Is This Canadian Baby An American Tax Cheat?

Is This Canadian Baby An American Tax Cheat?

A Canadian baby is learning about taxes, banking and activism at a tender age. The eight month old girl received a “Dear Valued Customer” letter from her Canadian bank when she was six months old advising her that her account information may be provided to Canada Revenue Agency to pass on to IRS.  The wee “Valued Customer” was directed to complete, sign and mail forms to the bank.

Baby Elle (not her real name) and her Canadian parents were shocked.  The money in her small account was a gift from her Canadian great grandmother. Baby Elle did not sit quietly in her high chair. With the help of her Nana’s friend Lynne, Baby Elle wrote to Canadian Prime Minister Justin Trudeau and American President Barack Obama and posted it at Maple Sandbox.

Dear Prime Minister Trudeau and President Obama:

Why do you think I am a tax cheat?

I am eight months old. I live with my Mommy and Daddy in Canada.

I can’t walk or talk yet. So my Nana’s friend Lynne is helping me write to you.

At Christmas time Mommy and Daddy opened a small savings account for me in Canada. When I was six months old in February, TD Bank sent me a letter and other stuff.

I can’t read. So Nana read it for me.

I don’t know what the gibberish in the letter means. Nana says it’s crazy. I believe my Nana.

The letter says TD will squeal on me to Canada Revenue Agency (CRA). Then the CRA will tattle on me to U.S. Internal Revenue Service (IRS) for FATCA. What’s a FATCA?

I don’t know what a citizen is. But I’m a double one.

I was born in the United States. My Mommy and Daddy are Canadian citizens. The Canadian government sent me a letter saying I am too. But I have a blue book that says I’m a U.S. citizen too.

TD says because they know I was born in the United States, I have to complete, sign and mail forms to them.

How can I? I can’t even print yet.

President Obama: Why do you want my information? What will you do with it?

Prime Minster Trudeau: Why are you giving your friend Mr. Obama information about me? Why are you helping him? Why aren’t you helping me?

Bye Bye       

Baby Elle
Vancouver, British Columbia

Baby Elle was born in New Jersey when her parents were working there.   They returned to Canada to raise Baby Elle.  They had no idea of the Foreign Account Tax Compliance Act (FATCA) implications of providing Baby Elle’s American birth certificate to open the account in her name. The funds in Baby Elle’s account are not enough to pay the $2,350 U.S. fee to renounce American citizenship. Even if Baby Elle could pay the fee, the American government will not permit her to renounce until she is 18.  Her parents are not permitted to renounce for her.

In addition to demanding information about Baby Elle’s bank account, the American government expects Baby Elle to file annual returns and file Foreign Bank Account Reports (FBAR) to FinCEN if her education or other savings exceed $10,000.  Allison Christians, tax law professor at  Montreal’s McGill University told iPolitics journalist Elizabeth Thompson the IRS has refused to clarify if it will tax Canadian government contributions made to Registered Education Savings Plans (RESPs) that Baby Elle’s parents establish for her in Canada.

The IRS did not respond to questions from Thompson about tax implications for Baby Elle.  Trudeau and Obama did not reply to Baby Elle.

Yet Baby Elle, her Canadian bank and one million Canadians are expected to file all their forms and reports on time.

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1 comment on “Is This Canadian Baby An American Tax Cheat?”

  • The situation of Canadians the US considers US persons:

    Double Taxation (Canadian Tax + US Tax via Tax Treaty Gaps)

    Without Representation (would never have agreed to it all – either in Canada or the US)

    Without US Government Services (that US resident US persons may receive)

    Without a Care By The Canadian or US Government For One’s Well Being (only about stick and compliance – and for Canada disregarding Canadian Sovereignty in face of US Extraterritorial tax and compliance law; and pretending Canadian law subservient to US law on Canadian soil!)

    With Unfathomable Compliance (obligation to overlay the 74,000+ page US Tax Code on top of the Canadian Tax Code – with inevitable Tax Treaty Gaps through which Double Taxation flows through – such as on RESP accounts).

    With Excessive Compliance Cost (see above – it all requires highly specialized assistance and can’t be done with TurboTax, and you don’t use that because of the potentially bankrupting penalties (that US residents do not face for their everyday accounts in the US if not done right). Canadian Compliance + US Compliance costs. Plus no Canadian Tax Credits for extra US tax paid on Canadian income, investments, and tax breaks including Canadian tax deferred accounts.

    With Excessive Compliance Penalties (The U.S. tax rules punish accounts and investments that are foreign to the USA. The Compliance Penalties for not reporting accounts right could be bankrupting even if no US taxes are owed. Plus the benefit of many Canadian investments become negated such as investment in Canadian mutual funds! Nothing less than US intervention into the internal affairs of Canada!)

    This is not what Canada stands for in such treatment of its citizens and residents. Plus it is all UnAmerican, unfair, nothing to do with ‘liberty and justice for all,’ and it is wrong!

    Any Canadians who the US considers US persons caught up in this must visit the message boards of The Isaac Brock Society and Facebook Citizenship Based Taxation and American Expatriates Groups; and consider donating to the Canadian FATCA IGA lawsuit and contribute to citizenshiptaxation dot ca .

    US citizenship should be about the greatest liberty in the world. Yet the truth is US persons living in Canada are tremendously disadvantaged by the US AND Canadian governments compared to nationals from all other OECD countries. The US should join Canada and the OECD and adopt Residence Based Taxation. The Canadian Government should end its discrimination by national origin against US persons and abide by the Canadian Charter of Rights – and not treat it as a scrap of paper!

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