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.”