Thanks to Barrie McKenna of the Globe and Mail for this article and to his support on this important issue during this most difficult time for U.S. citizens residing in Canada and the rest of the world. Thanks also to Finance Minister Flaherty and the MPs who have supported Canada/U.S. dual citizens during this time.
On December 7, 2011 the IRS posted a Fact Sheet providing information about this issue. I have written some commentary about the Fact Sheet here.
The situation is indeed dismal. I don’t understand everything in the following article, but I can see that this is going to:
1. Add more bureaucracy and cost to filing your U.S. tax return – it is not clear how this is intended to impact expats (if they are considered at all);
2. Clearly interfere with your ability to invest and plan for retirement. The U.S. has become a nation of forms and bureaucracy.
The U.S. government is aliready taxing unearned and undistributed gains when it comes to PFICs (and perhaps more). Stop for a moment and think what this means. The idea behind income taxation is that a certain percentage of what you receive as INCOME is to go to the government as your contribution toward running the government. In its most simple terms, this means that (imagine a tax rate of 20%) that if you receive $100 then $20 goes to the government. The taxpayer does not receive all of that he was paid. When it comes to taxing “unearned income”, one needs to ask the following question: Continue reading →
“And for the correction: the definition of “wealthy” is based upon total assets and having paid and average of $150,000 of tax over the past 5 years ( not annual income ). Since most do not trigger that threshhold, the entire process is really not that burdensome at all.”