# Tax compromise?



## 416 (Sep 20, 2011)

Jacobson's October 10 speech



> We are going to work together to see if we can't find a way to accommodate grandma -- and others -- here in Canada. But we have to figure out a way to do it without letting the person who is trying to evade taxes in the Cayman Islands off the hook. My message on this one is to sit tight. We are not unreasonable. We are not unsympathetic. We are not irresponsible.


This seems to sort of kind of maybe hint at some kind of compromise. From the IRS's side, their ideal of total compliance from Canada would involve hundreds of thousands of inexpertly prepared returns, submitted on paper, almost none of which would show any tax due. If they're understaffed, I can't imagine they want to deal with that. A dark part of me wonders if they plan to make up the revenue with penalties, but then the penalties aren't enforceable in Canada. 

If there's something in the works, what do we think it would look like?

One possible compromise would involve a deal with the CRA in which USCs resident in Canada with no US income attached a form to their Canadian returns with their SSN, a statement that they had no US source income, and an acknowledgement that the IRS could require them to file a formal return if wanted. This system could work well in a few First World countries with lots of USCs - Canada, Australia, the UK.


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## Bevdeforges (Nov 16, 2007)

416 said:


> If there's something in the works, what do we think it would look like?
> 
> One possible compromise would involve a deal with the CRA in which USCs resident in Canada with no US income attached a form to their Canadian returns with their SSN, a statement that they had no US source income, and an acknowledgement that the IRS could require them to file a formal return if wanted. This system could work well in a few First World countries with lots of USCs - Canada, Australia, the UK.


Don't hold your breath on that one. It's the US Congress that passes these tax laws and then passes them off to the IRS to "write the regulations." The IRS only has the power to compromise to the point where they are fulfilling the intent of the law that Congress passed.

US Citizens are still obligated to file returns no matter where in the world they are resident, and the IRS doesn't have the power to change that. The FATCA/FATCAT requirements were tagged onto an act called HIRE that was intended to create jobs in the US. That's what is going to have to change to get any meaningful compromises on an official basis. (Though the current rage for cutting governmental budgets does bode well for tying the IRS' hands when it comes to auditing any and all forms and declarations from overseas.)
Cheers,
Bev


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## 416 (Sep 20, 2011)

That's useful, Bev - tx


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