Author Archives: calgary411

This is a second response to a constituent from MP John Weston that has been reported to Isaac Brock: The most recent John Weston reply to his Constituent.

The previous John Weston, MP reply to bubblebustin seemed a bit more forthcoming and hopefully took less than the five months and repeated requests before this constituent received a reply.

What new have we learned from Mr. Weston? I have had a quick look at his website to see if, in fact, there was anything I could find on the issue of FATCA and the negotiations on same by the Canadian government. Perhaps someone else can find what I didn’t see. Why does FATCA not rate a place in Mr. Weston’s Government News?

In this most recent reply, his constituent learned that Mr. Weston agrees with Minister Flaherty that we Canadians of dual nationality are “honest, hard-working and law-abiding people” and the proposed IRS penalties for failing to file IRS paperwork seem out of step with justice and fairness. I do not see anything that leads me to believe that Mr. Weston can understand and convey to his constituents, let alone ALL Canadians who will bear the cost, anything about what FATCA is and what it means for loss of our rights as guaranteed in the Canadian Charter of Rights and Freedoms.
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Accounting Today: Acting IRS Chief Pledges Repairs before Congressional Panel

“The agency stands ready to confront the problems that occurred, hold accountable those who acted inappropriately, be open about what happened and permanently fix these problems so that such missteps do not occur again,” Werfel told a House Appropriations subcommittee.

…

“It seems we have a new misstep every day at the IRS,” said Representative Hal Rogers, a Kentucky Republican and chairman of the full appropriations committee. “I’m very troubled at what may come to light next.”

Rogers said Congress may further restrict the IRS’s funding with fresh constraints.

Congress Unveils IRS Employee Interviews about Tea Party Groups

The committee released excerpts from bipartisan transcribed interviews between Committee Investigators and Cincinnati IRS employees. In these interviews, Cincinnati IRS employees rejected the White House’s claim that the targeting was merely work of “rogue” agents and say targeting of conservative political groups came from Washington, D.C.

“As late as last week, the administration was still trying to say the [IRS targeting scandal] was from a few rogue agents in Cincinnati, when in fact the indication is that they were directly being ordered from Washington,” Issa told CNN’s “State of the Union” program on Sunday.
…
In addition to the two hearings scheduled this week by the House Appropriations Committee and the House Oversight and Government Reform Committee he House Ways and Means Committee also plans to hold a hearing Tuesday in which lawmakers will hear from representatives of some of the conservative groups that had their tax-exempt status applications scrutinized by the IRS’s Exempt Organizations division.

Further to USCitizenAbroad’s comment on my previous post entitled, We want to know once and for all, for sure: Is it true, legal policy, a CHOICE: the US cannot force anyone who is born outside of the US to acquire US citizenship?, I am posting his prior post. Yesterday he added the preface:

“U.S. citizenship is a problem to be solved.”

You may not need to solve it at all!

Hang in for a long read.

Accidental US Citizenship — does it stay with you for life?

More excellent questions and commentary from USCitizenAbroad. Thank you very much!

I am putting this informative comment into a post where it will garner more attention.

SueBee shares that she and her brother were told at the Toronto US Consulate that US citizenship is a choice — they declined the choice!

I wanted to share my brother’s and my experience today of applying for US citizenship at the Toronto Consulate. We are both Canadian born children of a US parent who is now deceased. Given the information we have taken from the internet, IRS and US citizenship sites, we came to believe that we had to obtain US citizenship (we were never registered as born abroad by our US parent). We completed all the paper work, obtained the documents and booked the appointment and attended for that today. We were to be granted US citizenship, however when we advised them that we actually did not wish to obtain the citizenship and in fact the only reason we had come was because we believed the US required it of us they were dismayed. We were told by the consulate officer and her direct superior that they cannot force anyone who is born outside of the US to acquire citizenship – it is a choice. When we pressed her further stating that this is not the information we are getting she advised clearly that we are not US citizens unless we willingly apply for and accept the citizenship. She stated we can say unequivocally that we are not US citizens unless we wish to be. We respectfully declined the offer of citizenship (to their amazement) and left with our refund and documents in hand. I will certainly sleep better and breathe easier! I hope this helps other Canadian born who are concerned about this.

American Citizens Abroad has added this to their site:

Maintain Residence Based Taxation Momentum on the New Web Site for Tax Reform

Maintain RBT Momentum on the New Website for Tax Reform
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Congressman Dave Camp, Chairman of the House Ways & Means Committee, and Senator Max Baucus, Chairman of the Senate Finance Committee, joined forces in May 2013 to launch a new website to update Americans on progress on their tax reform proposals and to allow Americans to share their stories and comments. ACA is very pleased to see this bi-partisan effort to fix the broken tax code. Put this link under your favorites to keep up to-date with tax reform progress: https://taxreform.gov

The inauguration of this website is significant. Both Mr. Camp and Mr. Baucus are determined to produce a tax reform proposal in this Congressional session. They have just 18 months to accomplish a historic tax reform, and it is the last opportunity for both of them as Chairman Baucus retires at the end of 2014 and Chairman Camp must pass over the Chairmanship of Ways & Means at that time.

For Americans abroad, this is our once-in-a-lifetime opportunity to have RBT (Residence-based taxation) adopted. RBT is on the table. We have had positive feedback and will keep up our efforts. Please feel free to add your support for RBT with your personal story.

Roger Conklin, a Director of ACA , has strongly supported RBT by providing the Camp-Baucus tax reform website with a thorough in-depth analysis of why CBT (citizenship-based taxation) is an unmitigated failure for the United States, unfair and prejudicial to Americans abroad, and a hindrance to developing exports. RBT would not only enhance competitiveness of Americans abroad but would also create jobs in the United States and accelerate the development of exports. Roger’s article can be found here..

(May 2103)

Financial Post: Diane Francis: Shaming Won’t Prevent Tax Avoidance

Does she take advantage of a Canadian Tax Free Savings Account (TFSA), have mutual funds, RRSPs? Are these profitable investments for her after her US tax compliance with 3520 and 3520A’s, 8621, 8891 form preparations? Does someone handle and pay for this compliance for Ms Francis?

And, why does she use the term “Tax Avoidance”? Does the CRA take their lead in terminology from Ms Francis?

But now the big nations — the United States and the European Union with its tax havens — are finally preparing to crack down on tax leakage as they struggle with debt and entitlement burdens and slow growth.

They have few choices: High profile tax evasion in Greece, Cyprus and Southern Europe has rattled the EU, as has Russia’s no-tax enticement of Gerard Depardieu to its jurisdiction. Finally, steps are being taken to remove secrecy in financial centers such as Luxembourg, Ireland, Austria and even the Switzerland.

The United States is also realizing that its tough system is being eroded by international tax gamesmanship. This week, the CEO Tim Cook of America’s Darling, Apple, was grilled by Congress on its clever tax avoidance schemes around the world and pilloried alongside Wall Street’s greedy and parasitic sector. Britain attacked Google’s and Amazon’s tax games, too.

But shame won’t do the job. Only an international tax regime, and rewriting of tax treaties that facilitate cheating, will.

To that end, the Organization of Economic Co-operation and Development (OECD) is preparing a template for international tax collection to eliminate loopholes and rein in evaders that will be presented this fall to the G20.

Almost at the Goal: Repeal FATCA Move-On Petition, for your signature. Thank you very much.

I’m posting this on behalf of bubblebustin and Just Me — and all of us who want to help repeal FATCA.

bubblebustin comment to @just me:

Rami returned my email of this morning and said that Helen Burggraf was in touch with him yesterday. Also informed me that “Moveon.org won’t do anything with the petition unless it reaches a critical mass as well.

It’s up to we small activists to make it big!

In the meantime we have had some impact with the ways and means committees, writing letters directly. It’s a multi-pronged approach that turns the tides eventually, we hope 🙂 ”

Inspiring words.

* Candidate for J.D., Washington and Lee University School of Law, May 2013. I would like to thank my advisor, Professor Michelle Drumbl, for her guidance. I would also like to thank my family and friends for their support and encouragement.

“notamused” has asked if this, which “Johnson” found and commented on could be posted on its own. (Good suggestion, notamused! Thanks, Johnson.) Note, the important comment from SwissPinoy.

FATCA: Toward a Multilateral Automatic Information Reporting Regime

From “SwissPinoy”

@Johnson, the following part of the report is nonsense:

“Thus, renunciation only serves as a way for individuals to avoid U.S. reporting requirements and related penalties after the date of renunciation.”

It incorrectly assumes that everyone who renounces has “annual income of approximately $150,000 or a net worth of at least $2 million”

Comment on original thread from “Just Me“:

Joanna is hardly a FATCAnatic, but it would have been good if she was…

http://www.linkedin.com/in/joannaheiberg
Student at Washington & Lee University School of Law Lexington, Virginia

Do you know the date this was written and what the distribution was? She has a lot of good foot note references?

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This has just been posted on the Moodys Tax Advisors blog.

IRS says hundreds of thousands of US citizens are not reporting Canadian trusts

This week the IRS released statistics on the number of returns it received in 2010 from US citizens with foreign trusts. The results are startling (you may find the report by clicking here). In all of Canada only 324 returns were filed that report ownership in a non-US trust, which likely means hundreds of thousands of US citizens residing in Canada had not filed the appropriate returns.  This is important for two reasons: first, the penalties for not filing are draconian (but waivable); and second, last week the US Government Accountability Office (GAO) issued a report that encouraged IRS to pursue those taxpayers who file late returns using a technique known as “quiet disclosure.”

Background

The US State Department knows of more than 687,000 US citizens residing in Canada but most experts agree that the actual number is several times that number.  Many common Canadian retirement and savings vehicles are considered foreign trusts under US law. These vehicles include registered education savings plans (RESPs), tax free savings accounts (TFSAs), registered disability savings plans (RDSPs) and the like. Of course, typical Canadian trusts used for income splitting and succession are also considered foreign trusts and carry the same reporting obligations. Any US citizen who owns, contributes to, or receives a distribution from any of these trusts must report that interest on the appropriate form at the appropriate time or face severe penalties.

Penalties for Failure to File

Contributions to or distributions from any of these trusts triggers the obligation to file US tax form 3520 on or before the due date of the US income tax return (form 1040). The failure to file penalty for the form 3520 is a minimum of $10,000. In addition, an ownership interest in any of these vehicles triggers the obligation to file the US form 3520-A on or before March 15. The failure to file this form triggers a minimum $10,000 penalty. Both of these penalties can be waived if the taxpayer has “reasonable cause” for not having filed.

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Shadow Raider has brought this to our attention and asked that it be posted:

The Ways and Means and Senate Finance Committees have just launched the website TaxReform.gov and are asking for the general public to submit comments on tax reform again. This time,  they even said they want “horror stories”, and many Americans abroad and immigrants have such stories to tell.

The form on the website asks for a US address, but, as Shadow Raider points out, “I suppose you could use your voting address (or perhaps try to input a foreign address using one of the obsolete postal abbreviations at the end of the list)”.