courts will not collect US taxes. Since you file Canadian taxes and Canada does not have the (Canadian person requirement foreign non resident taxes) the US government may not be able to extradite you in that case. You probably owe no USA taxes in that case.
@ money
It’s not a matter of cheaper. It’s a matter of being a Canadian and not appreciating a foreign country criminalizing me for that. I owe the USA nothing, including form servitude.
I am back to the question Can Canadian bank quick out Canadian who do not pay bogus US taxes?
@ Dash1729
Well that kind of sucks but it sounds like a recent thing. I never received anything from Service Canada many years ago. I came back, started filing with the CRA again and that was that. Anyway they can’t deactivate your Canadian citizenship, they are only asking you to keep your SIN active and at least they are letting you know about it. Doesn’t sound too bad — like American homelanders are prone to tell Americans living overseas regarding their US tax filing obligations.
I just sent an email to Ted Cruz’s assistant whom I met last year, comparing the case of the senator and of Americans abroad regarding taxation and reporting. Maybe they will pay attention now.
@ money
You have requested your I-407 copy, right? That should be all you need to give a Canadian bank — IF they ask. They cannot rat out people willy nilly. They would face litigation if they did.
Yea, Shadow Raider!!
The USA may loose the record of it. To be completely non US person I think you have to file the 8854 with FBAR, exits taxes etc etc. I would be broke after all this is done,
If the Green Card tax holders, hold the Green Card for 8 years or more, they are considered LTR – Long Term Resident for Tax Purposes.
So Long Term Green Card Tax holders, have to file Form 8854, if they meet the following criteria. The same rules apply for United States Citizens who have expatriated (relinquish United States Citizenship)and live and work in another country;
a) Average Income Tax Liability for the past 5 years since the day you abandoned your green card average $120,000
b) Your Net worth is $2 million or more
c) You have not complied on your federal tax obligations for the past 5 years
c is problem
If you meet any of these cases, as a green card holder, you have to file Form 8854 for each of the 10 years along with Form 1040 or Form 1040NR.
If you fail to file Form 8854 as a Green card tax holder, you are subjected to fines of upto $10,000 per year.
We specialize in green card taxes and abandonment of greencard taxes and can help you file the necessary IRS Green Card Tax Forms
@Em No they didn’t let me know about it–at least not on their own initiative. I found out because I was suddenly blocked from accessing the Service Canada website and called to find out why. The letter I received was in response to that phone call. If it weren’t for the fact that I like to keep an eye on anything that involves my money, I would have found out when (if) I move back to Canada and would have gotten called into my employer’s HR office and told my SIN came back as invalid.
It ISN’T “that bad”–yet. For many years the overseas tax obligations for Americans overseas weren’t “that bad” either–since usually they wouldn’t actually owe any taxes, FBAR wasn’t enforced, OVDI and FATCA didn’t exist yet. But as we’ve seen with the tax issue these things sometimes start with a small, trivial injustice and have a way of growing way out of proportion.
How bad it is in this case depends on how strictly it is enforced. They are asking for exact dates for every job I’ve ever had in the US. They also state that they may require documentation. I can’t prove exact dates of employment for all my time and jobs in the US. I wouldn’t expect them to make a big deal of this–but then again I wouldn’t have expected the IRS to start worrying about stored value on Swedish bus passes.
Also I see this as being another side of the same coin that dual citizens living in Canada are dealing with. If the Canadian government is distancing themselves from dual citizens living in the US–there is the risk eventually they’ll start distancing themselves from dual citizens living in Canada too.
Yes, it is a relatively new thing. At one time they didn’t flag SIN accounts as dormant–then for awhile they would flag them but not take any action, just reactivating them automatically when there was renewed activity.
Also it may depend on whether there is any activity at all on the SIN account. Having money in Canada or paying back students loans might result in the SIN remaining active–I’m not sure.
I don’t have any of those things in Canada. And this brings us back to the primary topic of this website, of course, because part of the REASON I don’t have money in Canada is because I don’t want to trigger FBAR filing requirements. So these issues are actually pretty closely related when you think about it.
Personally I may just want to be a test case before Canada Supreme Court that USA can not harass Canadian citizen/resident in Canada with their over complex rules. If your green card is invalid then the tax implication does not exist.
@money Even if the green card IS valid it should have no effect whatsoever on how a Canadian citizen is treated in Canada.
As long as I have to deal with Canadian courts I am happy. The only worried I have is US trying extradite me on minor issue and collect on FBAR, exit taxes etc. Since Canada has a resident tax system, I would love for the Canada Courts rules failing to file non resident American taxes is not extraditable,.
I know the Revenue Rule prevent them form collecting but there was that story about TD waterhouse trying to freeze that guys account.
Also there should be a rule that If I indicate that i have no desire to cross the US border or hold US assets the IRS must stop sending me letters. Failure to do so would cause a $10,000 fine for first letter to be be increased by a factor of 10 for each additional letter. The Canadian person can attached any US property including consulate and Embassies.
@ALLI have been questioning something. If you renounce/relinquish and file five years back of tax forms do you really HAVE to file FBARS? I mean it’s not taxes. I’m not sure what the purpose of filing FBARS is if you discontinue being reportable in the future on your accounts.
@Dash, sounds a bit like they are following the leader and getting ready to treat expat Canadians differently than in the past. They probably want to data share now. I really hate to see Canada doing things like that.
@money, I do not think they would be able to extradite under any circumstances for what you are talking about.
The reason why I find this Cruz situation so annoying is how easy he can rid himself of Canadian citizenship while US citizenship is not for those of us in virtually the same position he’s in.
@Atticus: This is quoted from which was posted a day two ago here. Seems to be very authoritative.
http://taxlitigator.wordpress.com/2013/08/09/tax-consequences-resulting-from-renouncing-u-s-citizenship-by-lacey-e-strachan/
“If the individual had a financial interest in or signature authority over a financial account outside the United States, the taxpayer may have also had a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (”FBAR”), filing obligation during the preceding five years. The FBAR filing requirement is not a tax obligation under the Internal Revenue Code—it is an information return that is required under the Bank Secrecy Act (codified in Title 31, U.S. Code). Therefore, section 877A does not appear to require compliance with past FBAR filing obligations in order to qualify for the exception to the expatriation tax rules.”
So not filing FBAR does not make you “covered” (so no exit tax). But it goes on the warn the IRS can collect penalties, somehow.
Attitcus
Still debating what to do about getting TIN on survivor right condo Still leaning to getting old social security number and not filling or filling with what will be require in Canada. I hate myself for signing that closing document and it would be pretty easy for IRS to get this old social security card number. They have my name which is not common and they can get birth date from Canadian notary The survivor rights condo had a lose.
@Atticus, what Kermitzii quoted agrees in substance with a comment that Phil Hodgen made at the Expat Forum, the one comment he made before they told him he had to pay in order to comment there again. I refuse to do an FBAR, and I have done so publicly at this blog (see http://isaacbrocksociety.ca/petros/ ). I was not detained at the border. Indeed, I was given a stamp on my passport that said I could stay for six months.
We are our own worst enemy. What the IRS can’t know, can’t hurt you. The only way for the IRS to know about your accounts is if you tell them. So I don’t see why you would file an FBAR: I honestly don’t see why anyone who is resident in Canada, on their legal accounts in the country of their residence, would do so after the minister said the government of Canada would not collect these fines. The only thing that the IRS can do is throw you in prison if you cross the border. But they didn’t throw me in prison. How much less someone who isn’t flaunting his/her position of not filing in front of the IRS (which 30 year tax veteran says reads this blog, LOL)?
Is it just my computer or has anyone else noticed that on the IBS homepage the column on the top right has moved to the bottom left? (That’s the column topped with Isaac Brock’s portrait.) On individual threads the column is as it was before.
May be your computer, Em. When I call up the home page, it appears as usual.
Thanks calgary411. I’ll have some words with it to see if it will straighten up and fly right. Actually I think Camino is the problem because all’s well on Safari.
Looks like Victoria has a post up at the Flophouse on the Ted Cruz story: http://thefranco-americanflophouse.blogspot.com/2013/08/ted-cruz-birthright-citizenship-is-not.html