No discussion of FATCA. But, of course there is no one issue that’s important enough to destabilize the relationship between Canada an and the U.S.
Finance Minister Flaherty’s Federal budget predicts the current deficit in finances to continue until 2016 when he expects a surplus of 6.4 billion.
Like his counterparts around the world his February 11th budgetary statement focused on job creation, innovation and infrastructure.
As a member of the G8, G20 and the OECD, Flaherty also addressed international tax reform in the areas of tax transparency and the prevention of tax base erosion and profits shifting (BEPS).
It is for this reason that Canada’s 2014 budget merits more than a passing interest by treaty-based offshore financial centres (OFCs).
In this regard, Flaherty has called for comments from stakeholders on a series of questions designed to inform a national action plan to combat tax avoidance, including:
- What are the impacts of international tax planning by multinational enterprises on other participants in the Canadian economy?
- Which of the international corporate income tax…
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““We’ve seen people relinquish their citizenship in the past, so it’s not that these are extremely large numbers,” said Sabates. “What’s startling is that it’s happening at all. It’s not necessarily the expat that moves to Switzerland for a job, gets married, and ends up staying longer than they were thinking. It’s the children of that expat who have acquired citizenship by birth through their parents, and they may have no connections with the United States. They’re finding out that they have these tax-filing requirements at the same time that they’re finding out what being a U.S. citizen means. We’ve seen a lot of family-based citizenship abandonment where you’ve got a couple of kids who have gotten citizenship through their parents. Before they start getting into the working world and developing their wealth, the U.S. tax issues crop up and they’re relinquishing their citizenship.”
This article from Accounting Today online. I especially like the quote from Roland Sabates, H&R Block director of expat services who said, “In the last year a lot of the potential clients that are contacting us are terrified.” I can understand this for an freshman expat newly exposed to the myriad of regulations, forms, and filing requirements over and above what the ordinary stateside filer has been exposed to and become accustomed. FBAR, FATCA, ACA, FinCEN, BSA, E-Filing and FIGMO. Just kidding about that last one. If you have a US military background, you know what I mean. If no, I have provided a link to help you understand my feelings about this whole thing. So here’s the article……..
Nearly 6 million Americans living abroad are facing a June 16 deadline to file…
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“Decisions regarding opting out should be carefully considered depending upon the taxpayers responses to each of the foregoing questions.”
For more than a year, numerous taxpayers with previously undisclosed interests in foreign financial accounts and assets have been seeking participation in the current IRS offshore voluntary disclosure program (the OVDP) which began in 2012, modeled after similar programs in 2009 and 2011.
Taxpayers participating in the OVDP generally agree to file amended returns and file FINCEN Form 114 (formerly Form TD 90-22.1, Report of Foreign Bank and Financial Accounts), FBARs, for eight tax years, pay the appropriate taxes and interest together with a 20% accuracy related penalty and an “FBAR-related” penalty (in lieu of all other potentially applicable penalties associated with a foreign financial account or entity) of 27.5% of the highest account value that existed at any time during the prior eight tax years. The OVDP does not have a stated expiration date but can be terminated by the IRS at any time as to specific classes of…
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“The Internal Revenue Manual suggests that “willfulness may be attributed to a person who has made a conscious effort to avoid learning about the FBAR reporting and recordkeeping requirements.” However, the willfulness determination should be based on the actual facts and the context in which statements are made (or not) rather than assertions in a legal pleading.”
U.S. taxpayers with previously undisclosed interests in foreign financial accounts and assets continue to analyze and seek advice regarding the most appropriate methods of coming into compliance with their U.S. filing and reporting obligations. Many are pursuing participation in the current IRS offshore voluntary disclosure program (the OVDP which began in 2012), modeled after similar programs in 2009 and 2011. Taxpayers participating in the ongoing 2012 OVDP generally agree to file amended returns and file FBARs for eight tax years, pay the appropriate taxes and interest together with an accuracy related penalty equivalent to 20 percent of any income tax deficiency and an “FBAR-related” penalty (in lieu of all other potentially applicable penalties associated with a foreign financial account or entity) of 27.5 percent of the highest account value that existed at any time during the prior eight tax years.
Under the 2009 OVDP, the FBAR-related penalty was 20 percent…
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