# possibly of interest to those in Canada



## Nononymous (Jul 12, 2011)

Likely won't amount to much, but interesting all the same:

New IRS amnesty program offers expats a "ray of hope" - The Globe and Mail

I still don't see much upside to compliance, personally.


----------



## elaineexpat67 (Jun 21, 2014)

But don't you think that non compliance may be difficult for people who cross the border frequently?


----------



## Nononymous (Jul 12, 2011)

No.

There's no evidence of tax status being checked at the border. If the IRS had begun proceedings against someone, they'd presumably know about it and would be smart enough not to enter.

One small caveat: Dual (US) citizens crossing the border need to use a US passport. The passport application requires the SSN so there's a chance one's data could be passed to the IRS after passport renewal. But currently no evidence that this actually happens.


----------



## elaineexpat67 (Jun 21, 2014)

Well, thanks for that information. 

I've got many friends who are very worried about filing past taxes. 

I just went through months of hell doing my own taxes and would like very much to find a way to avoid doing that again.


----------



## elaineexpat67 (Jun 21, 2014)

*Expat Tax*

Does anyone know if the tax programs like Turbo Tax or Tax Act deal with Canadian mutual funds?


----------



## Nononymous (Jul 12, 2011)

elaineexpat67 said:


> Well, thanks for that information.
> 
> I've got many friends who are very worried about filing past taxes.
> 
> I just went through months of hell doing my own taxes and would like very much to find a way to avoid doing that again.


I was having a similar discussion with another dual citizen last night. Honestly I think the Canadian duals should just relax. Unless you have property in the US or something I figure it's currently very safe to still ignore the tax silliness. Each passing year the amnesty deals get better, and with FATCA excluding all the registered accounts it's going to be pretty easy to stay off the radar. (And if worst comes to worst, the Canadian government will not allow collection against its own citizens.) So think long and hard before giving up your anonymity. You'd have to be pretty rich to trigger FATCA reporting.


----------



## BBCWatcher (Dec 28, 2012)

There's an important caveat here that the law could change. Currently U.S. citizens and U.S. nationals who are delinquent in paying their child support (above a threshold) are barred from obtaining or renewing U.S. passports. Congress has proposed extending that same sort of rule to tax delinquents, and that legislation has even passed the U.S. Senate in the recent past. Thus far the tax-related passport provision has been removed in conference committee.

My political assessment is that it's only a matter of time before Congress makes another attempt to pass this provision, and I think they'll be successful. Within the next 3 to 7 years, I'd say. It's incongruous that child support is deemed a more significant obligation than taxes, and the framework for barring passport issuance is in place already. I don't know of a winning political argument that tax delinquents should be treated more favorably than deadbeat fathers and mothers.

Note that USCIS already requires U.S. citizen and U.S. national sponsors to be current on their tax filings, so if you ever want to sponsor someone (e.g. a foreign spouse) for residence in the U.S. then you need to have your filings in order.


----------



## Bevdeforges (Nov 16, 2007)

I'm with Nononymous here. There's not much they can do until and unless someone is actually "tax delinquent" - which is something completely different from simply not having filed your tax returns for the prior (or any other) year. There are simply too many valid reasons for not having filed a tax return at all - usually because you are not required to do so for any number of valid reasons.

Now, after the IRS has sent you a letter asking you to pay up $x based on whatever information they have, that's a completely different matter. But to get to that point takes some period of time and at least a cursory exchange of letters.

The US tax system is based upon "voluntary compliance" and always has done.
Cheers,
Bev


----------



## Nononymous (Jul 12, 2011)

Yup, big difference between "delinquent" and non-compliant. Given that the US doesn't get Canadian income data, how can they know if one meets the minimum threshold for filing? Sure, if they can match up FATCA data with other information and pin large account balances to individuals, there might be something worth looking into, for a small number of people at any rate. But with FATCA excluding all the registered accounts, and the high thresholds for banks' retroactive investigation of US-person-ness, I'm thinking that most of us normal happy willfully disobedient folk wouldn't be identified as delinquent. 

And if you see signs that the law might change, renew your passport beforehand - it'll buy you ten years to think about what to do next.


----------



## BBCWatcher (Dec 28, 2012)

Nononymous said:


> Sure, if they can match up FATCA data with other information and pin large account balances to individuals, there might be something worth looking into, for a small number of people at any rate. But with FATCA excluding all the registered accounts, and the high thresholds for banks' retroactive investigation of US-person-ness, I'm thinking that most of us normal happy willfully disobedient folk wouldn't be identified as delinquent.


As I've said before, and I'll say again, the FATCA agreements only describe the _minimum_ level of cooperation. They do not prohibit data sharing above the minimum. I would not hang my hat on all financial institutions and governments 100% reliably reporting only the minimum. If/when they get an agreement-exempt account miscoded and/or inadvertently dumped into their reports, what's done is done.

The reason FATCA and its little brother FBAR exist is to smoke out non-compliant individuals by creating easy-to-prove "failure to report" crimes. And these things can cascade quite easily and probably will in the not-too-distant future. Do you really want to be signing a U.S. passport application, under penalty of perjury, that you're (among other things) FATCA and FBAR compliant?

In any event, I would not dismiss the risks out of hand. We can quibble about how much risk there is (and will be), but it's not zero. Banks don't write perfect financial data reporting filters 100% of the time. In at least a few cases the U.S. Treasury and IRS will receive more than they asked for -- it's just inevitable.

Up until just a few years ago lots of people hung their hats on Swiss bank secrecy laws. How's that working out now?


----------



## Nononymous (Jul 12, 2011)

The current passport application only asks for one's SSN, under penalty of perjury. Indeed, the next one might look different, 9.5 years down the road. (Previously, of course, there was a tax compliance declaration - with a penalty for perjury set at $500, which wasn't a bad deal, really, probably less than it costs lots of folks to have a CPA file their returns.)


----------



## Bevdeforges (Nov 16, 2007)

Last time I renewed my passport, the Consulate said specifically to ignore the nonsense on the back of the form when signing. There was something there about "I have not taken any other nationality" too - which is technically supposed to result in your US citizenship being revoked, but it isn't any more. You're "supposed" to provide your US SSN but again, the Paris consulate has long said that, if you refuse to provide that, they have to let someone (I think the SS administration know) but that they cannot refuse you a passport for that reason.

FATCA and FBAR were set up to root out willful tax evasion, not set up the little people for technical "failure to file" charges when they owe little, if any, taxes at all. Foreign banks have no reason to have or request US SS numbers from their customers unless their accounts obviously fall into the reportable range, and the IRS is pretty much powerless to "stick" foreign income to an individual if they don't have a US SSN to match up.
Cheers,
Bev


----------



## Nononymous (Jul 12, 2011)

How marvelous about the passport. Maybe I should've gone and done mine in person last fall.


----------

