Don Cayo, a reporter for the Vancouver Sun (and has covered some of our issues in the past) has jumped on the bandwagon, criticizing us for mounting the charter challenge. His source, Warren Dueck is a CPA/CA located in British Columbia. (More of his viewpoint is available on his blog).
If you think a policy requiring our government to give such personal information to a foreign taxman won’t withstand a Charter challenge, Dueck concedes you may be right. But if you think this would be a good thing, he disagrees.
The problem is that if our institutions won’t — or can’t because of privacy laws — give the IRS what it wants, 30 per cent will be withheld from all U.S. transactions.
“This would be a devastating result for Canadian financial institutions and their customers who exchange hundreds of millions of dollars daily with U.S. individuals, businesses and other entities,” Dueck wrote to clients.
Ditto if you tell your bank to buzz off when it asks about your citizenship, except you’ll shoot only yourself in the foot by subjecting only your own earnings to withholding.
Dueck says there’s little chance any money withheld by the IRS could be applied against Canadian tax owing, and the only way for you to get it back would be to file a U.S. tax return, then wait for months for it to be processed.
Ottawa has been accused of selling out by agreeing to this, but once again Dueck disagrees. Without the agreement, he said, financial institutions would still face a no-win choice of either providing information about clients or having earnings withheld. And, while the agreement excludes earnings on such things as Registered Retirement Savings Plans, Registered Retirement Income Funds, Registered Educational Savings Plans and Tax-Free Savings Accounts, there’ll be no such exemptions if court challenges succeed in overturning the agreement.
Some of the Brocker SWAT Team (Special Writers and Authors) have already commented on the blog.
What do you think?
Hat tip to Tim for finding the article.