Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 47 Comments

Well, as confirmation of how confusing this all is, the article reports that:

On the one hand:

Canadians with U.S. citizenship, who may not have paid taxes in the U.S. for decades, still qualify for the Trump administration’s one-time pandemic support payment.

Q. Is he talking about Canadian’s who don’t pay US taxes or who don’t file US taxes?

But on the other hand:

In order to get the payment, Canadians with dual U.S. citizenship and U.S. citizens living and working in Canada must have filed a tax return with the Internal Revenue Service for 2018 or 2019 reporting their global income.

Well, as been discussed endlessly at Brock, people actually don’t have to file US tax returns to be theoretically entitled to this.

The plot thickens

In some cases, people who qualify for the payment can also get the full U.S. COVID-19 benefit payment while earning substantially more per year than they would if they lived in the United States because of special tax exemptions only available to American ex-pats.

Yup, it’s absolutely true. This is the result of Americans abroad (living in Canada) may be entitled to the benefits of the Foreign Earned Income Exclusion. This means that their AGI tally doesn’t start running until their income exceeds the FEIE limitation. Look’s like Congress wasn’t aware of Americans abroad. Who could have known?

And The Obligatory Comment From Democrats Abroad:

“Most of them are surprised, really surprised about it, because … there are people who’ve been here 40 years and they’ve never gotten a cent from the U.S. government, except some who get U.S. social security cheques, and they aren’t many — and now all of a sudden they are getting $1,600,” said Ed Ungar, co-vice chair of Democrats Abroad.

“They are really happy to get it, but it wasn’t something they counted on.”

Ungar said he does not know of anyone who has received the payment but said most of the people he’s spoken to are convinced the payment will arrive within six months.

Somehow this reminds me of the play “Waiting For Godot”.

When Government Giveth, Government Usually Taketh

All indications are that …

1. Because the US payment is administered as a tax credit, it is NOT considered to be taxable income in the United States (how cool is that?).

2. But, Canadian residents (which I think includes Americans as long as they are Canadian residents) are required to include their CERB payment in their Canadian taxable income. (How unjust!! Don’t renounce your US citizenship yet.)

What will you do with all the found TAX FREE money?

Many Brockers advocate for using it to pay the fees to renounce US citizenship.

What about donating it to fund one of the anti-FATCA lawsuits?

By the way, comments to the article are presumably open.

47 thoughts on “CBC reports the entitlement of Canadians to US COVID-19 relief – how will you spend your payment?”

  1. I have been asked for advice from someone who is no longer a US Person-Citizen: What to do with the stimulus cheque which was received but should not have been sent, and which is now a liability.

    The cheque should be returned in a certain way.

    John Richardson covers this in a link below which might already have appeared on Brock.

    My suggestion also is that you also keep a photocopy of the voided cheque and all paperwork (dated explanatory note, etc.) that is sent.

    The link:

    https://www.quora.com/How-may-I-return-the-stimulus-2-400-back-to-IRS-we-my-wife-I-know-that-we-are-not-qualified-because-of-our-visa-IRS-is-not-responding-to-our-calls-and-emails-What-are-the-consequences-we-may-face-Please-advice/answer/John-Richardson-269

    From the above:

    “…The statute authorizing the relief states clearly that nonresident aliens are NOT eligible[1]. Shockingly, individuals who are no longer US citizens (because they renounced citizenship) and do not live in the United States – making them nonresident aliens – have received checks[2].

    Clearly these payments need to be returned to US Treasury. The general instructions to return the payment are found here – Q. 48:…”

  3. I, too, received the “Economic Impact Payment” with “President Donald J. Trump” name affixed to show me “he” made this possible. I followed John Richardson’s instructions and the cheque marked VOID on the front and back yesterday was mailed back to the Internal Revenue Service address in Austin, TX.

    (VOID one year from date of cheque.)

    It was mind-boggling and distressing after all the expensive steps I took to erase my US citizenship status that the US does not have the correct information from the Federal Register in 2013 that I am no longer a US citizen and do not live in the US. I, personally, would think persons such as me should not receive a cheque funded by taxes from US citizens that I, personally, would think should be meant for the many who are struggling within borders of the USA, rather than sent to a foreign address or forwarded to a foreign bank account to help the economic impact of foreign countries in these strange times.

  4. Given the number of renunciants who would have filed for 2018 or 2019, they’ve probably made a several thousand of these payments. The number of former green cards could be quite a bit higher. With changes of foreign address many cheques may never reach their destination. And while a cheque in the mail is a fairly obvious thing for the recipient, direct deposit might go unnoticed if it is sent to a dormant US bank account, particularly if the follow-up letter never arrives.

    I very much doubt that the US government has there wherewithal to follow up on this.

  5. What follows is the content of an email sent to me from a person who was a frequent participant here at Brock until recently. She gave me permission to share it with all of you. It is news, directly from the source. It’s a tad long for a comment but I thought this the best place to put it:

    Hello News agencies, Democrats Abroad and others,

    I was born in Washington, DC almost 75 years ago but moved to Canada in 1969 to follow my spouse (also a US citizen) who was taking a first post-PhD job here. In little time, our children were born here (births were registered at the US Consulate) and we continued to liked it in this “foreign realm” – it became our home – so we ended up staying and staying and staying until we eventually took Canadian citizenship in the mid 1990s (while still maintaining our US citizenship).

    Then, when the scourge-to-the-world FATCA was introduced, the privacy of our finances were going to be further invaded on a lie of reciprocity to the CRA and every other country’s tax office) and US tax reporting became +++++++++ more complicated (something spouse, as a Professor of Economics, had never minded doing over all those many years, even the cross-border calculations), and with our children having chosen to remain in Canada well into their adulthood, even tho they had dual citizenship and could have moved to the US, both spouse and I (after 40 years here) decided to renounce our US citizenships (who needs this FATCA CR*P????).

    So, despite the many factors, accounting considerations and months of time involved, these renunciations legal documents and hurdles were accomplished in 2012 and 2014 (after the cost at the US Consulate was virtually nil but before it suddenly with little notice jumped to the globally outrageous $2,350 US – – our cost was still around $400 US$).

    Now, today, almost 8 and just over 6 years renounced – – and not having personally filed anything with the IRS in all this time (and each of us having received full confirmation documentation that the renunciation process was officially completed, all last tax forms received, no word of goodbye but here’s your no-longer-valid passport back, and we have no feelings/questions at all about why you two are turning your back on the good ole rah-rah USA), spouse and I each just received in the mail “Economic Impact Payments” from President Donald J Trump ($1,200.00 each, signed by Vera S Robinson???)!!!!!

  6. And now it looks like they are sending cheque’s to people who renounced many years ago. Well done, US government! Enjoy your free gift, former citizens!

  9. Jeez, some people have all the luck. If the US government is so disorganized they are sending cheques willy-nilly to ineligible recipients, they won’t follow up on those mistakes because they don’t have a clue they even made one.

    If I received one of those cheques, I’d take the money and run, considering it to be fair compensation for all the pain and suffering,

  11. Back to the subject at hand. If any of the people who renounced eight years ago are receiving Social Security, that may be why they are suddenly seeing stimulus benefit cheques arrive in the mail. They are entitled to cash them.

  14. Two questions sparked by inquiries on other fora:

    1. Are any of the long-ago renunciants suddenly receiving US stimulus cheques in the post *not* also receiving Social Security? (Social Security recipients are entitled to the benefit.)

    2. Has anyone seen any definitive answer on whether the stimulus cheque is considered taxable income in Canada? I would assume not, but Google hasn’t yielded any great insights.

  16. Apparently its not taxable in the US. (I remember reading somewhere that the IRS classifies it as a refundable tax credit.) Whether that makes a difference to the CRA, who knows? They would, of course, have no way of knowing whether or not one received one. The CRA does have the better part of a year to rule on the question.

  17. I recently saw this:

    U.S. citizen married to a NRA spanish lady. Wife unexpectedly got a 1200$ check in the mail. She gets spousal benefits 4500$ a year. He files separately but shows wife,s name and SS nbr on his return. She does,t file. She lived the U.s. 4 years, from 1969 to 1973 and never return…

    I don’t specifically recall the details but I think back in the spring when they realized how many lower-income people would miss out on the stimulus benefit because they don’t file returns, they created the non-filer form but also planned on sending to cheques automatically to SS recipients.

  18. Not surprised by that. Since she receives a SS like her citzen husband ,and since their SS numbers are also linked, she may also be included in the stimulus. If both were NRA receiving SS ,they should receive nada.

  19. “I don’t specifically recall the details but I think back in the spring when they realized how many lower-income people would miss out on the stimulus benefit because they don’t file returns, they created the non-filer form but also planned on sending to cheques automatically to SS recipients.”

    Another theory as to why they do what they do is that it conforms perfectly to the application of cbt. Whether you are a homelander or a long lost runaway , you are considered an american taxpayer, whether you file or not, paid or not,whether it is enforceable or not, as such , you are considered to be entitled to the fruit of the stimulus. And if one fine day, the almighty US says to its weak signees to the IGA , I’ve paid out hundreds of millions of stimulus to the xpats overseas. Wouldn’t that kind of tighten the yoke of bondage? But ,of course, you would have left the plantation before that .

  20. Serbinski forum makes the case that if the current stimulus benefit is treated like the 2009 version, it won’t be reportable or taxable in Canada. Nor would it reduce a foreign tax credit on a Canadian return, which can happen with the US child tax credit.

  22. Hmmm. I renounced nearly two years ago, August 30, 2018 (how time flies!), and filed my final returns in 2019. Now I’m curious to see if a cheque will show up in my mailbox.

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