Liberty and justice for all United States persons abroad

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Tag Archives: transition tax

The US wants to “raise funds” by imposing taxation on the undistributed earnings of Canadian Controlled Private Corporations. Lawyer Monte Silver needs to “raise funds” to stop them. You can help

Posted on by Posted in Issues regarding US persons abroad, Transition Tax 46 Comments

Update – November 16, 2018 – Here is the November 15, 2018 interview with Monte Silver:

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A message from one Canadian resident …

More info after the jump …

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More about the @USTransitionTax issue from @LizT1: Finance Minister Morneau responds (sort of)

Posted on by Posted in Accidental Americans, Canadian Government, Issues regarding US persons abroad, Tax Treaties, Transition Tax 14 Comments

Following up from yesterday’s CBC article by Elizabeth Thompson, CBC has today published a shorter article describing Mr. Morneau’s response or non-response (whatever the case may be) to the “transition tax”. Her article begins:

The Canadian government is talking to the U.S. government about the impact a retroactive tax signed into law by U.S. President Donald Trump is having north of the border, Finance Minister Bill Morneau revealed Monday.

Speaking to reporters in Windsor, Ontario, Morneau said he is aware that some of the U.S. government’s tax changes affect Canadian residents with U.S. or dual citizenship.

It is, at the end of the day, going to be up to them to manage their own tax code.
– Finance Minister Bill Morneau
“We’re continuing to consult with Americans to make sure that we fully represent the challenges that these changes have made for Americans or dual citizens living in Canada,” Morneau said. “That’s an ongoing process. We certainly hope that we can make progress.”

Here is Mr. Morneau in the Q and A:

The comments (at least so far) reflect the difficulty of understanding the issue.

Nevertheless, this is significant because it is now clear that the Trudeau Government is well aware of the “transition/repatriation tax” and its effect on Canadians. This is good news.

And across the ocean and and the question of legislative change …

The following message appeared from Lawyer Monte Silver:

Americans Abroad with small businesses subject to Repatriation/GILTI taxes:

To get an exemption for American small businesses abroad from the Repatriation tax, last month we focused on Senator Cassidy of Louisiana who volunteered to assist. It worked and we have a draft bill in hand.

Now we focus on Ohio Senator Portman for a bill exempting us from GILTI. Portman responded and wants to speak to Americans abroad impacted by GILTI. If you or someone you know owns a small business abroad and is impacted by GILTI – or the Repatriation tax, IT IS URGENT THAT YOU CONTACT ME BY PRIVATE MESSAGE OR AT MS@SILVERCOLAW.COM

First a delay in payment – Is it possible that a legislative fix to the “transition tax” is in the works?

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The above tweet references CBC reporter Elizabeth Thompson’s latest article on the U.S. “transition tax”. While reporting on the delay (referenced at the Isaac Brock Society here), Ms. Thompson’s article offers the tantalising possibility that the “delay” may be linked to a desire for a legislative fix.

Her article at CBC includes:

Brian Masse, an NDP MP who sits on the Canada-United States Interparliamentary Group, said U.S. lawmakers were very much aware of the tax reform’s unintended consequences when MPs and senators met with them in Washington last month.

Masse said he was told legislation to fix the problem could be introduced in the coming weeks.

“There seemed to be a genuine understanding and appreciation that these are victims.”

By the way, the comments to the article are (as usual) not off to a good start. (In fact they are indescribably ignorant.) It appears that the average Canadian:

1. Hates corporations; and

2. Hates U.S. citizens (even when they are also Canadian)

But, when you have (1) “U.S. citizens” (2) owing Canadian “corporations” these people lose any semblance of rationality. (You can actually see their abilities to reason and process information implode in real time.)

It would be helpful to add some comments (calling all Brockers) that would provide some balance and education. Seems like a number of commenters don’t believe that “dual” citizens (usually they call them “duel” citizens) are actually Canadians.

There are a couple of really good comments from one “Karen Alpert” (a familiar name) which includes:

Technically, yes. It applies to any US citizen who owned a foreign corporation when the tax reform bill was signed last December. Anyone who renounces after that point would be liable for the tax. However, I suspect that a number of affected Canadian citizens will decline to comply with this tax and will hide behind the tax treaty provision that states that Canada will not help the IRS collect in Canada on tax liabilities that arose when the taxpayer was a Canadian citizen,

Ms. Alpert is absolutely correct – the issue of the “Canadian citizenship” defence to collection was recently explored at the Isaac Brock Society here.

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Elizabeth Thompson’s article about the “transition tax” have been featured on Brock as follows:

http://isaacbrocksociety.ca/2018/05/05/brock-project-advice-on-how-to-explain-the-effects-of-the-ustransitiontax-through-a-question-in-the-house-of-commons/

and

http://isaacbrocksociety.ca/2018/04/28/be-on-the-lookout-bubblebustin-to-be-on-cbc-the-national-on-the-transitiontax/

Brock project: Is the application of the U.S. Transition Tax to Canadian residents possible only because of the “savings clause”?

Posted on by Posted in Issues regarding US persons abroad, Non Resident Taxation, Tax Treaties, Transition Tax 34 Comments

In my previous post about the June 15, 2018 “transition tax deadline” I referenced the letter received from Minister Morneau’s office which included:

… Canada recognizes the sovereign right and policy choice, of the U.S. to tax its citizens, including citizens who are resident abroad. The Canada-United States Tax Convention (the Convention), preserves this right.

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Brock project: Advice on how to explain the effects of the @USTransitionTax through a question in the House of Commons

Posted on by Posted in Canadian Government, Issues regarding US persons abroad, Law & Morality, Non Resident Taxation 46 Comments

This Brock comment which just appeared is deserving of its own post and your specific attention, thoughts and assistance.

But first, …

This has been a very interesting week for Canadians who are possibly impacted by the U.S. Transition Tax. We have the interview of the Hermans which appeared on the National.

We have articles by Elizabeth Thompson. I expect that Ms. Thompson’s articles led to the the following editorial in the Halifax Chronicle:

A second article from CBC indicated that Murray Rankin* (a 2014 ally in the fight to stop the FATCA IGA, had referenced the “transition tax” in the House of Commons.

It appears that there is momentum growing in the “campaign for awareness”.

Moving on: How can we better frame the message? How can the right question(s) be used to educate?

It would be helpful for Brock readers and commenters to consider, when conveying the message:

1. What are the most important aspect(s) of the transition tax to convey?

2. What should be the language used to convey those ideas?

Beginning with the following Brock comment …

CAB asks for the assistance of Brockers as follows:

“URGENT I have been in contact with my local MP (conservative) and he is willing to submit a Question for Question Period regarding the Transition Tax. What I need to do is put together some background information and the actual wording of the question we want to have asked. There is no guarantee that it will be selected but it is certainly a shot. My understanding is that if not selected for this weeks question period then it can sit in the queue and be picked up at a later date.

My first kick at the can in composing a question — ” Mr. Speaker, The United States as part of their tax reform has recently passed a new law aimed at bringing home the profits of money off shored in large multi-national corporations. While it is laudable to repatriate these earnings back to the US homeland the application of this law makes no distinction between the large American corporations and those small Canadian corporations owned by Canadian citizens permanently resident in Canada but also hold a secondary US citizenship. These Canadian corporations owned by doctors, restaurateurs and small mom and pop shops are not Google and Apple . These corporations hold the retirement savings of Canadian citizens; the retained earnings of Canadian entrepreneurs ear marked to grow and expand their business. Application of this tax will effectively bankrupt Canadian businesses and wipeout the pension plans of our Canadian citizens. It is a violation of the Canada -US tax treaty as the US has created a fictional tax event retroactive to 1986 where the first right of taxation has been usurped by the US. First installment of this tax is due June 15 2018 .

Will the government of Canada commit to negotiating with US treasury to exempt Canadian corporations from the disastrous effect of this tax? Will the government use the the Canada US tax treaty to protect our sovereignty and tax base against this raid by the US government? The Finance Minister has committed to studying the effects of this extraterritorial law. But time is of the essence. Will the government provide direction to our citizens prior to June 15 2018 when the first installment is due.
Those affected are first and foremost Canadian citizens ,resident in Canada , and deserve the protection of the Canadian government.”

Looking for your feedback – want to make sure I set the right tone and get the right question asked that will help us the most. Also any suggestions as to what I can include in the package that I need to send would be helpful.

Keep our fingers crossed”

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*For those who were not following this in 2014, you will see that MP Murray Rankin played a prominent role in opposition to the FATCA IGA. See here: