Former Canadian Prime Minister John Turner is dual citizen. So too are Canadian politicians: Stephane Dion, Thomas Mulclair, David Alward, and (according to the Government of Canada site) Green Party Leader and MP Elizabeth May was born in the U.S.
On January 9, 2012 the IRS reopened “OVDI” (Offshore Voluntary Disclosure Program). Some people with past compliance problems will surely consider (with the encouragement of the “cross border professionals”) whether to enter OVDI. The Isaac Brock Society issued a press release warning people to not enter OVDI without carefully considering the merits. Obviously nobody should enter OVDI without a careful consideration of the penalties. At the risk of oversimplification (and this post is not legal advice or any other kind of advice):
1. If you enter OVDI, in addition to paying any taxes owing, you are agreeing to pay penalties of a percentage of your net worth (a range from 5% to 27.5%).
2. If you do not enter OVDI and information return penalties become an issue (outside the context of voluntary disclosures), they will not be automatically presumed (but again this is heavily dependent on the circumstances and you should absolutely get legal advice).
The following comments are part of a thread. I thought they were worth a separate post. They are a conversation between a former IRS attorney and a famous “minnow”. They are relevant to the issue of penalties for failing to have filed information returns.
Interpret this as you will. It is not offered as legal advice. But, it does raise issues that might we worth discussing with your lawyer. Thanks to Mr. Mopsick. It is a rare lawyer indeed, who is willing to talk about anything but OVDI! You may want to read the complete post before reading these comments. (I have made no effort to fix the typos in these comments.) Continue reading →
It is true that I have taken the steps to renounce, so my feeling is I’m done. However, my task now is to make sure Canadians know they should not put anyone with Dual US citizenship in a position of signing authority or any kind of business partnership. As we both know this exposes Canadians to the IRS through FBAR reporting. Also, I am concerned about Canadian politicians who hold dual US citizenship. I think this should be an issue in any upcoming provincial and federal election.
Congratulations to Thomas Mulcair
He is now the leader of the NDP which is Canada’s Official Opposition. Also, thanks to the NDP for their attention and support on FATCA, FBAR and the IRS assault on dual citizens in Canada. Mr. Mulcair is a patriotic Canadian citizen. He is also a citizen of France. This fact was well known. It did not prevent him from becoming leader of the NDP. But, what if Mr. Mulcair had been a dual U.S./Canada citizen? Or more specifically: what if Mr. Mulcair had been a U.S. citizen? Should this have made a difference? I believe this answer is yes. Here is why. Continue reading →
The Congressional Progressive Caucus, one of the larger Democratic Party caucuses, has proposed to end the Foreign Earned Income Exclusion in their 2013 “Budget For All”, details of which were revealed yesterday following a vague press release last week. As U.S. persons abroad have already learned, when American homelanders use words like "all" and "us", we are decidedly…
The IRS has proudly trumpeted OVDP and OVDI as successes. Both programs were understood to be attempts to go after “big time tax evaders”, “whales”, U.S. residents who were using “offshore bank accounts” and entities to hide income from the U.S. Treasury. That has been the conventional wisdom up until now. Of course, these programs also have had “well known” and “well documented” side effects. Specifically the “collateral damage” suffered by U.S. Green Card holders and U.S. citizens living abroad. But, of course as good Americans, we understand that this “collateral damage” is understandable, completely appropriate, and a necessary incident of good citizenship. To put it simply: A good American citizen or Proud U.S. Green Card Holder, should be prepared to suffer this “collateral damage”. Your “collateral damage” is your “Contribution to America”.