I personally think that the folks who try to run and hide are going to get it. The works — fines, possible criminal prosecution and possible deportation from the host country. And it’s so easy to find us. Victoria
A lawyer who presented to a group on the topic of U.S. taxation of Canadian residents recently offered up the colorful phrase full ostrich to describe noncompliant persons whose strategy remains that of keeping on keeping on.
A Globe and Mail poll from fall 2011 showed over half of 3233 responders “planning to deal with the IRS cross-border tax crackdown” by opting for “Nothing, how will they find me?”
In the short term, that approach will continue to work. It may even work in the longer term for Canadian-resident U.S. citizens who (1) do not have a U.S. place of birth (2) are prepared to avoid U.S. jurisdiction by never entering the United States, whether intentionally or accidentally, and/or (3) manage never to reveal a U.S. connection to institutions that hold their financial accounts.
But a pair of pliers is already in view. One of the jaws is passport; one of the jaws is dealing with the financial institutions in a globalized economy. As far as many insular residents of the United States are concerned, this tool of torture and extraction does not even exist. But extraterritorial U.S. citizens are forced to live in a far different world.
Anecdotal evidence continues to amass that border scrutiny is happening now and that financial institutions are taking an interest in the citizenship status of their customers. In the past ten days we have report of at least these three incidents:
outragec on March 1 — “I called my investment firm yesterday to advise that I no longer wished to invest in any US funds. They asked me if I was a US citizen.”
CanuckDoc on February 25 — “I just had my yearly meeting with the advisor of the investment account I have had for over 25 years. She asked me if I was a US citizen, which she has never done before. She says she is now required to ask all her clients.”
Broken man on a Halifax pier on February 22 — “Was asked specifically at pre-clearance at Pearson (once they’d established that I was a USC born and still living in Canada) today whether I’d been filing tax returns.”
It’s all so absurd. Don’t, don’t get a US passport!!
The best to you, somerfugal
@Tiger, True North, Blaze, and calgary 411. Thanks for the information and advice. There is a lot of to think about, and as you say calgary411 it’s all so absurd!
Do not do it.
Visit a nice place in Canada instead, get Canadian citizenship, and you and your son pledge unallegiance to the USA every morning. You will be better off for it.
I was born in the US but have lived in Canada since 1965 and have only ever had a Canadian passport. I traveled from NB to ON by car three weeks ago and intentionally went through the US to see what would happen at the border.
I gave my Canadian passport to the agent and he asked if I also had a US passport. I replied that I did not and had only ever had a Canadian passport. He wished me a nice day and that was it. That is not to say that things will tighten up over time, however!
@TrueNorth: My understanding is also that, if one relinquishes now in 2012 he can wait until June 30th 2013 to file 8854. I greatly appreciate confirmation from more experienced members in this forum?
But I believe, one must still file for five years (2007 to 2011) of taxes and part of 2011 until the date of relinquishment. But it may reduce one year FBAR, since FBAR statue is only for six years. If one files 8854 now he needs to file FBAR from 2006. But he waits until 2013 he needs to file FBAR from 2007.
Also I like to find which one is safer? Filing five year taxes before relinquishing or after relinquishing? What are the pros and cons?
@JoeSmith, it is not for pleasure BELIEVE ME if I told you the reason I was going you would really think I am nuts..
@saddened123, if your child is a minor and you’re traveling without the other parent your circumstances raise alot of red flags. I’m thinking at a minimum you may not be allowed entry into the US even though you have a US passport due to the increasing number of child abductions. In the worst case you may be held for questioning.
@all. Just a quick update. My investment counselor did seem to accept that I was a Canadian citizen, when I explained the ‘prior-to-1986’ thing, as well as the US supreme court justice decision (terrazzo??) that said they couldn’t retroactively reclaim citizenship. I did not have to offer any proof or anything else. He seemed willing to accept that I knew more than he did on the whole thing. He was very up on taxes, but not the reporting or US citizenship issues. However, that’s now, who knows what will happen in 2014….