Author Archives: calgary411

READERS WHO LIVE IN BRITISH COLUMBIA, PLEASE TAKE NOTE OF THIS.

This piece of information is contributed through a person wishing to maintain one-remove anonymity (no direct posting to Brock). I have received this information third-hand, but from a source I consider very reliable. (So this is at least two-remove posting. I haven’t personally spoken with the individual reporting this conversation with a Vancouver consulate official or employee.

In a telephone conversation with the Vancouver consulate in August 2012, a person at the consulate said that there is deliberate “batching” in the processing of renunciations. When the current batch is completed, priority will be given to other – presumably deferred – tasks for an unspecified period of time. (This perspective may help to explain the recent considerable lengthening of wait for first appointment in Vancouver.)

My advice to anyone in BC is, if it’s at all feasible and you want to get a CLN, go to Calgary or maybe Toronto, not Vancouver. They aren’t doing this, as far as we know, and certainly the appointment timings and CLN release information, starkly contrasted with what is going on in Vancouver, supports that assumption.

The information isn’t clear on whether this batching occurs with relinquishments as well as renunciations, but as Vancouver (unlike the rest of the planet except the Ottawa embassy) doesn’t seem to make any procedural distinctions in terms of processing the two very different forms of CLN, I suspect they probably also are batching relinquishments.

So, I would assume that if you go to Vancouver consulate, your application for either type of CLN could sit in a black hole for a rather long time. Bear that in mind when planning your course of action. I believe if you’ve already made a first appointment or even have had that first meeting, you can still proceed with your process at another consulate, but I don’t know whether that might adversely affect processing in Washington. It shouldn’t, and I do know one person who got the application switched from the embassy to a consulate, but that person hasn’t received the CLN yet so we don’t know for certain that it has no adverse consequences.

I found this article on the Moodys Tax Weekly:

Life Expectancy, Retirement Planning?

It seems to me that any effective, responsible retirement / estate planning, leaving something behind for our families, can drastically change when taking into account US citizenship-based taxation, excessive penalties (vs actual taxes owed to the US).  If we have been able to do any careful planning with our countries’ savings incentives (such as Canada’s RRSPs, RRIFs, TFSAs, RDSPs), certain mutual fund investments, etc. it all now has a different face.  Some are already there, into retirement, out of the work force and with limited choices to change course.

“saddened123” has provided a link to this story.  I’m posting it on her behalf.

Overseas Americans Band Together to Demand Rights – Geneva, Switzerland

Update: The report is available online on the web site of The Americans in Switzerland Working Group

Update 11:50  GENEVA, SWITZERLAND – A new report by several American citizen organizations outside the US is being used to give overseas citizens a voice in the upcoming presidential election. The report shows “how US Government policies and actions are negatively affecting the millions of US citizens who live abroad,” say the authors. “The report is based on a series of well-attended Town Hall Meetings, held in 2012 in five different Swiss cities, which brought together hundreds of Americans living in all parts of Switzerland.”

The group behind the report includes Democrats Abroad and Republicans Abroad as well as American Citizens Abroad (ACA), the Overseas American Academy and the Swiss branches of both the Democratic and Republican parties of the US. Personnel from the US Embassy in Bern were invited and attended each of the meetings.

“The most urgent motivation for the Town Hall Meetings was the unintended consequences and deplorable collateral damage caused to Americans living abroad by the pending implementation of the Fatca (Foreign Account Tax Compliance Act) legislation,” the group notes in a press release.

…

Posted by Ellen Wallace on 7 September 2012 at 10:10, genevalunch.com

For those waiting for further analysis on the new IRS Instructions [Published on Friday, 07 September 2012 15:59 Written by Roy A. Berg  JD, LL.M. (US Tax)]

If you are a US person residing in Canada and are one of the unfortunate few who does not have a graduate degree in US tax and who is not related to a cross-border US tax professional you may have missed filing one of the myriad of tax forms that are required every year (the failure to file of which can carry dire penalties). If this is the case, the IRS may have a new streamlined procedure just for you. The bad news is that few will likely qualify and those who do not qualify face serious consequences just for applying.

The new streamlined procedure went into effect on September 1, 2012. Click here to see the full text of the streamlined procedure. The program is designed for expats with simple returns and little or no tax due. But whether by design or defect, it threatens to entrap most of its likely applicants. For those who qualify, the new program may be a breeze. But for those who do not, and we suspect most expats will not, the streamlined procedure is a lot like a lobster pot – easy to get into, hard to live in, and harder to escape

Moodys Further Analysis: Completing the Questionnaire, or Entering the Lobster Pot.

Unfortunately the IRS has not given guidance as to which of the above-listed risk factors or combination thereof, will increase the taxpayer’s compliance risk, and therefore disqualify him from the streamlined procedure. Further, the questionnaire raises a number of extremely serious issues of which every taxpayer considering this procedure should be aware.

ON TIME — IRS releases details of new procedures for non-compliant taxpayers living abroad

This just arrived from Moodys Tax, with a link to the full text in the announcement.

Published on Friday, 31 August 2012 14:55Written by Roy A. Berg JD, LLM (US Tax) and James Gifford JD, LLM (US Tax)

As discussed in our June 28, 2012 blog, the Internal Revenue Service (“IRS”) previously announced new procedures that will enable non-resident US taxpayers who demonstrate “low compliance risk” to bring unfiled tax returns and related tax reporting obligations current and avoid potentially ruinous penalties. This afternoon the IRS released details regarding the new program for non-residents (such as Americans living in Canada) to get compliant with past tax obligations. We’ll have a more detailed analysis on Tuesday, but for now here are a few highlights:

• Persons qualifying for, submitting under the new “Streamlined Filing Procedure,” and presenting a low compliance risk will not have to pay penalties or face follow-up review by the IRS.
  • To qualify, you must be a non-resident US taxpayer who has lived outside of the US since January 1, 2009 and has not filed a US return since.
  • To participate, taxpayers must file three years of tax returns and information returns along with six years of “FBARs.” Tax and interest must be paid at the time of filing. A valid Taxpayer Identification Number or Social Security Number is required.
  • The determination of compliance risk is based on a large number of factors and the answers to a special questionnaire required as part of the submission.
• Generally, amended returns will not be accepted in this program. Where they are, the amended returns will be considered “high risk” and subject to increased scrutiny.
• Retroactive relief for deferral on Canadian retirement plans is available.
• The Streamlined Filing Procedure does not protect against the risk of criminal prosecution.

The full text of today’s announcement is available HERE.

 

 

NOTE: Thank you, bubblebustin, for finding the link for this information on the revamped IRS website *.  I am adjusting the Moodys link above (and HERE) to reach the new “IRS Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers”.

*EXPLANATION (compliments of ERIC!)

IRS Questionnaire

Further analysis: from “renounceuscitizenship”

I’ve read it and my conclusion only is ‘good luck on roping more in’. Those that do probably will have already been contemplating it and it suits them.  It will likely scare newcomers to the issue.  There may be deeper-digging ostriches until the reality of full FATCA implementation, if FATCA can’t be stopped or drastically changed.  Now to look for the media reactions to this latest from the US IRS.  I’m glad it is, this instance, a timely announcement!

There was a request for posting of this Financial Post article of a few days ago.  I, too, thought it an excellent piece and made a few comments.

An unnecessary overreaching of U.S. tax law into Canada by Prof. Vern Krishna, CM, QC, LSM, tax counsel with Borden Ladner Gervais LLP and executive director of the CGA Tax Research Centre at the University of Ottawa.

Phoenix rises: Canadians still buying properties despite price hike

Canada continues to press for fair tax deal with United States, Finance Minister Jim Flaherty’s Letter to CARP Members

Minister of Finance Jim Flaherty responded to CARP’s request that he address some of the membership’s concerns with the following letter:

Canada and the United States are neighbours, allies and friends.  We share a common border and common values.  One of those values is fighting tax evasion and ensuring that everyone pays their fair share.

Recently, the U.S. government introduced legislation called the Foreign Account Tax Compliance Act (FATCA), which will require non-U.S. financial institutions to enter into an agreement with the IRS to identify their U.S. account holders and report their account information to the IRS.

…

The double jeopardy of a U.S. citizen (Financial Post)

Don’t have time to get all that paperwork in by Friday? You can request an additional extension until Oct. 15. However, if you do owe U.S. tax, any amount paid after June 15 would be subject to both interest and failure to pay penalties.

and other US threats,

• If you do happen to owe U.S. taxes, your ability to travel to the U.S. in the future could be severely restricted if a bill, which is now being studied by a congressional conference committee, sees the light of day.  Under U.S. law, it is illegal for a U.S. citizen “to depart from or enter the United States unless he bears a valid United States passport.” A recent tax amendment added to the senate version of the Highway Trust Fund bill, would authorize the U.S. government to revoke or deny the renewal of a U.S. passport to an individual who owes more than US$50,000 in U.S. taxes, effective Jan. 1, 2013.

 

• U.S. senators propose ‘anti-Saverin’ tax evasion law