Canadian residents hit by Trump repatriation tax dealt a new blow https://t.co/67uLAfhGkh #cdnpoli #tax #TaxReform
— Elizabeth Thompson (@LizT1) August 13, 2018
Another good article by the Elizabeth Thompson. It would appear that compliance with the “transition tax” is getting more and more difficult. The article begins with:
Thousands of Canadian residents hit hard by a retroactive tax signed into law by U.S. President Donald Trump have been dealt another blow, CBC News has learned.
Newly proposed regulations issued by the U.S. Treasury Department and the Internal Revenue Service threaten to increase their tax hit.
“You have to almost empty out your company and pay a lot of Canadian tax to avoid the U.S. tax,” said Kevyn Nightingale, a partner with the accounting firm MNP.
Interestingly, Ms. Thompson does reference the Solomon Yue American Chamber of Commerce meeting this Thursday August 16 in Toronto.
The comments seem less vicious today (at least so far).
I feel sick. I’m not affected by this in any way, but I feel sick for all those who will now suffer greatly.
I’ll be so relieved when I have my own CLN and I don’t have to worry what comes out of the USA anymore.
US Citizenship = debtor’s prison. An excellent analogy, USCA!
A windfall for Canada? Jack Aubry with Canada’s Finance Department can be reached here:
I find it odd that the article isn’t more specific about the ruling – just sort of claims that something bad has happened, with no details. Not that it impacts me directly.
My two complaints are similar to what I said last time she wrote.
Not enough emphasis on dual citizens being Canadians who for whatever (silly) reason are US tax compliant, not globe-trotting US expats etc.
No mention of the fact that the vast majority of duals are safely non-compliant and likely to stay that way. As they should.
The comments are pure idiocy, as ever.
I think it’s important to focus on/appreciate how difficult it actually is to get coverage, even after all these years. Elizabeth has been really great about sticking with us.
I like how she uses “Canadian residents” which for once, sees us as Canadians first. We will get nowhere until CDNs stop seeing us as Americans first.
I think it would be unlikely to see any indication from any major media that it is “safe” to be non-compliant. In spite of the fact that it is true. That’s what Brock is for! 😉
“….Those hit by the tax can elect to pay it over eight years — but the new guidance says those who renounce their U.S. citizenship have to pay it immediately.”……..
Surely that is further movement into firmly unconstitutional territory – posing an even higher and unwarranted barrier to renunciation or relinquishment – over and above the already high and unwarranted barrier of the now 2350. USD fee. And a further clear abrogation of the international human right to freely choose where to award one’s citizenship allegiance (Article 15 of the Universal Declaration of Human Rights states that “[e]veryone has the right to a nationality” and that “[n]o one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality. ………..” https://ijrcenter.org/thematic-research-guides/nationality-citizenship/ http://www.un.org/en/universal-declaration-human-rights/index.html )
Next time she should interview someone here for an alternative opinion.
Badger: I like very much the way you have stated your human rights point about the new regulation’s impact on a person’s choice to renounce. I will highlight this next time we remind the UN that we are still waiting for them to hear our case.
Even if she did interview someone here she would be very unlikely to publish something which suggested non-compliance is ok.That amounts more or less, to suggesting people do something which is illegal. She would take something from the interview and omit that part or else not publish any of it. I have never seen any interview published in its entirety. The only way around it is to be interviewed live. I am not defending the position but it’s reality. It’s happened to all of us…..
“Even if she did interview someone here she would be very unlikely to publish something which suggested non-compliance is ok.That amounts more or less, to suggesting people do something which is illegal.”
There is a difference between saying that non-compliance is OK and saying that non-compliance is necessary.
On the other hand, sometimes the Canadian government says that non-compliance is OK. For example when the non-complier has Eritrean citizenship instead of US. Or if a Saudi woman wanted to drive in Canada before Saudi Arabia legalized it, or maybe go outdoors without a burka.
The TCJA has left many Americans abroad with corporations where they live no other choice but to not comply. I suspect that Ms Thompson would be cover that too.
What do you think the IRS’ response would be if people with corporations just stop filing? Would the IRS pursue them like they did poor Mr Dewees for NOT filing the same form? Keep in mind that Americans caught in the Repatriation Tax are only in trouble because they file F5471. The fine for not filing a 5471 is $10,000 per year.
Fair enough, on an ideal level. However, given the Canadian government’s insistence (remember the Standing Committee on Finance hearings in May 2014?) that the U.S. is justified in taxing it’s own as it sees fit, plus treaty issues, I don’t think it applies here.
Don’t get me wrong, I don’t like this. I wish there were a way.
As Nononymous said, the comments are hopeless. It is difficult to believe that Canada has an education system at all; none of these people seem to be able to read. If that is the case, maybe we are all spinning our wheels when it comes to worrying about content. Honestly…………
Somehow the message that’s getting out is that Americans are starting corporations in Canada to avoid paying US tax. Yes, it’s clear that some of the readers commenting aren’t reading the article, but it would help if we were conveyed to be more than Canadian “residents”. Many of us are born in and spent our entire lives in Canada.
Many commenters also fail to realize that those who are caught in this are only in potential trouble because they file US taxes! Can we presume that since only 80% of Americans abroad file US tax, that 80% of Canadians with US Citizenship who own corporations in Canada have little to worry about (if they even know about it all)?
Sorry about the typo’s but I’m sure anyone reading knows what I mean to say 🙂
oh, they are fixed!
Curious, who says 80% of Americans abroad file taxes? This is not true at all……..
This is a notty problem. Someone’s editory nottily lost a not. Also isn’t it 90% not 80%?
No that’s not it. Someone meant to say that 80% (isn’t it 90%) DON’T file US taxes, so how did that “only” get in there?
The article isn’t clear about why taxes have gone up – I am guessing because owners of Canadian corporations will have to pay more in Canadian taxes to be able to use them as a credit against the US taxes. Can anyone explain?
Canada was the us empire’s lackie. They signed for FATCA, renounce or deal with usa reality. Who’s the « shit hole? »
Sorry, meant to write that 80% of Americans abroad don’t file taxes (or only 20% file). Of course it’s only an estimate from dubious sources anyway. The first 80 should have been a 20.
That’s my understanding.
So frustrating…read the article and commented yesterday. Canadians and Americans alike still seem to think that we, dual citizens are rich fat cats hiding money, practicing tax evasion, don’t want to pay our fair share, etc. Most people commenting weren’t reading the entire article, don’t know about FATCA or they were trolls. Or somehow it was Trudeau’s fault and made it about Liberal bashing. OMG. And yet, I am constantly meeting people who have renounced or they know someone who did. I met three ladies from the US recently in Victoria who were going to Prince George to visit friends. Their friend had renounced.
Ann#–americans were (98.7%) likely brain damaged. Most do not travel (IF they do–it’s an 9 day cruise ship, or on a anglo-phile tourist van). The key is likely to remain focused and do not engage americans in any form of communication or commentary. Their ‘country’ was a cult and instill since age 2 heavy does of brainwashing greatness, amazing yammer with woeful education, and you get what you encountered on that website. These are your neighbors, these are the people in the grocery store, these are your family, friends, etc…americans=brain damaged and heavily brain washed. They simply can not thk critically, and it’s intentional. Keep’em down on the usa farm–and that’s why most are addicted to screen starring, narcotics, non prescriptive meds, tee vee, work addictions, pornography, —when you have huge student loan debts, no affordable uni health insurance, no job security (employment at will usa doctrines), no affordable long term care, no real retirment–then you get a whole lotta nothing–usa style.
IF you dare sharply criticise, or construct an argument based on sound evidence re: the usa contruct–hustling, huckstering, endless imperialism,etc…, they react like an angry drunk with fierce jingoisms, misdirects, ad hominem attacks, and rage.–it masks their overwhelming depression and emptiness.
They likely have Cluster B mental illness (borderline, narcissistic, psychosis which prevents them for looking inward and self reflection, and most importantly being grounded in reality. The wool was their eyes, and that’s how they see the outside world. Keep the faith and renounce. Give the middle finger to CBT and FATCA.
I think most of those commenters on the CBC article are Canadians, many of whom have disdain for Americans and corporations. Heaven help those who have both.