Canadian industry claims win in long fight over U.S. crackdown on tax evasion

An article for the gullible.

Financial Post | Business

Canada’s investment and banking industries hailed a key victory Tuesday in five-year fight to dull the impact of onerous new U.S. tax rules expected to affect about a million Canadian residents and dual citizens.

A newly ratified inter-governmental agreement with the United States excludes registered accounts for education, retirement, and disability savings from the client holdings banks must report to tax authorities under the U.S. Foreign Account Tax Compliance Act.

The headache isn’t gone, however, for individuals living in Canada who must file taxes in the United States as a result of their citizenship. According to tax experts, aside from RRSPs, the U.S. Internal Revenue Service has not revealed whether it will grant similar tax-deferred or tax-free treatment to the savings vehicles.

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“How they are taxed depends on their classification under U.S. law which remains unclear,” says U.S. tax lawyer Max Reed. “There is no guidance from the IRS…

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