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The Isaac Brock Society

Financial Post hits a new low in FATCA reporting

Posted on by Posted in Issues regarding US persons abroad 65 Comments

In a new “Special to the Financial Post” advertorial that makes Barrie McKenna look like Woodward and Bernstein, über compliance condor Max Reed attempts to reassure “American citizens in Canada” that they have nothing to fear, except perhaps some red-herring nightmare of IRS goon squads swarming across the border to seize their homes.  It is a tour de force of utter nonsense and, sadly, another disheartening example of what now passes for journalism in Canada.  Here are a few tidbits, displaying all the comforting factuality of a PMO press release:

Don’t panic, American citizens in Canada: The IRS is not coming to seize your house

To get on the IRS’s good side, take advantage of the amnesty program called “Streamlined Foreign Offshore Procedures” (which you can find on the IRS site). It will help you catch up on overdue tax returns without fear of penalties.

U.S. citizens in Canada are only subject to U.S. federal tax. (The Canadian taxes you pay are credited against your U.S. taxes.)

Unless you have U.S. source income, you will not owe anything.

The deadline for filing a return in the U.S. is April 15, but can be extended to June 15 for those outside the U.S.

Intriguingly, this is just part one of a spring series of helpful articles for “One million American citizens in Canada.”  It is difficult to imagine just how much more useful advice Max Reed can offer than he does in his first instalment.

Comments are wide open.

http://business.financialpost.com/2015/03/06/dont-panic-american-citizens-in-canada-the-irs-is-not-coming-to-seize-your-house/

65 thoughts on “Financial Post hits a new low in FATCA reporting”

  1. Over simplification! Although they can not collect in Canada, no jurisdictional authority! If one enters the US with unanswered requests,.. you may be in for a long stay.

  2. Thank you Calgary411 for reminding us about Max Reed’s participation in the Canadian Standing Committee on Finance’s meetings prior to the passage of Canada’s FATCA IGA:

    http://openparliament.ca/committees/finance/41-2/34/max-reed-2/only/ – Max Reed, also of Canadian IGA hearings before Parliament fame when he was practicing U.S. tax law at White&Case LLP, an international law firm based in New York City.

    https://isaacbrocksociety.ca/media-and-blog-articles-open-for-comments/comment-page-126/#comment-5703115

    FYI, SKL where Mr Reed now works, is where I’ve been doing my taxes since this nightmare began. I sent the article over to its founder and our accountant suggesting they read the comments.

  3. @Bubblebustin: Thank you for bustin’ Mr Reed’s bubble. Such misleading information needs to be called out and shown for what it is. It makes one wonder whether the publication is a deliberate attempt to entrap desperate people hoping that the information is in fact so. Such publication should shame any reputable professional organization. Is he a member of the Canadian Bar Association ? or a US Bar Association ? or any similar organization / regulatory agency ?

  4. “One million American citizens in Canada”

    Horse feathers!!!!

    Its One Million Canadian Citizens in Canada!!!

    Calling a Canadian Citizen in Canada anything and I mean anything other than Canadian is downright offensive and racist. They need to be called on the carpet for this and evertime they make a comment like that they need to be called a racist.

  5. Oh look! another attempt at a smear article to try to cloud people’s judgement. This is becoming very typical in the fight for our sovereignty and protection from a foreign country’s attack. The author was likely asked to dumb it down and make it look attractive like it is no big deal. Can’t say that I blame them as this is the only way they can sell this crap to Canadians. It is our job to right these misinformation articles and tell it like it is. Paid actors like Mr. Reed will be exposed for who they are and who is supporting them.This is no game, this is real and the clear reason we are ALL supporting this fight with the government representatives in Canada who clearly committed treason.

  6. @Deckard, I just sent a short letter to the Editor of the FP focusing just on one inaccurate statement (“Unless you have U.S. source income, you will not owe anything”) and asked that the statement be retracted with apology. I suspect that FP will go back to Reed for clarification and will be forced to make a retraction.

    Others (from any country) may wish to send in comments with the hope that your letter might be published in the FP/NP print edition for maximum exposure. The letters need to be very short and you will be asked for your name etc.

    See:

    http://www.nationalpost.com/contact/letters/index.html?name=Letters

  7. I just noticed that the inaccurate Max Reed article was also published in the print version of today’s (Saturday March 7) Financial Post section of the National Post. The first page of the FP directs “U.S citizens living in Canada” to the (lead) article. This means that even more people will be exposed to the misleading messages.

    If you are not afraid of disclosing your name send a brief letter to the FP. It would be helpful to have some letters sent from those who live outside of Canada.

    http://www.nationalpost.com/contact/letters/index.html?name=Letters

  8. Thank you for making a post of this, Deckard. And thank you for this comment and suggestion, Stephen. I have just successfully submitted what I tried to yesterday (Clue: SLIDE TO COMPLETE instruction means “slide the arrow all the way to the right to submit” which I apparently did wrong yesterday.)

    Regarding your March 6, 2015 article, “Don’t panic, American citizens in Canada: The IRS is not coming to seize your house”…

    Printing and probably reprinting in other publications (like now in print at the National Post) this inaccurate piece of information in the Financial Post that is so needed to be reported correctly to *US-defined US Persons in Canada* is nothing but irresponsible.

    Again, you have not checked the statements presented by the author. Globe and Mail, Rob Carrick, seemed to get it correct on this very subject: January 12, 2015: “If Americans living in Canada sell a house for a gain of more than $250,000 (U.S.) per taxpayer, they must pay capital gains tax on it.”

    Please read all of the comments presented on this piece by your US tax compliance lawyer, Max Reed, who is among those who have moved to Canada most likely to reap the rewards of Conservative omnibus Bill C-31 implementation of US FATCA that makes Canada’s *foreign financial institutions* arms of the U.S. IRS.

    There are one million or more *US-defined US Citizens in Canada*. Add to that number of CANADIANS those who are related — spouses, children, business partners, etc. — this affects a whopping lot of people who need correct and responsible information.

    Please retract or correct the errors noted by commenters to Mr. Reed’s piece. And, consider perhaps someone else with accurate information giving the Financial Post’s *spring series* on this subject.

    Very irresponsible and shameful that something like this AGAIN passes as journalism at the Financial Post.

    Thank you for your time.
    Carol Tapanila

    I am so angry that ANY Canadian will read this and believe that *US-defined US Persons in Canada* / *Americans in Canada* are worrying needlessly as we try to get correct information to the people who need it. As we are told by anyone that we ask questions that we should consult with a US tax professional, that this misinformation affects the decision of even one such person is tragic. The Financial Post / National Post should be in no position to offer tax advice to vulnerable *US-defined US Persons* when the consequences of US citizenship-based taxation are so severe and costly.

    To me, this echos the words of former US Ambassador to Canada, David Jacobson, http://canada.usembassy.gov/ambassador/news-and-speeches/18-october-2011-ambassador-jacobsons-remarks-to-the-canadian-club.html

    And given our budgetary problems, the United States wants to make sure we are paid all the taxes we are owed. American citizens shouldn’t be able to avoid their tax obligations by establishing a residence in a tax haven.

    There are two particular problems with the operation of these rules here in Canada. First, there are so many dual citizens, typically by birth, probably more than a million. So this issue is much more common here than in any other country in the world.

    Second, the penalties — at least in a theoretical sense — can be quite severe.

    So you could have a situation where some 70-year-old grandma:

    – was born in the US;
    – moved back to Canada as a young child;
    – never earned any money in the US;
    – has no assets in the US; and
    – dutifully paid all of her taxes in Canada.

    She didn’t file a US return because she didn’t think she had to. And because she didn’t owe any US taxes. Nonetheless, grandma could be theoretically subject to serious penalties. To my knowledge we have never gone after a grandma in those circumstances.

    But there has been a lot of press about this lately and people are worried that we will come after them.

    When I read all of this I was concerned. So last week I called the Commissioner of the United States Internal Revenue Service to see what we could do. I explained the problem to him.

    The result is that both he and I are sympathetic to the concerns. We are going to work together to see if we can’t find a way to accommodate grandma — and others — here in Canada. But we have to figure out a way to do it without letting the person who is trying to evade taxes in the Cayman Islands off the hook.

    My message on this one is to sit tight. We are not unreasonable. We are not unsympathetic. We are not irresponsible.

  9. Other US tax information from Max Reed at http://www.skltax.com/blog/ I have not read any of this yet.

    Doing a search of the title of the Financial Post / National Post article will show some of the other places where Max Reed’s article “Don’t panic, American citizens in Canada: The IRS is not coming to seize your house” is already picked up / republished to confuse and misinform even more people.

  10. letter sent to the editor of the FP

    i was having a great day till i read the article and realized just how many things were wrong with it……i feel bad for the people who read it and assume all is well…..

  11. I’m sorry but this journalist’s article smacks a bit like when the Jews were walking into the ‘work camps’ reading ‘Arbeit Macht Frei.’

    Max Reed needs to be educated.

    If nobody owes ‘taxes’ why on earth does the IRS need resident Canadian citizens financial data?

    Max also fails to mention today’s FATCA won’t be tomorrow’s FATCA because the US can change the rules at a drop of a hat.

    His argument is naive at best.

  13. This is yet another self-serving infomercial from a blood-sucking US tax-compliance leech trying to drum up more business for his firm. This so-called article should have been placed back in the classifieds section along with the condom ads where it rightfully belongs.

    I used to read the Financial Post but now that they allow crap like this to see the light of day they have totally shredded their credibility. I won’t bother going back.

  14. The IRS may not for the moment seize your house but for certain people, the IRS wants 23.8% of the net proceeds of the sale of your home.

  15. Dear Financial Post,

    You want to sell a few more newspapers? “One Million Canadian Citizens Exposed to I.R.S. Confiscations” would sell a few! Seeing a headline about Americans makes many Canadians just turn the page. I would have thought you’d have figured that out by now!

    (If anyone out there agrees with me feel free to post the above in the comment section to Max Reed’s article.)

  16. A reasonable journalist would be able to piece together the comments to this article to formulate an accurate article — of course, first, checking the facts with one of those US professionals the IRS Help people tell us to consult for tax advice as our questions are too complex for them.

    The Financial Post article doesn’t even have a courtesy disclaimer to its readers, as is always given by US tax lawyers such as Phil Hodgen:

    “Routine Disclaimer: I am not your lawyer, and this is not legal advice to you. If you need help, please hire someone who can advise you.”

  18. I also left the following comment:

    “This spring, a new tax law hangs heavy over U.S. citizens who call Canada home.”

    The only things that hang heavy are the craning necks and beaks of compliance condors like Mr. Reed, who sit perched in their ivory towers, contemplating all the delicious billings they can enjoy at the FATCA feast spread before them.

  21. Yes, Tricia, I seem to recall that. He has Gerald Keddy-itis, in that there’s the notion that this doesn’t impact Canadians.

  22. Thanks, Trish. That fact mixes things up and may inadvertently give more credence to using professionals who are actually US. Somehow we must get out of this byzantine US citizenship-based taxation nightmare we are experiencing in Canada and around the world.

  23. @Bubblebustin:
    “GeraldKeddy-itis”
    Just MADE my day!!
    Unfortunately, they ALL have “GeraldKeddy-itis” and the Financial Post and National Post do not even realize it.

  24. @calgary411

    Don’t worry, I’m sure the compliance condors agree that there are plenty of billings to go around, no matter which side of the border they’re perched on. And, honestly, are any of them innately more or less qualified because of their own nationality? Careful, or we might have to witness the spectacle of condors claiming national origin discrimination, lol.

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