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?
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.