Part B – The Combined FATCA/CRS Letter
This letter is particularly worrisome for Canadian residents (whether Canadian citizens or not) who were either born in the United States or are (otherwise) U.S. citizens or U.S. permanent residents (AKA Green Card Holders). Could this mean that they would be required to apply for a U.S. Social Security number?
What follows is a sample of a letter …
What’s this “tax residence” stuff about? What does “tax residence” mean?
I previously wrote a lengthy post describing “What to do if you receive a FATCA letter“. Information exchange under the Common Reporting Standard “CRS” has begun in 2018. As a result, I am writing this post which is to explain what the CRS is and how it relates to the FATCA letter. It is important to understand that the “CRS letter is actually a combined “CRS/FATCA” letter which is more likely to be received than the original FATCA letter. I urge that those who have received a letter of this type to read this post PRIOR to seeking professional advice!!!
This is Part 2 – a continuation of the post about “tax residency under the Common Reporting Standard.”
That post ended with:
Breaking tax residency to Canada can be difficult and does NOT automatically happen if one moves from Canada. See this sobering discussion in one of my earlier posts about ceasing to be a tax resident of Canada. (In addition, breaking tax residency in Canada can result in being subjected to Canada’s departure tax. I have long maintained that paying Canada’s departure tax is clear evidence of having ceased to be a tax resident of Canada.)
TaxConnections Member Professor William Byrnes examines whether it is prudent for taxpayers to trust the governments of the 117 countries that scored a fifty or below on Transparency International’s corruption index. The complete information system invoked by the Foreign Account Tax Compliance Act (FATCA) encourages, even prolongs, the bad behavior of black hat governments by providing fuel (financial information) to feed the fire of corruption and suppression of rivals. Professor Byrnes recommends that the United States leverage a “carrot-stick” policy tool to incentivize bad actors to adopt best tax administration practices.
Article download at https://ssrn.com/abstract=2916444
As a further step to implement the OECD Common Reporting Standard (CRS), the first series of bilateral automatic exchange relationships were established among the first batch of jurisdictions committed to exchanging information automatically as of 2017.
As part of continuing efforts to boost transparency by multinational enterprises (MNEs), Brazil, Guernsey, Jersey, the Isle of Man and Latvia signed today the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports, bringing the total number of signatories to 49. This marks a further milestone towards the implementation of the OECD/G20 BEPS Project and a significant increase in cross-border cooperation on tax matters.
Spotlight Interview: Chuck Levun and Michael Cohen On Educating CPAs, Attorneys and Other Tax Planning Professionals, Part 1
Sales And Use Tax 101 – You Don’t Know What You Don’t Know
IRS Releases 2023 Data Book Describing Agency’s Transformation Through Statistics
Avoiding Costly Mistakes: Four Essential Tax Concepts For Attorneys And CPAs (Complimentary 1-Hour Webinar Thursday, May 16th)
Understanding The Alternative Simplified Credit Calculation For R&D
Recent Comments