# US Ex-Pats..... Tax Change....



## hfp75 (Mar 15, 2018)

This is good news for Americans living abroad, say here in Canada......

https://www.cbc.ca/news/politics/tax-canada-u-s-repatriation-fatca-1.4956687


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## Nononymous (Jun 10, 2015)

This bill is very likely dead in the water with the new Congress, but in the event it were to pass, a few observations:

The proposed changes will be helpful to US citizens living abroad who are already compliant with US taxes, as it could provide them relief from continued filing obligations.

However, if you are a non-compliant dual US-Canadian citizen living in Canada, with no US assets or income or plans to move south, then this probably isn't a good enough reason to begin filing US tax returns - the IRS doesn't know you exist if you haven't told your banks that you are a US person so that they can potentially report account info under FATCA rules, and they can't touch you anyway.

Standard boilerplate advice for all dual citizens:

If you are an "Accidental American" - a dual citizen who has lived all or most of your life outside of the US, with no US financial ties - and you discover that you have US tax filing obligations, the absolute WORST thing you can do is rush off to a CPA and begin preparing US tax returns.

Stop, slow down, do some research. If the IRS hasn't found you yet, they aren't going to find you anytime soon. Furthermore, if you are a citizen in your country of residence, and have no US assets or income, the IRS has absolutely no ability to penalize you in any way, shape or form.

The most likely trigger for Accidentals discovering their filing obligations is a FATCA/CRS letter or question from their bank. The best response is to simply answer "no" to any questions about US citizenship or tax residency. In Canada, simple self-certification is all that is required, one small lie and the problem is solved. In other countries (e.g. Switzerland) enforcement is taken more seriously and there are significant restrictions on the services available to US citizens. If you are born outside the US, it is easy to conceal US citizenship and continue with life undisturbed. If however you have a US birthplace on your national ID, life can be quite difficult and often the only option is to renounce US citizenship at a cost of $2350. (Note that you do NOT need to become tax compliant to renounce, nor do you need to pay any exit tax the US might think it has a right to collect.)

Even if you are subject to FATCA reporting, that does not mean the IRS will come after you, as they would have no ability to collect penalties. Whether you renounce or not, there is no reason to become tax compliant. Accidental Americans who discover these obligations should NOT enter the US tax system.


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## on2qc (Jan 4, 2019)

I'm a dual national, was born in the US, but I've lived in Canada for years and have no intent to move back to the US. The problem for me, however, is that I filed taxes for 14 years of my life in the US doing work, paying into the social system. So that means I should be due a Social Security cheque, not a big one, but one that I've certainly earned. I have no intention of ever mentioning my Canadian income, but I also expect to collect what is duly mine in addition to CPP/OAS benefits here. I certainly hope there is no problem with this, because under principle I have no desire to disclose any external US financial information.


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## on2qc (Jan 4, 2019)

Nononymous said:


> This bill is very likely dead in the water with the new Congress, but...


The only truth is to expect the unexpected. Especially with the way things are in the US at this time.


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## Nononymous (Jun 10, 2015)

on2qc said:


> I'm a dual national, was born in the US, but I've lived in Canada for years and have no intent to move back to the US. The problem for me, however, is that I filed taxes for 14 years of my life in the US doing work, paying into the social system. So that means I should be due a Social Security cheque, not a big one, but one that I've certainly earned. I have no intention of ever mentioning my Canadian income, but I also expect to collect what is duly mine in addition to CPP/OAS benefits here. I certainly hope there is no problem with this, because under principle I have no desire to disclose any external US financial information.


I assume you stopped filing US taxes when you returned to Canada? If so, that should not prevent you from collecting Social Security when the time comes. Also look into the totalization agreement and applying those credits to CPP; I have no idea how that works exactly but apparently it's a thing and it might be a better deal.

On edit: Once you start collecting US social security you would need to declare that income on your Canadian taxes. But there would presumably be US tax withheld at source that you would receive a credit for, so that you're not being taxed twice. I expect (but am not certain) that you could still receive your social security payments without filing US returns if you wanted to remain non-compliant.


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## james4beach (Nov 15, 2012)

Another quick note, whether you are actually a US citizen or not, do not under any circumstances list any US address or phone number within your Canadian banking profiles. These things can all flag your account and result in your Canadian bank sending data to the US.

If you're spending time in the US, you can use a VoIP based service to keep a Canadian phone number and simply forward calls through to whatever temporary US phone you're using at the time. This also works with phone based login verification like the type used by TDDI.


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## Nononymous (Jun 10, 2015)

james4beach said:


> Another quick note, whether you are actually a US citizen or not, do not under any circumstances list any US address or phone number within your Canadian banking profiles. These things can all flag your account and result in your Canadian bank sending data to the US.


That's generally good advice, though hopefully it's not quite as bad as banks instantly sending your account balances to the IRS if they see a US address or phone number on your record. Those are not evidence of US citizenship, just possible indicia that may lead them to ask further questions, including requesting a Social Security Number. Ultimately, unless the bank for some reason has evidence of a US birthplace or citizenship, they are supposed to rely on self-certification - the customer's declaration - to determine who is or is not a reportable US person. (Such is the theory, based on CRA guidance - what banks actually do in practice is a bit of a mystery. There is a serious lack of transparency on this issue.) Which means that any US citizen prepared to not tell the truth can easily avoid FATCA.


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## on2qc (Jan 4, 2019)

Nononymous said:


> I assume you stopped filing US taxes when you returned to Canada? If so, that should not prevent you from collecting Social Security when the time comes. Also look into the totalization agreement and applying those credits to CPP; I have no idea how that works exactly but apparently it's a thing and it might be a better deal.
> 
> On edit: Once you start collecting US social security you would need to declare that income on your Canadian taxes. But there would presumably be US tax withheld at source that you would receive a credit for, so that you're not being taxed twice. I expect (but am not certain) that you could still receive your social security payments without filing US returns if you wanted to remain non-compliant.


I'm not aware of a totalization agreement or how that works? And yes, I absolutely stopped filing US taxes when I wasn't earning income there. There is no need for it, and I fundamentally do not recognize the US taxing citizens who are not in the US and have no intention of returning to the US. It is my understanding the only issues that could theoretically arise is if I return for work and must file taxes, and some how "found out" to have had foreign income. But I would assume my income is too low to be on anyone's radar.

But Social Security is an entitlement, I don't think the US government would have the ability to deny an entitlement due to a tax dispute anyway, even if one were to occur.

I don't see myself as doing anything wrong what-so-ever. I earned that entitlement by many years of work, I'm not seeking to 'milk the system' in any way, shape, or form. I don't even feel the need to apply for Medicare benefits when I turn 65 as the health benefits here are vastly superior. I just want my Social Security cheque and to be done with it all.


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## on2qc (Jan 4, 2019)

james4beach said:


> Another quick note, whether you are actually a US citizen or not, do not under any circumstances list any US address or phone number within your Canadian banking profiles. These things can all flag your account and result in your Canadian bank sending data to the US.
> 
> If you're spending time in the US, you can use a VoIP based service to keep a Canadian phone number and simply forward calls through to whatever temporary US phone you're using at the time. This also works with phone based login verification like the type used by TDDI.


Oh I've never used an American address with my current bank. Had an account somewhere else years ago where I did use US identity to originally open it; however, I went into the branch and they removed any signs of US identity upon my request. The banker I worked with didn't even ask questions and assisted me with finding out how to do it. It turns out, most in the banking industry aren't fond nor interested in US-based FATCA "obligations," because they have absolutely no bearing on Canadian law or Canadian institutions in general. The "requirement" to report is simply voluntary at best, I am already aware that you just tell your bank you're a Canadian citizen and leave it be. There is no reason to just blurt out that I'm an American too, it is completely irrelevant. The only reason I used my US identity previously was the period of time years ago when I was actually living in the states and had a Canadian bank account to use when I came here. Now that I'm in Canada for good, I would never disclose to a banker again that I have US citizenship.

Again, there is absolutely no useful need for that information.


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## Nononymous (Jun 10, 2015)

That's the spirit!


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## ian (Jun 18, 2016)

This past Saturday's Calgary Herald had a large advert from a US based law firm that specializes in tax. The offer...a free seminar at a downtown hotel outlining the potential benefits and the process of renouncing US citizenship for tax reasons. This is the first time that I have noticed an ad like this.

Lots of American expats in this city. A friend renounced his US citizenship a few years ago. At that time he attended a public US consulate information meeting in Toronto that explained the process. He said that the meeting was SRO.


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## Nononymous (Jun 10, 2015)

Was that Moodys Gartner again? (If not, who was it? Moodys is actually a Canadian firm.) They are very aggressive doing their seminars for a number of years now. Be very careful with them. Lots of misinformation. They will try to scare the pants off you then insist you need to pay minimum $10k in legal fees to "safely" renounce (BS, just make an appointment and sign the form) and then go through all the hoops to exit the US tax system. Their services may be useful for someone very wealthy, or a business owner with complicated cross-border financial affairs, but ordinary duals can either do a DIY renunciation for nothing (apart from the horrible fee) or just "self-certify" as Canadian only when their bank asks questions, and avoid the whole mess.


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## fatcat (Nov 11, 2009)

on2qc said:


> I'm not aware of a totalization agreement or how that works? And yes, I absolutely stopped filing US taxes when I wasn't earning income there. There is no need for it, and I fundamentally do not recognize the US taxing citizens who are not in the US and have no intention of returning to the US. It is my understanding the only issues that could theoretically arise is if I return for work and must file taxes, and some how "found out" to have had foreign income. But I would assume my income is too low to be on anyone's radar.
> 
> But Social Security is an entitlement, I don't think the US government would have the ability to deny an entitlement due to a tax dispute anyway, even if one were to occur.
> 
> I don't see myself as doing anything wrong what-so-ever. I earned that entitlement by many years of work, I'm not seeking to 'milk the system' in any way, shape, or form. I don't even feel the need to apply for Medicare benefits when I turn 65 as the health benefits here are vastly superior. I just want my Social Security cheque and to be done with it all.


do you live in bc ? are you smoking some of our lovely chronic ? because you are living in a fantasy world

you may get away with it and you may not but you have a legal obligation to file us taxes and a us treasury fbar (assuming you meet the minimum level of income/assets) and no amount of self-delusion will remove that obligation

social security is currently garnish-eligible for people who don't pay student loans: https://www.aarp.org/money/credit-loans-debt/info-2018/student-loans-garnish-ss.html

given the new tax bill (which likely will go nowhere) and spanky trump, it is smart to assume that anything is possible both with 1) us/canada tax law and 2) ongoing intensifying data exchanges

big-hair is rolling over for the americans and if he continues to squat in ottawa he will likely roll over for increased data and tax demands (canadian courts are going to shortly rule against the resisters)

we may well see laws that clawback social security for people that knowingly don't comply with internal revenue service and united states treasury obligations ... i would certainly be in favour ... why should i go the cost hassle and expense and let you skate ?

i sure as shite would never even think about crossing the us border ... ever ... and that still might not be enough

try a search with something like: "​united states canada cross border data exchange" and see what you get


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## Nononymous (Jun 10, 2015)

That is one view. There are other views. Isaac Brock Society web site and the American Expatriates FB group are excellent resources for those who are not interested in playing the American government's game.

Any informed, "willful" non-compliant person knows they have obligations to file under US law. They also understand that the US can't do anything to enforce these laws against Canadian citizens living in Canada.

That being said, anyone with US assets or income, or expectations of receiving Social Security payments, or a desire to spend time south of the border, needs to tread more carefully that anyone whose financial life is completely independent of the US. Certainly today there are folks on Isaac Brock who've renounced, never filed a thing, and receive SS payments. That could one day change for the worse. It's also possible the Canadian lawsuit might succeed, and similar efforts are underway in France and the EU, though more focused on the lack of reciprocity.

If anything I'm seeing a slight trend towards things getting better. Both IRS and CRA guidance on FATCA is making it easier to avoid being reported, not harder. The IRS has essentially given up requiring that foreign banks collect Social Security numbers from US persons. The CRA states quite clearly that banks may rely only on "self-certification" - i.e. the customer's word - unless there is other hard evidence of US citizenship.


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## fatcat (Nov 11, 2009)

Nononymous said:


> That is one view. There are other views. Isaac Brock Society web site and the American Expatriates FB group are excellent resources for those who are not interested in playing the American government's game.
> 
> Any informed, "willful" non-compliant person knows they have obligations to file under US law. They also understand that the US can't do anything to enforce these laws against Canadian citizens living in Canada.
> 
> ...


and i am seeing it easier and easier to become and remain compliant

filing us taxes costs me $350 a year for the preparation (my canadian taxes offset my usa obligations)

and filing the FBAR takes me 30-minutes sitting at my computer since i have trimmed my accounts to a few and keep good records

there is certainly some hassles like not being able to have a TFSA and being somewhat restricted in my choice of investments to avoid tax preparation bills and filing misteps

but remaining compliant and being able to demand entry to both the usa and canada whenever and wherever i choose is well worth it to me


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## Nononymous (Jun 10, 2015)

It's a decision that's worked well for you. However, it's fortunate you didn't incorporate or run your own business, like Suzanne Herman and plenty of other Canadians, who without warning faced six-figure "transition tax" bills from the IRS this year. Compliance was certainly the right decision for them, wasn't it? What could possibly go wrong?

https://www.cbc.ca/news/politics/transition-tax-trump-corporations-1.4639020

Compliance will certainly be easy and cheap for all those dual citizens in Vancouver and Toronto who sell their houses for seven-figure gains and then discover that the US wants a piece of that pie, unlike Canada.


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## fatcat (Nov 11, 2009)

yes, i get your point, my brother-in-law runs his own business as a contractor and i see him have to grapple with the hassle of FBAR's and IRS stuff as a small business, it's a pain in the butt but once you get the initial work done, remaining compliant is a matter of keeping good records and shouldering the burden of accounting costs which in my case are small and his run into the 3-4K a year territory

very, very few americans renounce their citizenship (even the steadily increasing numbers don't amount to spit in terms of total americans overseas) and there is a reason, you remain compliant and you can't be denied entry and / or residence in one of the greatest and most interesting countries in the world

but yeah, certainly, i would love to see the new house bill get traction and succeed, it won't, (nor do i think the resisters will win their upcoming case) but i would love to see it happen, it would make all of our lives easier

in the meantime i am not going to advise anyone to be non-compliant, that strikes me as reckless and potentially financially very costly


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## ian (Jun 18, 2016)

It was Moodys Gartner. My friend actually did his citizenship revocation on his own. As I recall, he had to get a final waiver from the IRS, etc. The final step for him was going into the consulate in Toronto to renounce his citizenship and hand over his passport.

For him it was a simple decision. He had lived in Canada for 25 years and had no intention of moving back.


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## Nononymous (Jun 10, 2015)

ian said:


> It was Moodys Gartner. My friend actually did his citizenship revocation on his own. As I recall, he had to get a final waiver from the IRS, etc. The final step for him was going into the consulate in Toronto to renounce his citizenship and hand over his passport.


So there is actually no "final waiver from the IRS" required to renounce - giving up US citizenship is completely separate from the process of exiting the US tax system. The consulate does not ask about tax status. Depending on the situation it may or may not make sense to go through the whole compliance and exit tax business after renouncing - plenty of folks do not bother.


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## Nononymous (Jun 10, 2015)

fatcat said:


> yes, i get your point, my brother-in-law runs his own business as a contractor and i see him have to grapple with the hassle of FBAR's and IRS stuff as a small business, it's a pain in the butt but once you get the initial work done, remaining compliant is a matter of keeping good records and shouldering the burden of accounting costs which in my case are small and his run into the 3-4K a year territory


Good thing your brother-in-law didn't keep deferred income in the business as a means of saving for retirement, something encouraged by Canadian tax law. If he did, he'd be facing a ruinous bill thanks to the new US transition tax. 



> in the meantime i am not going to advise anyone to be non-compliant, that strikes me as reckless and potentially financially very costly


Sadly, events of the past few years have shown us that compliance has been far more costly (for some) than non-compliance. If access to the US is not important, then there are currently no risks to non-compliance for Canadian citizens living in Canada. That may change in the future of course. Even if the TTFI bill passes, I'd argue that any non-compliant dual citizens should think long and hard about the risks of entering the US tax system just so that they not be required to file. Staying off the radar may still be much safer.


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## james4beach (Nov 15, 2012)

The US will likely keep becoming more aggressive on tax collection outside their borders. The nation is going broke and they're getting more desperate. The various penalties from the IRS (e.g. failure to FBAR) are already pretty steep and I don't expect them to back off at all.

It does appear that the CRA can cooperate with the IRS to some extent, as shown here: IRS fines Toronto man $165,000 for not filing forms; CRA helped collect

We also know (from recent news) that the US can launch criminal cases against people in Canada, and Canada will extradite people to the US on charges that are offenses in both countries. I'm really not sure it's good to completely ignore this problem, if someone has a duty to file paperwork in the US.

I am not an expert of any kind, and I really don't know. I'm not a US citizen, but I do have US filing obligations and am currently filing everything I'm supposed to, including FBAR and non-resident tax returns. I disclose all of my Canadian bank and investment accounts to the US.


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## Nononymous (Jun 10, 2015)

james4beach said:


> The US will likely keep becoming more aggressive on tax collection outside their borders. The nation is going broke and they're getting more desperate. The various penalties from the IRS (e.g. failure to FBAR) are already pretty steep and I don't expect them to back off at all.


Bit of a myth, that (not the going broke part). There's no ROI in pursuing non-residents when they can rarely collect, and most don't owe anyway thanks to FEIE or tax credits. Plus the IRS keeps getting its budget cut so there's less and less enforcement.



> It does appear that the CRA can cooperate with the IRS to some extent, as shown here: IRS fines Toronto man $165,000 for not filing forms; CRA helped collect


Famous case, that. Poor Mr. Dewees is not a Canadian citizen; if he were the CRA would not be allowed to collect on behalf of the IRS, per the tax treaty. Dewees did literally everything wrong, for which he can thank his idiot lawyer: never applied for citizenship, entered a wretched US "amnesty" program, then paid a huge penalty in order to contest it, and lost.



> We also know (from recent news) that the US can launch criminal cases against people in Canada, and Canada will extradite people to the US on charges that are offenses in both countries. I'm really not sure it's good to completely ignore this problem, if someone has a duty to file paperwork in the US.


Taking active steps to stay off the FATCA radar isn't ignoring the problem, it's making a judgement that the safest course of action is to stay out of the US tax system. I doubt very much that an otherwise law-abiding Canadian citizen and resident who chose not to file US returns would be charged with a criminal offense and successfully extradited.


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## on2qc (Jan 4, 2019)

fatcat said:


> yes, i get your point, my brother-in-law runs his own business as a contractor and i see him have to grapple with the hassle of FBAR's and IRS stuff as a small business, it's a pain in the butt but once you get the initial work done, remaining compliant is a matter of keeping good records and shouldering the burden of accounting costs which in my case are small and his run into the 3-4K a year territory
> 
> very, very few americans renounce their citizenship (even the steadily increasing numbers don't amount to spit in terms of total americans overseas) and there is a reason, you remain compliant and you can't be denied entry and / or residence in one of the greatest and most interesting countries in the world
> 
> ...


I'm not an immigration lawyer, but I don't think any country of which you have citizenship has the right to deny you entry. They might take you into secondary and question you with ridiculous questions, but ultimately they are obligated to let you in. They may only deny entry to non-citizens.

The real question would be, for someone who is just a wage earner in Canada, has lived in Canada for many years, has no bank accounts being reported to the US as I've not self-reported anything (and have no intent on doing so), the chances of even seeing this are low. I just went cross-border last month to visit family for the holidays and wasn't asked a single question about my financial status and I've been in Canada for years. I don't see why this would change.


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## on2qc (Jan 4, 2019)

Nononymous said:


> Bit of a myth, that (not the going broke part). There's no ROI in pursuing non-residents when they can rarely collect, and most don't owe anyway thanks to FEIE or tax credits. Plus the IRS keeps getting its budget cut so there's less and less enforcement.
> 
> 
> 
> ...


I hadn't previously seen that report. It is incredibly odd that gentleman would choose to be in Canada for such a long period and never file for citizenship. Even still, I find it bizarre that a fully legal permanent resident would face the possibility of the CRA collecting on behalf of the IRS. Some of these treaties have peculiar rules in them, some of which should be challenged in court. But that is a separate question for another day.

It sounds like he still has options. He could have his lawyer play the delay game and delay legal/tax cases while he applies for citizenship (I assume a naturalized Canadian resident who has been here for 40+ years would be approved quickly, maybe 6 months or a year processing time), and following his obtaining Canadian citizenship then he would be one of the few who has real reason to renounce US citizenship and do so after he gets his Canadian citizenship.

There is always a workaround, but his lawyers would have to be smart enough to offer the advice and file as many delays as possible to keep the CRA at bay until he changes his status. As someone who has had to deal with immigration since I've hopped the border years ago, it seems like a viable way to avoid that IRS tax bill.

In fact, he probably wouldn't even need to renounce his US citizenship, if he's been a legal permanent resident of Canada for that length of time, after a quick 6-12 months of paperwork to get citizenship here he could just tell the CRA his status has changed and to stop collecting on behalf of a foreign government as his right as a citizen of Canada. Problem solved.


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## Nononymous (Jun 10, 2015)

on2qc said:


> In fact, he probably wouldn't even need to renounce his US citizenship, if he's been a legal permanent resident of Canada for that length of time, after a quick 6-12 months of paperwork to get citizenship here he could just tell the CRA his status has changed and to stop collecting on behalf of a foreign government as his right as a citizen of Canada. Problem solved.


The mutual assistance in collection provision of the US-Canada tax treaty states that the CRA will help the IRS collect outstanding tax debts (but not FBAR fines) against any US citizen resident in Canada who is *not* a Canadian citizen. Only four other countries have this sort of provision (France, Netherlands, Denmark, Sweden); anywhere else in the world there is no provision for domestic authorities to assist with collections against US citizens, though in Switzerland the banks are so terrified that they make US-citizen customers (even duals with Swiss citizenship) sign agreements that they will follow US law.

Unfortunately for Mr. Dewees, the treaty states that CRA would still assist the IRS with collection on debts incurred prior to naturalization, so acquiring Canadian citizenship will not help him at this point.

Dewees literally did everything wrong that can possibly be done wrong, which is why he's the only known case of CRA helping the IRS with collection. If he'd taken Canadian citizenship and/or kept quiet and not tried to enter a US amnesty program, none of this would have happened.


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## Eclectic12 (Oct 20, 2010)

on2qc said:


> ... It is incredibly odd that gentleman would choose to be in Canada for such a long period and never file for citizenship ...


I've run into people who are similar ... makes no sense to me but it is what it is.

The "1971 to 1980" group that this gentleman would fit has 92% of those eligible obtaining Canadian citizenship, down a bit from the "before 1972" group at 93.3%.

According to the part looking at eligible immigrant populations, the rates vary as the immigrants born in Hong Kong Special Administrative Region are at top with 95.9% while US born immigrants at 70.9% are the lowest.

https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-010-x/99-010-x2011003_1-eng.cfm



Cheers


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## Nononymous (Jun 10, 2015)

on2qc said:


> I'm not an immigration lawyer, but I don't think any country of which you have citizenship has the right to deny you entry. They might take you into secondary and question you with ridiculous questions, but ultimately they are obligated to let you in. They may only deny entry to non-citizens.
> 
> The real question would be, for someone who is just a wage earner in Canada, has lived in Canada for many years, has no bank accounts being reported to the US as I've not self-reported anything (and have no intent on doing so), the chances of even seeing this are low. I just went cross-border last month to visit family for the holidays and wasn't asked a single question about my financial status and I've been in Canada for years. I don't see why this would change.


The current situation is this:

US customs does not routinely have access to information about US persons' tax status, nor do they ask questions about whether returns have been filed. Even if they did have access to IRS records, it wouldn't mean much: there are minimum income thresholds for filing (US$4 to 10k depending on marital status) and minimum balance requirements for FBAR reports, so a lack of information on file is not itself evidence of non-compliance; the IRS will obviously not have records of income earned by non-residents, nor of accounts not reported under FATCA (and they are still a long way away from doing anything useful with FATCA data).

If a US citizen were to owe a significant tax debt (over US$51k) there's a new law under which they may have their US passport revoked, or be denied passport renewal. Not really a problem for duals, but potentially a big deal for expats with only US citizenship.

If a person has a large debt to the IRS (with a lien etc.) there may be provisions for them to be flagged on arrival so that their contact information while in the US can be passed on to an IRS agent, who will want to have a chat with them during their visit. They will not be detained or have property seized.

If a person has had criminal tax evasion charges filed against them, then they could be detained and arrested upon entering the US.

Further note: all US citizens are required by law to use a US passport when entering the US. Many (most?) Canada-US duals do not do this. The law isn't really enforced, and no penalty for breaking it has ever been defined. If you travel to the US on a Canadian passport with a US birthplace, it's possible that US customs will notice and give you a lecture (sometimes polite, sometimes not). But once they determine that you are a US citizen, due to birthplace, they cannot deny you entry. But they might delay you long enough that you miss your flight.


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## Eclectic12 (Oct 20, 2010)

Nononymous said:


> The mutual assistance in collection provision of the US-Canada tax treaty states that the CRA will help the IRS collect outstanding tax debts (but not FBAR fines) against any US citizen resident in Canada who is not a Canadian citizen. Only four other countries have this sort of provision (France, Netherlands, Denmark, Sweden); anywhere else in the world there is no provision for domestic authorities to assist with collections against US citizens, though in Switzerland the banks are so terrified that they make US-citizen customers (even duals with Swiss citizenship) sign agreements that they will follow US law ...


Or in some cases, like other European banks, they decide the business isn't worth it and tell the US person to take their business elsewhere ... similar to the US brokerage that told their Canadian citizen clients the same thing.
https://business.financialpost.com/...iving-in-u-s-to-take-their-business-elsewhere 


Cheers


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## Nononymous (Jun 10, 2015)

Eclectic12 said:


> Or in some cases, like other European banks, they decide the business isn't worth it and tell the US person to take their business elsewhere ... similar to the US brokerage that told their Canadian citizen clients the same thing.
> https://business.financialpost.com/...iving-in-u-s-to-take-their-business-elsewhere


Yes, that's a huge problem in Europe and elsewhere, even dual citizens in their home countries are being denied banking and investment services because of US personhood. But what's different about the Swiss case is that some of the banks threaten to cooperate with the IRS and allow taxes and penalties to be collected directly from the account, per the agreements they make their customers sign. Their paranoia is a consequence of the (well-deserved) beating they took for marketing secret offshore accounts to US residents a decade ago.

Fortunately we don't face that issue in Canada. One small Alberta bank tried denying accounts to US citizens a few years ago and received a lot of bad press. More importantly, Canadian banks don't check ID for birthplace, so anyone who doesn't want to be identified for FATCA purposes simply shows a drivers license instead of a passport and "self-certifies" as not a US citizen - problem solved.


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## fatcat (Nov 11, 2009)

on2qc said:


> I'm not an immigration lawyer, but I don't think any country of which you have citizenship has the right to deny you entry. They might take you into secondary and question you with ridiculous questions, but ultimately they are obligated to let you in. They may only deny entry to non-citizens.
> 
> The real question would be, for someone who is just a wage earner in Canada, has lived in Canada for many years, has no bank accounts being reported to the US as I've not self-reported anything (and have no intent on doing so), the chances of even seeing this are low. I just went cross-border last month to visit family for the holidays and wasn't asked a single question about my financial status and I've been in Canada for years. *I don't see why this would change.*


it may change and you have no way of knowing when and if it will change 

it seems to me you have a tradeoff, deal with the short term hassle of getting compliant or risk getting caught

at some point the amnesty is going to disappear and the cra and treasury are going to conclude that people have been adequately informed and expected to comply (we have reached that point i think) and we are going to see the penalties start to get applied

you are making a foolish choice in my opinion, but, if you want to gamble with possible jail time and 10's of thousands of dollars of fines and worrying ... for ... the ... rest ... of ... your ... life ... about getting caught, go right ahead, fight the power and the man and don't let em take you alive ... i sure wouldn't


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## james4beach (Nov 15, 2012)

I agree with fatcat. This is jail time kind of risks... the US is being very vocal and making it really clear they expect these filings and FBARs and such.

Canada already cooperates with the US for all border crossings and criminal investigations cross-border. Police cooperate, government cooperates. Tax data is shared. Personally I do not believe there is any "firewall" here.

At the same time I recognize the horrible situation US citizens find themselves in, and I have sympathy that there is no good solution here. Even as a non citizen this stuff has caused me grief, so I can only imagine what situation you folks are in.


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## Nononymous (Jun 10, 2015)

It's no grief at all actually. Do nothing, avoid financial entanglements with the US, and you're not in danger.

The ones I feel sorry for are the ones who became compliant thinking it was the safe thing to do, then faced huge transition-tax bills because of how they structured their business, or paid capital gains on the sale of their homes. Obviously they'd be much better off had they stayed off the radar or renounced.

Under current law the CRA won't touch Canadian citizens on behalf of the US. Tax data is *not* routinely shared. There are provisions to answer requests as part of investigations of specific individuals, yes. But the CRA absolutely does not, for example, somehow identify Canadian taxpayers who are US citizens then send income information to the IRS. 

There is no "jail time" risk, there just isn't.


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## Numbersman61 (Jan 26, 2015)

Nononymous said:


> It's no grief at all actually. Do nothing, avoid financial entanglements with the US, and you're not in danger.
> 
> The ones I feel sorry for are the ones who became compliant thinking it was the safe thing to do, then faced huge transition-tax bills because of how they structured their business, or paid capital gains on the sale of their homes. Obviously they'd be much better off had they stayed off the radar or renounced.
> 
> ...


Wow!! That is great news!! I expect everyone will be relieved with your professional advice. Of course, some may question if it is legal to provide false information to the Canadian banks.


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## Eclectic12 (Oct 20, 2010)

Nononymous said:


> ... Under current law the CRA won't touch Canadian citizens on behalf of the US. Tax data is *not* routinely shared. There are provisions to answer requests as part of investigations of specific individuals, yes. But the CRA absolutely does not, for example, somehow identify Canadian taxpayers who are US citizens then send income information to the IRS.
> 
> There is no "jail time" risk, there just isn't.


Sounds great ... and then it is reported that CRA has been handing over info on accounts below the IRS threshold for reporting.

With everything supposedly going through CRA then to the IRS, one also wonders why the IRS reports having over nine thousand Canadian FIs registered with the IRS. Though it does explain why the IRS reports about ten percent more bank records received from Canada than CRA says they sent.


Cheers


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## Nononymous (Jun 10, 2015)

Numbersman61 said:


> Wow!! That is great news!! I expect everyone will be relieved with your professional advice. Of course, some may question if it is legal to provide false information to the Canadian banks.


If you dig into the CRA guidance on FATCA, it states quite clearly that banks have no grounds on which to question a customer's self-certification unless they have other knowledge of US citizenship or birthplace; for US birthplace they must accept a "reasonable explanation" for non-citizenship without the expectation that they make a ruling on the finer points of US immigration law. There's quite a lot of wiggle room. And no risk of US sanction against the bank if they follow the guidance. 

Is it "legal" to lie to your bank? I and others have looked at the fine print on the CRA's generic FATCA/CRS certification forms (available for banks to use) and the only penalty mentioned is a $100 fine for failing to provide requested information. I suppose the bank could go after you for some sort of fraud, but would they?


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## Nononymous (Jun 10, 2015)

Eclectic12 said:


> Sounds great ... and then it is reported that CRA has been handing over info on accounts below the IRS threshold for reporting.
> 
> With everything supposedly going through CRA then to the IRS, one also wonders why the IRS reports having over nine thousand Canadian FIs registered with the IRS. Though it does explain why the IRS reports about ten percent more bank records received from Canada than CRA says they sent.


FATCA data is year-end balance plus interest or dividend income associated with the account. Unfortunately the rules do not prevent banks from reporting accounts under the threshold, and some banks apparently report all US-person accounts either to reduce their perceived risk or because it's easier and cheaper than applying a filter to the data. The CRA then passes this data on to the IRS - I don't believe they process it themselves, they just act as the middleman for legal reasons. It's a huge concern that banks may be over-reporting, and that it's difficult or impossible to find out what has actually been reported. Hopefully the lawsuit will address some of these abuses. This is also why it's a better strategy to not self-certify as a US person than to trust the bank to not report accounts kept below the threshold. 

I'm not sure about the other comment, regarding registered FIs. I think that happens anyway under the IGA - banks register or certify with the IRS even though CRA handles the data transfer. As for the numbers, who knows? Apparently the data is a complete mess, full of duplications and missing SSNs. There's a recent US government report (some sort of inspector general thing) detailing the many problems. For the time being the IRS is definitely not in a position to contact any non-compliant person who's had an account reported under FATCA, because they seem to be buried under a pile of useless numbers.


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## fatcat (Nov 11, 2009)

Nononymous said:


> It's no grief at all actually. Do nothing, avoid financial entanglements with the US, and you're not in danger.
> 
> *The ones I feel sorry for are the ones who became compliant thinking it was the safe thing to do, then faced huge transition-tax bills because of how they structured their business, or paid capital gains on the sale of their homes. Obviously they'd be much better off had they stayed off the radar or renounced.*
> 
> ...


these people represent a fraction of the people who fall under FATCA, the vast majority, probably 95% are straightforward reporters, they should have filed under the amnesty and stay current, problem solved



Nononymous said:


> FATCA data is year-end balance plus interest or dividend income associated with the account.


no, it's the highest balance in the course of the year, not the end balance


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## james4beach (Nov 15, 2012)

fatcat said:


> no, it's the highest balance in the course of the year, not the end balance


That's FBAR. Peak balance at any time during the year.


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## Nononymous (Jun 10, 2015)

fatcat said:


> these people represent a fraction of the people who fall under FATCA, the vast majority, probably 95% are straightforward reporters, they should have filed under the amnesty and stay current, problem solved


Tell that to anyone in the 5 percent. The point stands - they thought they were doing the right thing, and they got screwed.



> no, it's the highest balance in the course of the year, not the end balance


FBAR reports (by the taxpayer) are highest balance. FATCA reports (by the bank) are year-end balance. It's quite bizarre.


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## fatcat (Nov 11, 2009)

Nononymous said:


> Tell that to anyone in the 5 percent. The point stands - they thought they were doing the right thing, and they got screwed.
> 
> 
> 
> FBAR reports (by the taxpayer) are highest balance. FATCA reports (by the bank) are year-end balance. It's quite bizarre.


from instructions for IRS form 8938

*Reporting Maximum Value*
You must report the maximum value during the tax year of each specified foreign financial asset reported on Form 8938.


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## Nononymous (Jun 10, 2015)

That's form 8938 (an FBAR-like form filed by the taxpayer) not what banks report on US-person accounts under FATCA. 

Reportable as per the US-Canada IGA: 

"the account balance or value as of the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure;"


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## fatcat (Nov 11, 2009)

fair enough

you started your sentence with "fatca data" and i assumed you were speaking of individuals filing requirements not banks

if indeed the banks are doing this then their data and user data will never match because we end-users are reporting high-balances and the banks are reporting end-balances which are two different numbers


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## Nononymous (Jun 10, 2015)

Exactly. FATCA is an expensive farce. It's a giant John Doe summons grabbing data indiscriminately, a fishing expedition, designed to scare US residents into declaring their offshore assets. Non-resident duals are collateral damage, not the target. I'd be very surprised if the IRS _ever_ made any attempt to contact a non-compliant US person abroad because of FATCA reporting. Hasn't happened yet.

The implications of this are seen in how Canadian banks look for US persons: they are very interested in US address or contact info in account records because that might mean a US resident, but they aren't actually that worried about discovering US citizenship. It's a checkbox on a form, nothing more; sometimes it only asks if you are "tax-resident in another country", which is incredibly vague to the average consumer; they ask no questions about place of birth or parental citizenship, the two key indicators. So while FATCA is very easy to deal with in Canada - answer the question with a polite "no" and show your drivers license instead of your passport when opening a new account - it's a huge problem in Europe, where birthplace is on the national ID. 

Non-resident duals are not a target because there's no ROI in it for the US. Estimates for non-resident US citizens run 6 to 9 million. About 1 million file returns (so 11 to 15 percent). Of this group, about 6 percent actually owe money, thanks to tax credits and the FEIE. (Others collect money for the child tax credit. Overall it may even be a net loss for the US treasury.) For those who have citizenship in their country of residence, there is no mechanism by which the IRS can enforce collection. Recent data shows that the various amnesty programs have scared a comically small number of people into compliance. 

This is why I sleep soundly at night, and make educating others a part-time hobby. Once you figure out that the IRS isn't willing or able to come after duals (US-only citizens need to be more careful) and that FATCA is really aimed at US residents, there's just not that much to worry about. Compliance, on the other hand, can be a big, expensive mistake.


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## Eclectic12 (Oct 20, 2010)

Nononymous said:


> ... I'm not sure about the other comment, regarding registered FIs. I think that happens anyway under the IGA - banks register or certify with the IRS even though CRA handles the data transfer. As for the numbers, who knows?


According to the freedom of information request - the IRS says the info is coming directly from Canadian FIs without CRA involvement.


Cheers


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## Nononymous (Jun 10, 2015)

No, the whole point of the Model 1 IGA is that the banks report to the national tax authority, who then forwards the data to the IRS. It's the only way to get around banks violating privacy rules by reporting directly to a foreign government.


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## on2qc (Jan 4, 2019)

Nononymous said:


> The current situation is this:
> 
> US customs does not routinely have access to information about US persons' tax status, nor do they ask questions about whether returns have been filed. Even if they did have access to IRS records, it wouldn't mean much: there are minimum income thresholds for filing (US$4 to 10k depending on marital status) and minimum balance requirements for FBAR reports, so a lack of information on file is not itself evidence of non-compliance; the IRS will obviously not have records of income earned by non-residents, nor of accounts not reported under FATCA (and they are still a long way away from doing anything useful with FATCA data).
> 
> ...


I have experience with the last paragraph. I typically follow this pattern: when I enter the US I present my US passport. When I travel anywhere else in the world or re-enter Canada, I present my Canadian passport. I consider myself Canadian first and foremost. The US credentials are only there because I have to have them, otherwise I wouldn't even update my US passport every 10 years.

On another note, I have found myself without my US passport before and I was able to use my Canadian passport just fine. I tend to keep my Canadian passport on me more frequently, because I identify as Canadian first and foremost, and I've had situations where I've visited a friend, he suggests (or politely demands) we go to the US to get something (as I was helping with home repair), I don't have my US passport and I'm not driving 2 hours to my house to get it, so I presented myself as Canadian when we took a short shopping trip to the US because he was cheap and probably spent more in gas money than he saved. LOL The officer really said nothing and it was fine, and I came back and it was fine. But that happened years ago and I still remember the crossing was easy. They did ask me why I didn't have my US passport and I was just honest and said I don't keep it on me, then they waved us through.

Another situation I've run into: I had a flight plan many years ago that took me to Europe. I had my Canadian passport only, because the flight was supposed to come direct back to Canada and I wasn't supposed to touch US soil. Unfortunately, severe weather caused a diversion to Boston for some reason (to this day I don't understand why, not enough fuel to get to Halifax or somewhere else?), and I had to deal with US customs as we didn't stay on the flight as the delay was long enough to get off the flight. Even still, I didn't have any problems with a Canadian passport and identifying myself as dual. They just waved me on after I told them I had no intention of coming to the US and just wanted to get a hotel to spend the night instead of staying in the airport like a bunch of packed sardines. I had no problems.

Presumably, however, those situations would be rare or one time events.


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## on2qc (Jan 4, 2019)

Nononymous said:


> Exactly. FATCA is an expensive farce. It's a giant John Doe summons grabbing data indiscriminately, a fishing expedition, designed to scare US residents into declaring their offshore assets. Non-resident duals are collateral damage, not the target. I'd be very surprised if the IRS _ever_ made any attempt to contact a non-compliant US person abroad because of FATCA reporting. Hasn't happened yet.


Dual nationals (who are citizens of only the US) still have a solution if they find themselves in the problem, and the problem is significant enough. We are talking about a group of people who are Canadian permanent residents and just never took the step to file for citizenship, but are already legal, permanent residents of Canada.

All they have to do is file for citizenship, wait the 6-12 months for the process to complete, and once Canadian citizenship is obtained, they update their status to the CRA and if the problem is big enough, they can renounce US citizenship, which then dissolves the obligation to pay the IRS anything. I have heard of people getting citizenship after only 6-8 months, that's less than one tax year.

So even still, there is a way out. You just have to have someone receiving good advice to realize there is a way out. I find it hard to believe a problem could get to the level it did in that Global News link, without the said individual not receiving sage legal advice. He does not have to pay those taxes, all he has to do is take the steps outlined above.

Sure, he might have to deal with the CRA for this tax year, but if he has a good legal team they can delay and it will be a temporary problem at best, not a permanent obligation.


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## Nononymous (Jun 10, 2015)

I stopped using a US passport many years ago, have exclusively used a Canadian with US birthplace for at least ten or fifteen years. I was delayed once on a short business trip, when told I needed a work visa; only after I got crabby about that did they see US birthplace and ask if I was dual. I had an expired US passport in my bag and they let me in, told me I must always use a US passport in future. I have not done so and never have they raised the issue again. It does sometimes happen that they will ask people for a US passport if they see the US birthplace, but it's still quite rare.


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## Nononymous (Jun 10, 2015)

on2qc said:


> All they have to do is file for citizenship, wait the 6-12 months for the process to complete, and once Canadian citizenship is obtained, they update their status to the CRA and if the problem is big enough, they can renounce US citizenship, which then dissolves the obligation to pay the IRS anything.


If I'm not mistaken, you only declare your residence on your tax return, not your citizenship. So you would not have any status to update with CRA upon becoming Canadian. Furthermore, CRA does not transmit US citizens' tax data to the IRS. FATCA is different, and to stop that reporting you would need to tell your bank (not CRA) that you had renounced US citizenship; acquiring Canadian citizenship would have no effect. (Assuming of course the bank knew about your US citizenship in the first place.)

Unfortunately, however, renouncing US citizenship only prevents future US tax obligations, does not get rid of past debts. And the tax treaty collection provisions state that CRA will assist IRS with collection of debts incurred prior to naturalization. So your plan would not work retroactively. Though the odds of the US finding and pursuing such a person are very small. It happened to Mr. Dewees because he received very bad advice and put his own neck on the chopping block. As far as we know it hasn't happened to anyone else.


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## on2qc (Jan 4, 2019)

Nononymous said:


> I stopped using a US passport many years ago, have exclusively used a Canadian with US birthplace for at least ten or fifteen years. I was delayed once on a short business trip, when told I needed a work visa; only after I got crabby about that did they see US birthplace and ask if I was dual. I had an expired US passport in my bag and they let me in, told me I must always use a US passport in future. I have not done so and never have they raised the issue again. It does sometimes happen that they will ask people for a US passport if they see the US birthplace, but it's still quite rare.


The only thing I do is renew the US passport once every 10 years, but I have considered not renewing. I just renewed not long ago so I've got another 10 years to ponder the question.

Border guards live in a box, their minds are limited to only what they are taught and know. They have a very hard time when faced with any situation that doesn't fit into the preconceived notions and boxes they typically work in. When it comes to the border, really its just a few things that determine whether you're going to get the third degree or whether you'll get waved through without a question: 1) Do they believe you/do you have a believable story and 2) Does anything in your story venture outside the virtual box they live within.

If its outside the box, they get testy and ask repeated questions and try and trip you up because they're on the hunt. When you're outside the box, what should have been a simple 30 second interaction becomes more.

It sounds like that officer just couldn't handle the outside-the-box statement that you'd be doing work, so they started the hunt. LOL

The last time I had an outside-the-box conversation with a border agent was when they literally couldn't handle the concept of someone not spending a lot of time in precious America. I was going to the Buffalo area for a few hours, I had a friend I wanted to have a dinner with, then just come back. The officer couldn't handle the thought of why I would be coming for such a short period. They sent me to secondary, wasted their time and mine, then I was on my way as usual.

The officer at the initial booth even told me my eyes were dilated and that I was nervous. Granted, I am always "alert" when I go to a border, but sometimes they say the stupidest **** you'll ever hear. Dilated from what, sugar from the cookies I had earlier that day? LOL

It is utterly crazy statements like that which prove to me border guards shoot from the hip and you just have to deal the cards you're dealt. Most often I find the border easy to go through, but you always get that one officer who can't contemplate something simple. Such as the fact that you're not going to stay in precious America for more than a few hours? LOL Sent this officer into crazytown.

What I really felt like telling the officer is that I left the US voluntarily and for good reason, do I need to come back to stay longer? But the border isn't a place for jokes and sarcasm, I digress.


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## james4beach (Nov 15, 2012)

on2qc said:


> It is utterly crazy statements like that which prove to me border guards shoot from the hip and you just have to deal the cards you're dealt. Most often I find the border easy to go through, but you always get that one officer who can't contemplate something simple. Such as the fact that you're not going to stay in precious America for more than a few hours? LOL Sent this officer into crazytown.
> 
> What I really felt like telling the officer is that I left the US voluntarily and for good reason, do I need to come back to stay longer? But the border isn't a place for jokes and sarcasm, I digress.


The officer isn't crazy. They are trained similarly to police interrogators; the odd questions or accusations are meant to unsettle someone who has a guilty conscience. The border guard will try to rattle someone and try to make them nervous. Then they watch the reaction: does the person get nervous? Do they fidget, *start rambling*, or doing something else that looks guilty? And especially... do they start saying interesting or incriminating things in response?

I once observed how a police interrogator works and it's kind of similar. They fish around for something they can seize on to make a "point" out of. Sometimes they find a good point and it's a strong accusation. Other times all they have is a stupid point, but they will still leverage it (like the example you gave). It's a technique.

Don't take the bait. When you hear them say something strange or accusatory, maintain a calm facial expression, don't say anything, and think about your response. No need for jokes or sarcasm or arguments, it doesn't do any good, because the agents are actually using a technique and if you get rattled, it's having the desired effect.

But I might be making them sound more professional than they really are. They can also be petty people, so you have to be careful not to "talk down" to them or sound condescending. The mental trick I use when I have a disagreement with one of them is to think of them as a buddy, an equal friend. Calmly explain the point of misunderstanding to them, without being aggressive.


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## on2qc (Jan 4, 2019)

I think it is crazy when they say outlandish things, such as "your eyes are dilated" when this is clearly not true and there was no reason for the statement.

Of course sarcasm isn't the proper response, but its sometimes hard to bite the tongue when faced with stupid, crazy statements like that one. I'll never forget that one trip.

To be honest, its officers like that who are hurting the local economy. It makes visitors not want to go to Buffalo and spend the money, and for any Canadian who has visited Buffalo they are keenly aware the local economy there can sure use whatever cash it can get. Buffalo certainly isn't the richest American city out there, so it is peculiar that a border officer would make someone's visit feel unwanted. I suppose when you have a cushy cheque coming from Washington and a lavish pension waiting at the end of the tunnel, they probably don't care about the local economy anyway.


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## james4beach (Nov 15, 2012)

on2qc said:


> I think it is crazy when they say outlandish things, such as "your eyes are dilated" when this is clearly not true and there was no reason for the statement.
> 
> Of course sarcasm isn't the proper response, but its sometimes hard to bite the tongue when faced with stupid, crazy statements like that one. I'll never forget that one trip.


I can sympathize. The one really difficult border guy I ran into in the last few years held me aside for secondary questioning, and kept saying he was going to "send me back home". After a half hour of this, I was biting my tongue, but in my head I was saying "quit threatening and _do_ it you piece of sh**, I actually have things to do today if I'm not getting into the US"


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## hfp75 (Mar 15, 2018)

I came into compliance 8-10 yrs ago (taxes and FBARs). Now each yr I pay and get my taxes/FBARs done. 

At that time I was told renouncing my citizenship was an option but it also could backfire.... I decided to keep it and fix the problem......

The uncle of one of my friends at work renounced his citizenship and now when he crosses the border he’s always harassed. Apparently now (hindsite 20/20), he’d do it differently and just pay the accounting fees. He’s tired of being put in ‘line B’ and having a talk with the border guys every time he crosses....

A year ago on our way to Kona, we crossed US customs, obviously my Canadian passport says I was born in the USA. The customs agent looked at my Canadian passport, handed it back to me and asked for my US passport. I don’t have one. He wasn’t happy, we had a few words, corjile, but pointed - both ways, he closed with, it’s law that Americans enter the United States with a US passport, next time you cross the border you will be crossing as an American using a US passport. He typed in a bunch of notes on the computer and we went on our trip.... later I looked at the passport application, low and behold, it wants your Social Security Number. I wonder if people that are not compliant can get a passport.....

My wife’s aunt, also a dual citizen, had the same ‘talk’ on her last trip......

Just a FYI......


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## Nononymous (Jun 10, 2015)

hfp75 said:


> later I looked at the passport application, low and behold, it wants your Social Security Number. I wonder if people that are not compliant can get a passport.....


It can happen that duals using a Canadian passport with US birthplace will be stopped and told to acquire a US passport. It happened to me once, though despite many notes being typed it never happened again, over probably half a dozen visits in subsequent years. If you are tax compliant, might as well get the passport. 

If you renounce, you no longer have guaranteed right of access to the US. That is a calculation one must make. Lots of people renounce and have no problems entering. It's recommended that you carry a copy of the CLN to explain the US birthplace, if asked.

The US passport application does now request Social Security Number. It is possible to enter all zeroes if one does not have an SSN. The data is supposedly sent to the IRS but there's no evidence that they do anything with it. Tax compliance is *not* necessary to obtain a passport - you will not be refused if you have not been filing. There is a new law coming into effect that will deny passports to anyone with an outstanding debt over US$51k (against which collection measures have been tried and failed) but that is not at all the same as someone who's merely not compliant. 

My strategy as a non-compliant dual with US birthplace was to renew the US passport while living temporarily in Europe (so a totally different address and country - a very minor security measure I figured) and keep it in the back pocket if ever asked. It's halfway to expiration and I've never been asked, but then I barely go to the US now so I expect I won't renew it again.


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## fatcat (Nov 11, 2009)

hfp75 said:


> I came into compliance 8-10 yrs ago (taxes and FBARs). Now each yr I pay and get my taxes/FBARs done.
> 
> At that time I was told renouncing my citizenship was an option but it also could backfire.... I decided to keep it and fix the problem......
> 
> ...


good point

see this: https://www.moodysgartner.com/renouncing-your-us-citizenship-new-law-may-keep-you-out-forever/

this is a good example of what may well happen at some point, the people who pass the laws in the usa are people who are 99.95% likely never to renounce their citizenship and they see those that do as something akin to "soft-traitors" for lack of a better word, renouncers are dropping themselves into a category that no american is going to like

if you have an american birthplace (or any birthplace as we are seeing something like dossiers compiled on people who cross the border) you are going to have a target on your back for life and the assumption that your failure to file FBAR's and IRS forms will never hurt is pure folly

we have no idea what kinds of data will be linked up on the border patrol computers

if you renounce you better be prepared to never enter the usa ever again, the fact that some people renounce and do enter successfully says nothing about the future


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## james4beach (Nov 15, 2012)

For a supposed land of freedom and independence, America sure goes out of its way to trap its citizens and limit their freedoms.

Then again, there are Americans who are vocal against these practices too, and fighting to repeal FATCA: https://www.cbc.ca/news/politics/fatca-canada-u-s-taxation-1.4087644



> Paul said FATCA treats an estimated 9 million Americans living outside the U.S. as guilty until proven innocent.
> 
> "It presumes that every American with money overseas is a criminal with no proof or even suspicion of criminal activity."


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## Nononymous (Jun 10, 2015)

Indeed, one should never renounce without being aware of the possibility, however remote, of never being allowed back into the US. For some that's a huge price to pay, for others it's of no concern.

The Moodys piece is a good reference, but just so you know where they're coming from, they have used the 2017 tax reform as a marketing hook to generate a tremendous amount of business for themselves. Seminars all over the world. I attended, and politely disrupted, one of their events last summer. You can read a long account of it here:

http://isaacbrocksociety.ca/media-a...-part-5-of-5/comment-page-40/#comment-8275298

PS on edit: the comment in part 2 about needing an SSN to obtain or renew a US passport is no longer correct - it is possible to do so without.


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## fatcat (Nov 11, 2009)

Nononymous said:


> Indeed, one should never renounce without being aware of the possibility, however remote, of never being allowed back into the US. For some that's a huge price to pay, for others it's of no concern.


we can agree on this ... also, i am not going to gamble an outsized chunk of my life-savings when i can pay $350 and some spreadsheet time to stay current with the USA



> Then again, there are Americans who are vocal against these practices too, and fighting to repeal FATCA:https://www.cbc.ca/news/politics/fat...tion-1.4087644


oh how i wish it would happen james but rand paul, american citizens abroad, the recent house bill and all the rest of the resisters are the jehovahs witnesses of FATCA, a small, passionate and completely isolated group without any real influence at all

none of these legislative efforts or judicial challenges in either country are going to go anywhere, the fix is in, i would be overjoyed to be proven wrong


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## Nononymous (Jun 10, 2015)

fatcat said:


> none of these legislative efforts or judicial challenges in either country are going to go anywhere, the fix is in, i would be overjoyed to be proven wrong


I think the Canadian challenge might have a reasonable chance. The Charter violations are obvious, the question is whether the government can continue to ignore them on "national interest" grounds. What's also interesting are the demands for reciprocity coming from Europe - potentially classifying the US as a tax haven - and Accidentals in France are also going after the IGA. It won't happen overnight, but in Canada I don't feel threatened so am in no hurry. US-born persons in other countries who are being locked out of banking and investment services have a more immediate problem. 

I don't hold out too much hope for the TTFI legislation, though apparently there is some bipartisan support. It will help those who've been compliant already, but unless it includes immediate relief from FATCA and banking discrimination, it's of no use to an Accidental, certainly not worth the risks of coming into compliance. (Given how few people have made use of the streamlined "amnesty" program, per IRS data, I doubt they'd have many takers.) If they really want to fix the banking problem, forget TTFI, just drop the renunciation fee to $20 and give everyone a CLN.

What I'd call a good outcome is a situation where the Canadian government is forced by a court decision to renegotiate the IGA - which the US might soon be doing with other countries anyway due to its refusal to reciprocate, which it agreed to do - so that the reporting requirements exclude Canadian tax residents and/or citizens. This would be consistent with the collection assistance agreement (CRA won't touch Canadian citizens in Canada on behalf of the IRS) and would effectively return us to the _status quo ante_, the pre-FATCA situation where CBT is on the books but ignored. (CBT is still effectively ignored, by the way. _De jure_, US citizens anywhere in the world must be filing US taxes and reporting accounts. _De facto_, the the IRS does not pursue non-residents with no US assets or income. FATCA created bank access problems, not tax problems.)


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## Eclectic12 (Oct 20, 2010)

Some interesting articles.
https://www.moneylaunderingwatchblo...es-first-ever-conviction-for-violating-fatca/
https://globalnews.ca/news/3309306/...tizen-for-over-1m-for-not-reporting-accounts/
https://www.worldcrunch.com/busines...-tracks-down-accidental-americans-in-france-1




james4beach said:


> For a supposed land of freedom and independence, America sure goes out of its way to trap its citizens and limit their freedoms.
> 
> Then again, there are Americans who are vocal against these practices too, and fighting to repeal FATCA: https://www.cbc.ca/news/politics/fatca-canada-u-s-taxation-1.4087644


Assuming it is the lawsuit in the article is the same one, the court killed it while still commenting on FATCA.
https://www.jrviola.com/tax-news/fatca/2017/09/12/rand-paul-on-fatca-fbar/


Cheers


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## Nononymous (Jun 10, 2015)

> https://www.moneylaunderingwatchblo...es-first-ever-conviction-for-violating-fatca/


Al Capone was jailed for tax evasion - same principle here. They were after a proper financial criminal, and FATCA provided the tool needed to convict. Not a concern for ordinary law-abiding Canadians, I should think.



> https://globalnews.ca/news/3309306/...tizen-for-over-1m-for-not-reporting-accounts/


Pomerantz case. Very funny illustration of how impotent the IRS really is - they couldn't actually serve him with papers in Canada and he had no US assets they could touch. Also, and it's not mentioned in that piece, he was up to some funny stuff with Swiss accounts and a company in the Caymans, while actually living in the US (i.e. he wasn't just some ordinary taxpayer who forgot to do his FBAR reports). Apparently there have been recent developments and he may have actually won in US court so is off the hook.



> https://www.worldcrunch.com/busines...-tracks-down-accidental-americans-in-france-1


The French group is doing great work, making progress. But note from the article that nowhere does it say that the IRS compelled compliance, collected penalties, or even proactively contacted any of these people. They had problems with their banks, and in one case had withholding deducted after the sale of US shares. They learned about US tax obligations. Some became compliant, some renounced after becoming compliant. Others, needless to say, will ignore the US, renounce without compliance if they can afford the fee, or live with the banking restrictions. 



> Assuming it is the lawsuit in the article is the same one, the court killed it while still commenting on FATCA.
> https://www.jrviola.com/tax-news/fatca/2017/09/12/rand-paul-on-fatca-fbar/


Yes, the US lawsuit against FATCA died a very quick death.


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## on2qc (Jan 4, 2019)

james4beach said:


> For a supposed land of freedom and independence, America sure goes out of its way to trap its citizens and limit their freedoms.


I was born in the US and spent three decades of my life there. I've now spent a few decades in Canada as well and this is my true home.

Here is what I can tell you about America vs Canada on taxation: Canadians actually are not soaked with taxes like popular theory suggests. The trends tend to be as follows: Canadians pay more consumption taxes, but are taxed less on property and income. Americans have a lower consumption tax (gas taxes are lower, sales taxes are lower), but Americans are soaked with property taxes and they generally pay more income tax. Tax filing is also more complicated, the only province in Canada where you deal with both the CRA and a provincial tax authority is Quebec. In the US, all 50 states require multiple tax filings with both the IRS and the state. While it isn't a huge headache, it still means two tax filings. And in many locations across America, there are things that Canadians have never dreamed of. *In states like Ohio, cities and municipalities have an income tax. This means you have to file taxes 3 times.* Ohio isn't the only state like this, several US states have municipal income tax laws. Other states, typically southern states, they have an added property tax on things like vehicles. If you're in Arkansas or Virginia you pay an annual car registration fee/tax, but you also have an additional property tax payable not to your local government, but to the state on your vehicle "property". I find it insane, but its true in many states.

When it comes to income taxes, I'm not a tax lawyer so I can only provide my personal experience, but I lived in 5 US states in my life. Each and every one of those states I had more income tax taken out (income and combined Medicare/Social Security payroll taxes) vs my tax bill here in Canada. Its only slight, but income taxes in the US were higher. Here in Ontario I estimate I take home between 3-5% more income. I might lose that when I purchase a home in Quebec, but the ridiculously lower mortgage payment should offset that.

Also, some states like Texas that don't have a state level income tax (you just pay the federal/IRS filing), they jack up other taxes to make up the difference. I have friends in Texas (and I lived there at one point), one in a Dallas suburb has a home valued at $250,000. That price sounds nice and dandy, but he also pays $6500 a year in property and education taxes to the local governments. The pennies he saves by not having a state income tax soaks him on property.

If that mill rate were applied to properties in Toronto, homes would literally have taxes of $19-21,000 per year due to the city. YES, property taxes are sometimes 300-400% higher in many US locations. Canadians have no idea about this. But, those ultra high property taxes in a the Dallas metroplex might be what suppresses the housing prices overall. So I suppose there are two sides to that coin.

At the end of the day, Americans are soaked with taxes and they get such poor public services. At least here in Canada, there is a competence to governance and public service. I don't use the bus system, but for those that do it comes every 10 or 15 minutes. In the US, bus services might run every 45 minutes, and stop at 6pm, and not run at all on Sundays. Here in Canada you can guarantee you have good access to health services, in the US the public health services are scant, many times its low quality, and often they still bill the patient (public hospitals still bill you if you don't have insurance in the US).

So when it comes to America, it can look attractive on the surface when visitors see those cheap sales taxes in the shops or the cheap gas prices with the lower consumption taxes they have, but there is a huge price they pay for that. Canada owns the US and is far better for quality of life, IMO. So long as you aren't buying property in Vancouver or Toronto, this country is a bargain by comparison.

Canadians who don't feel pride in Canada have *no* idea how good it is, its not something you can teach someone. Its a lived experience. I love this country and everything Canada is. We make mistakes, but its one of the best places to live in the world.


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## Nononymous (Jun 10, 2015)

Some recent developments:

1. Charter challenge against the FATCA IGA begins next week. Details, as every, found at Isaac Brock Society.

2. CBC article yesterday: 1.6 million Canadian banking records shared with IRS 

Followed by post at Tax Connections:



> The Canada Revenue Agency (CRA) continues to supply information to the IRS on U.S. Citizen owned investment and bank accounts. According to CBC, CRA has already shared over 1.6 million Canadian banking records with the IRS. Even with the significant sharing of documentation we are still not seeing an increased level of new clients being contacted by the IRS.
> 
> You would think that if the IRS has such a large of amount of banking information from United States citizens abroad they would be enforcing compliance by reaching out to these Americans. This might be something that has yet to happen and may be on the horizon.


My reply, which they will usually publish after a short delay:

You’d think, wouldn’t you? Here, two possible explanations for why there have been zero reports of non-compliant US persons in Canada being contacted by the IRS on the basis of FATCA reporting:

1. The IRS does not have the ability or the resources to sift through mountains of messy FATCA data and begin efforts to contact names on the list that don’t match to current taxpayers. Note that much of the data will come without SSNs, as it is not mandatory that customers supply that information for existing accounts, only that institutions request it annually. Furthermore, the existence of a Canadian account is not in itself evidence of a filing obligation, since it says nothing about income; it’s not necessarily the case that a non-filer is not compliant with US tax obligations. More importantly, there’s next to no ROI in this effort because most of the individuals identified by FATCA would owe little to no tax (due to FEIE or FTC) and the US has no legal ability to collect penalties or taxes owed from Canadian citizens (i.e. duals) per the tax treaty. In other words, maybe the reason the IRA hasn’t pursued anyone is because they know full well they generally can’t “enforce compliance” and would be wasting their time and money attempting to do so.

2. Looking at the numbers in the report, it states that 600k accounts were reported in 2016 and 2017 (interesting that the number has not gone up). If we assume most FATCA-compliant customers will have multiple accounts, then it’s maybe 100k individuals being reported. That is approximately 10 percent of the estimated 1 million US persons in Canada. I suspect that’s less even than the number of permanent residents without Canadian citizenship. My hunch is that a great many of the people who’ve identified themselves to their banks as US persons, and are thus subject to FATCA reporting, were already compliant with US taxes (globally the compliance rate for non-resident US citizens is thought to be 11-15 percent). The vast majority of US persons in Canada are duals or “accidentals” (children born to Canadians temporarily in the US but with no other tie to the country) who likely do not self-certify as US persons when asked by their banks because they don’t believe themselves to be US citizens, or refuse to do so on principle, or in some cases don’t understand the rather elliptical questions about “tax residency in another country” on the FATCA/CRS forms provided to them when opening new accounts. In short, FATCA enforcement in Canada is not very strict and relatively easy to sidestep even for those with a US birthplace. Read the detailed CRA guidance on FATCA compliance and you will note that unless it has other hard evidence of US citizenship, banks must accept without question a customer’s self-certification, and ID showing birthplace is not required to open an account.

The short version: it’s very easy for Canadians to avoid FATCA reporting; if reported nothing much will happen because the IRS can’t deal with all the crap data it’s getting and it knows that pursuit of non-residents is going to be a huge money-loser.


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## fatcat (Nov 11, 2009)

Nononymous said:


> Some recent developments:
> 
> 1. Charter challenge against the FATCA IGA begins next week. Details, as every, found at Isaac Brock Society.
> 
> ...


you make a lot of assumptions some of which may be true and some false, the question is, are you going to get caught by the false assumptions ? 

sure auditing and collecting taxes and fines from us-tax-required people will be time consuming and costly and in most cases, not worth the effort, because most of us are small fry ... the law is really aimed at the large fry and i definitely think that people with account values exceeding say 3,4,5 million should be looking over their shoulders because they are worth chasing (2-million is the exit tax threshold)

this is going to be a long process, like herding cats ... if the americans hold FATCA high as a bargaining chip in future negotiations over trade or security we may well see the canadian government cave and allow greater intrusion into people lives

i now have to hand over my SIN number here in BC to avoid the speculation tax, its not right but is a good example of data creep which may work its way into the canadian financial system

finally, this gave me a good laugh, if you were born in the united states and then exited a week later in the arms of your parents, guess what ? you can hold your breath and think yourself not an american all you want but you *are* an american (with all the rights and privileges which some people die trying to get by the way) and i promise you that the judge, any judge, is going to so affirm if you have the unpleasure of standing in front of him or her

take a guess what happen when you tell the judge that: "i don't recognize the right of the usa to tax me when i i live outside the country"


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## Nononymous (Jun 10, 2015)

fatcat said:


> sure auditing and collecting taxes and fines from us-tax-required people will be time consuming and costly and in most cases, not worth the effort, because most of us are small fry ... the law is really aimed at the large fry and i definitely think that people with account values exceeding say 3,4,5 million should be looking over their shoulders because they are worth chasing (2-million is the exit tax threshold)


Under current law, anyone with Canadian citizenship literally cannot be chased, provided of course no US assets.




> finally, this gave me a good laugh, if you were born in the united states and then exited a week later in the arms of your parents, guess what ? you can hold your breath and think yourself not an american all you want but you *are* an american (with all the rights and privileges which some people die trying to get by the way) and i promise you that the judge, any judge, is going to so affirm if you have the unpleasure of standing in front of him or her
> 
> take a guess what happen when you tell the judge that: "i don't recognize the right of the usa to tax me when i i live outside the country"


Under what circumstances would such a person find themselves standing in front of a judge? Ignoring US tax filing obligations is not against Canadian law.

And there are indeed people such as you describe who honestly are not aware that they have US citizenship. It was one such person posting here who first attracted my attention to this forum, a few years ago.

PS on edit - somewhat apropos: https://www.newsmax.com/finance/kleinfeld/fatca-success-tax-money/2019/01/07/id/897136/


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## fatcat (Nov 11, 2009)

Nononymous said:


> > Under current law, anyone with Canadian citizenship literally cannot be chased, provided of course no US assets.
> 
> 
> at present but all of this may change which is the crux of my argument
> ...


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## Nononymous (Jun 10, 2015)

You and I agree here. The laws may one day change. Which is why anyone with a US birthplace should keep themselves informed and make the appropriate decisions.

At present the only people who've been screwed are those who've come into compliance (due to capital gains on sale of primary residence, or the transition tax on money kept within their business). Those who've remained non-compliant are far better off. 

Yes, that may one day change, but for now I'd say "why take the chance?" is an argument against compliance, not for compliance.


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## Nononymous (Jun 10, 2015)

fatcat said:


> sure, there are some few people who may not really know where they were born but 99.99% of us do know ?


They know that they were born in the US but they do not know that this means automatic US citizenship if they left as children. I agree, it's a small number, but it's probably greater than 0.01 percent. We knew one of them here, that long thread a few years back.


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## Eclectic12 (Oct 20, 2010)

It would be interesting to see some data on the breakdown.

Not that it is anything but an anecdote but so far, those with dual citizenship knew or had been told they had it. What they did not expect/investigate was the part about citizenship = taxed on world wide income with the need to file a tax return.


If we are thinking of the same CMF threat - the poster did inquire so it was more about the laws changing and/or bad information. There there's also that prior to 1967, the US banned dual citizenship.


Cheers


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## fatcat (Nov 11, 2009)

Eclectic12 said:


> It would be interesting to see some data on the breakdown.
> 
> Not that it is anything but an anecdote but so far, those with dual citizenship knew or had been told they had it. What they did not expect/investigate was the part about citizenship = taxed on world wide income with the need to file a tax return.
> 
> ...


FBAR's and the IRS form required to report foreign-domiciled accounts were genuinely not well known and were widely ignored and the IRS wasn't really even enforcing them 

but the requirement that US citizens, those born in the USA file a tax return every year in the USA has been tax policy and law for decades and anyone not compliant is willfully ignoring the law

every expatriate in the world that makes anything like a decent income knows they need to file with the IRS, every one, of course if they tell themselves nursery rhymes about why they are special and they don't need to file, fine, they can reap the whirlwind but lets not play games and say that people don't know, they do know, quite well


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## Nononymous (Jun 10, 2015)

fatcat said:


> but the requirement that US citizens, those born in the USA file a tax return every year in the USA has been tax policy and law for decades and anyone not compliant is willfully ignoring the law


It is not a willful violation if one is not aware of the requirement. Clearly, a great many people have not been aware of the requirement. (At a certain point the question of willfulness becomes a theological or philosophical debate, but whatever.) 



> every expatriate in the world that makes anything like a decent income knows they need to file with the IRS, every one, of course if they tell themselves nursery rhymes about why they are special and they don't need to file, fine, they can reap the whirlwind but lets not play games and say that people don't know, they do know, quite well


Actually not, based on forum commentary elsewhere. But you speak only of expats. Accidentals - duals with a US birthplace - most definitely were not (are still not, in large numbers) aware of the filing requirements.


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## fatcat (Nov 11, 2009)

Nononymous said:


> It is not a willful violation if one is not aware of the requirement. Clearly, a great many people have not been aware of the requirement. (At a certain point the question of willfulness becomes a theological or philosophical debate, but whatever.)
> 
> 
> 
> Actually not, based on forum commentary elsewhere. But you speak only of expats. Accidentals - duals with a US birthplace - most definitely were not (are still not, in large numbers) aware of the filing requirements.


both statements are categorically false, this issue (the need to file with the IRS and to file FBAR's) has been widely reported in every major canadian newspaper going back now 10 years

there are multiple stories every year in the financial section of the globe, the post, the star and all of the smaller papers

everyone knows and you and everyone else know they know ... you are just living in a fantasy world, they just don't want to believe it ... which is fine fantasy worlds are a lot more fun than the consensus version

but guess what ? issac brock are gonna get their *** handed to them by the court ... they are gonna lose ... and they are gonna appeal and they are gonna lose again

and the need to file on worldwide income for us-required tax filers is likely never gonna end, not tomorrow, not anytime in the near future

those that don't get compliant can spend the rest of their lives looking over their shoulder

it ain't worth it me ... if you and the rest of the resisters want to, be my guest


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## Nononymous (Jun 10, 2015)

Seriously, read the IRS definition of "willful" - they've only been able to prove willfulness in a few cases where FBARs were not filed but returns were signed and the filer failed to check the bit about declaring foreign accounts. They've never proven it for a non-filer. In fact they've never prosecuted a non-resident non-filer.


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## Numbersman61 (Jan 26, 2015)

fatcat said:


> both statements are categorically false, this issue (the need to file with the IRS and to file FBAR's) has been widely reported in every major canadian newspaper going back now 10 years
> 
> there are multiple stories every year in the financial section of the globe, the post, the star and all of the smaller papers
> 
> ...





Nononymous said:


> Seriously, read the IRS definition of "willful" - they've only been able to prove willfulness in a few cases where FBARs were not filed but returns were signed and the filer failed to check the bit about declaring foreign accounts. They've never proven it for a non-filer. In fact they've never prosecuted a non-resident non-filer.


Interesting article 
https://www.cbc.ca/news/politics/taxation-canada-u-s-irs-1.4025880


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## Nononymous (Jun 10, 2015)

Numbersman61 said:


> Interesting article
> https://www.cbc.ca/news/politics/taxation-canada-u-s-irs-1.4025880


This one isn't really relevant to someone who was never a US resident, or never filed. I'll just quote what I wrote earlier on this thread:



> Pomerantz case. Very funny illustration of how impotent the IRS really is - they couldn't actually serve him with papers in Canada and he had no US assets they could touch. Also, and it's not mentioned in that piece, he was up to some funny stuff with Swiss accounts and a company in the Caymans, while actually living in the US (i.e. he wasn't just some ordinary taxpayer who forgot to do his FBAR reports). Apparently there have been recent developments and he may have actually won in US court so is off the hook.


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## Eclectic12 (Oct 20, 2010)

fatcat said:


> ... the requirement that US citizens, those born in the USA file a tax return every year in the USA has been tax policy and law for decades and anyone not compliant is willfully ignoring the law
> 
> every expatriate in the world that makes anything like a decent income knows they need to file with the IRS, every one, of course if they tell themselves nursery rhymes about why they are special and they don't need to file, fine, they can reap the whirlwind but lets not play games and say that people don't know, they do know, quite well


Most people go by what their local experience is and whomever they talked to. As they have never been to the USA and don't have a local tax regime that is similar - without investigation, there isn't anything to tell them otherwise.

It sounds like you have been proactive but that isn't always the case.




fatcat said:


> both statements are categorically false, this issue (the need to file with the IRS and to file FBAR's) has been *widely reported in every major canadian newspaper going back now 10 years*
> 
> there are multiple stories every year in the financial section of the globe, the post, the star and all of the smaller papers ...


I can say the same about the tax implications of holding ETFs with things like RoC as well as phantom distributions yet the questions here as well as the reports in the media indicate a lot of people assumed ETFs have the same tax treatment as common stock, which is not the case.

Do they really "know" the implications based on some articles not and then, which they may have missed? 


Cheers


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## fatcat (Nov 11, 2009)

ok, i will grant that what you and nononymous assert may be true for a slice of the population, i.e. some people may not be fully aware of the requirement to file on worldwide income if you are us citizens

but that slice is a very particular slice, it is a slice composed of people what basically have no money, no real assets or investments to speak about

the category that actually has assets are well informed on this subject because there doesn't exist on the planet anyone who has money that doesn't want to keep it

the notion that these people are going to go say 5 years of filing taxes in canada and not be informed along the way that they should be filing in the usa is basically zero, maybe a year, maybe 2 but no more than 5 and we are now 10 years in of the ramping up of this program

all kinds of people want to pretend that they don't know, but that is what children do in backyard forts, they pretend

the IRS and treasury are showing forbearance but that will (and should) end at some point and if i have assets (i do) i don't want to be on the wrong side of the issue

the IRS has been hearing "i didn't know" for a long, long, .... long .... time and it gives them a good chuckle, they chuckle and then they threaten you with large fines that they then may or may not forgive


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## Nononymous (Jun 10, 2015)

fatcat said:


> the IRS has been hearing "i didn't know" for a long, long, .... long .... time and it gives them a good chuckle, they chuckle and then they threaten you with large fines that they then may or may not forgive


...but won't be able to collect (assuming of course no US assets etc.)


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## Eclectic12 (Oct 20, 2010)

fatcat said:


> ... maybe a year, maybe 2 but no more than 5 and we are now 10 years in of the ramping up of this program
> all kinds of people want to pretend that they don't know ...


It comes to mind that the TFSA rules that I read back in 2009 clearly spelled out that the investment choices were more than a savings account and that the withdrawals become contribution room the following year.

If the length of time the program has been out there with the number of articles being published across the media means people "know" and "are pretending" ... what's your theory as to why anonymous survey participants are pretending for the TFSA rules?

I can see the value in pretending to gain some sympathy, maybe get out of fines but none of these exist for the survey. 


Cheers


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## Nononymous (Jun 10, 2015)

fatcat said:


> the category that actually has assets are well informed on this subject because there doesn't exist on the planet anyone who has money that doesn't want to keep it


I would place in this category someone like Ms. Herman, featured in several CBC articles. Out of desire to protect her business and assets, she came into compliance. She even paid capital gains on the sale of a primary residence (something not subject to Canadian taxes) to do so. And then along came the transition tax, and a potentially ruinous six-figure US tax bill, plus additional Canadian taxes if money were taken out of the business to pay the IRS.

Seems to me that she would be much better off if she had not decided to "protect" herself by filing US tax returns, from the perspective of wanting to keep her money.


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