Here is a comment from a cross border tax specialist
Petros, $250-$300 for a cross border US tax return an accountant that does not understand cross border tax. A good tax accountant would not even prepare a Canadian return for that fee. Check what H&R Block is charging for Canadian tax returns and remember they are essentially uneducated form fillers.
Perhaps you’ve noticed the complexities involved in filing a US tax return while living, working and investing in a foreign country?
There are considerable differences in a number of income items – the calculation of capital gains for example. How about Form 3520 which is commonly applicable to “average” Canadians? Form 5471? Again not an uncommon form for a Canadian. How about PFIC issues – do you know about those? Should you claim the Foreign Earned Income Exclusion? There’s a very good reason not to claim it. And don’t forget to add in Form 8938 this year. How about the time it takes to explain to the clients the issues on their returns because they want to understand what’s happening their tax returns and explain the differences between the Canadian and US tax return.
As a cross border tax specialist I’m tired of the comments that people are being gouged on fees. Most have no idea of the complexities involved their tax returns not to mention the education and knowledge required to be a cross border specialist.
How much does a plumber charge per hour? Looked at the shop rate for getting your car fixed lately? Ask Moody’s what the hourly rates are for their staff or what their quote was for the 2011 OVDI program. $700 for 3 Canadian simple, salaried employee returns = $233 per return. And you think that a US tax return should be $250 – $300?! You clearly have no idea what is required to be a tax professional and it would seem not a clear understanding of what is required to complete a US tax return for someone living, working and investing outside the US.
Ok enough ranting back to work.
The EU should take the position that they don’t need an exemption because this law and anything similar will never receive their approval. They should tell Washingto to just move on and keep its problems on its shores.
We can only hope. I am thrilled to see a political grouping (ALDE) that has been consistent in opposing overbearing US legislation. At the very least even if ALDE isn’t successful no matter what happens we can be sure that the EP will take its time to analyse the legislation. I wouldn’t be surprised if several national parliaments have already come out or planning to come out enthusiastically in support of FATCA after only limited debate and discussion, (I’m looking at you France and UK!) so thankfully we can resort to the EP to actually examine the legislation a bit further. It is also reassuring to know that even in the worst case scenario a dual EU/US citizen could potentially drag FATCA and citizenship taxation to the ECJ. See this excellent post by Victoria and the article that she cites for more info:
For one thing the EU is as of yet getting nothing back in return(Something called DATCA has been proposed the IRS to require US banks to report information on EU residents with accounts in the US however, this has encountered heavy domestic political opposition in the US including from some Liberal Democrats from Florida for example where most of these account are held and its still unclear when it might come into effect.) Even if the EU were to get back info on its own residents from the US the info the US is proposing to give through DATCA is far more limited than what it wants to collect through FATCA. Any info the EU would get through DATCA would come through the IRS whereas the IRS want to deal direct(at least as of now) with European financial institutions. Plus you have the assymmetry of the fact the EU27 countries tax only on residence(I believe the ECJ has ruled citizenship based taxation is against the Treaty of Rome at least as to application to an EU National of one member state living in another member state).
On this front several comment letters sent to the US Treasury I have seen by various EU financial insitutions indicated they believed it was highly unlikely the EU Commission would ever allow data transfer of account information held by US Persons residing in the the EU/joint accounts with EU nationals/US EU member state dual citizens/US persons with “EU” citizenship etc. to be transfered to the Washington despite the US desires to tax its citizens based on nationality(Something that is allowed under the Double Taxation Treaties the US has signed with most EU members; Amendments to the Luxembourg and Hungary treaties are being “held” in the US Senate by Rand Paul son of Ron over his concerns info being given by the US to LU and HU making this whole thing even messier). Now I’ll say this is coming from different trade groups and financial institutions not the EU commision itself but I have believe it is somewhat based in reality. The letters basically called the US Treasury to “forget” getting information on US citizens living in the EU “because it aint goin happen” and instead focus issues such as life insurance policies issues to an EU resident who later moves to US for example.
Familiarlizing myself more with EU privacy law it seems FATCA is very much a breach with no easier way around it. Nor does it seem to the US has as much of case for getting the data as it did with “SWIFT” and passenger name records. You also have the fact this is clearly under the European Parliaments co-decision powers under Lisbon which was not exactly clear with SWIFT and PNR.
@somerfugl — re ‘I’m writing a lot of letters, but doubt if we’ll get any help.’
…My latest comment to a journalist to whom I asked a question regarding RDSPs, RESPs, TFSAs —
…Which makes all dual citizens in Canada second-class citizens, right, at least for our investments, our retirements, our taxes?
I have not been able to get advice from the IRS, from the IRS Tax Advocate, from my financial planner, from my government representatives, from the US Ambassador to Canada – it all goes in a circle and the easy answer – ‘get advice from a US tax accountant’. I do get my US taxes (and Canadian taxes) prepared through a cross-border accountant and it is probably my mistake to not have asked the right questions in the first place, but here I am, as are many others, in trouble and also called by the US and even many in Canada, tax evaders.
Why isn’t there more of an outcry from the US citizens/persons, duals in Canada even with all the IRS instructions we’ve been given, assurances by Ambassador Jacobson, etc.? I believe it is because a big portion of us in this situation cannot afford to go to a US tax accountant, that is even if we can find one that is qualified to help us. I have engaged professionals, not because I can afford to – but because I cannot figure out the instructions, the forms, etc., etc., of the IRS, thereby being subjected to huge penalties for any mistakes I would make. The stress of this for families is unbelievable.
These issues, along with the cost of administering tax compliance with tax professionals because the IRS provides no service to the US expats, is addressed in the TAS Report to Congress ( http://www.taxpayeradvocate.irs.gov/Media-Resources/FY-2011-Annual-Report-To-Congress-Full-Report / see International section, as well as others ) . Also, http://www.irs.gov/newsroom/article/0,,id=252284,00.html / see Taxpayer Bill of Rights – we in Canada are at least missing the following: (1) right to be informed (3) right to be heard
6) right to certainty (10) right to a fair and just tax system .
So, many US persons in Canada continue to be hunkered down, heads in the sand, hoping and praying all of this will not affect them – these are hard-working, tax paying Canadians, now afraid to cross the border, etc., and many, like me, choosing to renounce my US citizenship (which I actually thought I had done when I took my oath of Canadian citizenship in 1975 and at that time being warned that I would be relinquishing my US citizenship). In those times, most did not know of a Certificate of Loss of Nationality so we have no proof of anything that happened, other than our citizenship cards. The US changed the rules midstream so now we all have the millstone of US citizenship around our necks – and the necks of our children born in Canada (and others). This is the cost of US citizenship-based taxation, rather than that of residence-based taxation for most all of the rest of the world.
It is insanity and it is immoral. Who is to stand up for us – I had hoped the Canadian government would and I do appreciate what I’ve seen in the media from Finance Minister Flaherty but as far as I see it is not continuing and it is not enough. I have written to my MP, the Finance Minister, the US Ambassador to Canada and the Canadian Ambassador to the US. I have gotten acknowledgements of a couple of of my letters (my MP and one from Minister Flaherty’s office) but no conversation advising on what they might think or actions they are taking on these matters. My only hope is that something is going on in the background that will really solve some of these inequities, perhaps in an updated Canada/US Tax Treaty. It is better than me believing that my concerns are just being ignored.