Don’t panic, American citizens in Canada: The IRS is not coming to seize your house

https://twitter.com/USCitizenAbroad/status/574509081219764224

The comments to this article and other comments  express the concern over the content and the purpose of this article.

Two points:

1. U.S. tax law is NOT enforced by the IRS, it’s enforced by the tax compliance community.

2. Therefore, the tax compliance community has a responsibility to NOT “invent” the law that they are enforcing. For example, many tax practitioners in Canada assume that a TFSA is a “Foreign Trust” for U.S. tax reporting purposes. Income from a TFSA is taxable on the U.S. tax return. If it were a “Foreign Trust” it would be subject to additional (expensive) reporting requirements and penalties (think Form 3520). The author of this Financial Post article, Max Reed has been helpful  in taking the position that the TFSA is NOT a Foreign Trust for U.S. tax purposes.

 

 

Financial Post

One million American citizens in Canada face double tax troubles. Max Reed explores these challenges in a spring series.

This spring, a new tax law hangs heavy over U.S. citizens who call Canada home.

The U.S. Foreign Account Tax Compliance Act, or FATCA, has generated a lot of attention because, as of July 1, 2014, it requires Canadian financial institutions to send information about their U.S. account holders to the Canada Revenue Agency, who will hand the info off to the Internal Revenue Service.

It’s all part of an IRS crackdown on foreign tax evaders that began in 2011. FATCA, understandably, frightens people.

Americans in Canada (U.S. citizens, certain U.S. green card holders, those who have a U.S. address) have always been expected to file, but FATCA makes these tax obligations more pressing.

This series will try to enlighten U.S. account holders and help them understand the implications in this…

View original post 555 more words

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s