“Imagine my surprise when I found out the United States considers me a criminal,” says a Canadian police officer who has been enforcing Canadian laws and protecting Canadians for more than three decades.
The American government considers that Canadian cop a criminal because he hasn’t filed tax returns with Internal Revenue Service (IRS) on his entirely Canadian earned and taxed income. He also hasn’t submitted Foreign Bank Account Reports (FBARs) to U.S. Financial Crimes Enforcement Network (FinCEN) on joint bank accounts held at his local Canadian bank with his Canadian wife.
He had no idea until recently that he was required to do so simply because he was born over a half century ago in an American medical facility that was the nearest place for his Canadian mother to give birth. He has lived his entire life as a Canadian citizen.
“My only crime is my birthplace, something I had no say in,” insists this Canadian cop.
Uncle Sam Wants Other Canadians
An estimated one million Canadians are caught up in the IRS worldwide hunt to find “US persons” and bring them into compliance with American tax laws because of some distant connection to the United States.
In addition to Canadian cop, these Canadians include:
A woman born in United States when her mother went into premature labor on an overnight visit to Buffalo.
A French Canadian whose Quebec ancestry dates back to 1682.
An elderly widowed Canadian Grandma who was told by U.S. Consulate 42 years ago she was “permanently and irrevocably” relinquishing American citizenship by becoming a Canadian citizen.
A native Canadian husband and father horrified U.S. demands to seize his family’s legal private bank records under American Foreign Account Tax Compliance Act (FATCA) simply because his Canadian wife was born in U.S.
These Canadians are alarmed and outraged the U.S. Congress and the IRS maintain they are entitled to claim them as American taxpayers and demand information on their private financial lives.
The IRS recently announced a new “streamlined program” to help people living outside the United States become compliant with American tax laws. Under the modified rules, tax penalties will be waived for eligible U.S. taxpayers who reside outside the United States. To become eligible, taxpayers must certify that they did not deliberately fail to report offshore accounts.
According to an article in Canada’s Globe and Mail newspaper, IRS officials acknowledged that Americans living in Canada, where taxes are generally higher, are a key target of the new rules.
“These are exactly the type of people we would expect to see come in as a result of these streamlined procedures,” Michael Danilack, IRS deputy commissioner of international operations, told reporters on a conference call. “We expect that those folks will take a look at this expanded program and say, ‘This is for me. Now I can sleep at night, get my returns in and know I’ve met my obligations going forward.
What will help them “sleep at night” is for Congress and IRS to end the monster nightmare they are foisting on these honest, law-abiding Canadian citizens, residents and taxpayers.
IRS Commissioner John Koskinen says “This opens a new pathway for people with offshore assets to come into tax compliance. The new versions of our offshore programs reflect a carefully balanced approach to ensure everyone pays their fair share of taxes owed.”
These Canadians think it is arrogant, imperialistic and indefensible for Congress and IRS to demand they have any “obligations” as “U.S. taxpayers.”
The accounts of these Canadians are not “offshore.” They are in communities where they live, work, and earn an income. These Canadians are in “tax compliance” and pay their “fair share”–to their own country.
There is nothing “fair” or “balanced” about intimidating requests from U.S. Congress and IRS for a “share” of their Canadian income and savings, threats of criminal or civil penalties from IRS and FinCEN for not reporting their legal Canadian bank accounts to a foreign government and draconian demands of US Treasury to seize their bank records.
What Do These Canadians Want?
Canadian Cop and these other Canadians want just one “fair” and “balanced” thing from the United States:
They want the United States government to leave them alone.
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7 comments on “Why Does U.S. Congress And IRS Want A Canadian Cop?”
An excellent summation of the issue and the only answer that is acceptable. The U.S. has no moral or legal right to the earnings and retirement income of those who are not resident in the U.S. Our accounts are indeed not foreign and for the Americans to maintain otherwise is a lie.
Entering the streamlined program is an admission of guilt where none exist. Compliance going forward is self condemnation to a life of poverty and living as a toy at the end of the U.S. tax string.
U.S. residents can pay for their own government. Why should they be allowed to reap where they haven’t sowed?
Lynne – The Canadian government has given consent to the U.S. to request a fair share of U.S. taxes from Canadians – by not stating otherwise – in the Canada-U.S. tax treaty that it signed. Thus the Canadian government has allowed this creation of and discrimination against a 2nd class of Canadian who happens to have US citizenship.
FATCA amplifies the weakness of the Canadian-US tax treaty through its Canadian government required reporting to the IRS of financial information on Canadians who have U.S. citizenship.
What is needed: a revised Canadian-US tax treaty that provides clarity and actually prevents double taxation on retirement accounts, the family home, the small business, life insurance payouts, etc including generous blanket exemptions for Canadians who happen to be U.S. citizens.
And in addition, there is nothing “FAIR” about being taxed twice.
Get rid of citizenship-based taxation in America. ( It is even harming the american economy.)
I don’t know how these IRS and US Treasury officials can “sleep at night” knowing that the system is geared against non-resident Americans, and no matter how much tweaking and goalpost moving they do, America’s diaspora tax WILL NEVER WORK! Why else doesn’t any other developed country do it?
A Canadian Government employee’s salary, but not other income or pension, is NOT reportable for US income tax per the tax treaty. More than likely he didn’t have enough other income to require a tax return, and it’s unclear if a Sched B then needs to be filed. How many cops have a bank account with more than $10k in it?
Eventually this illegal legislation will fall to constitutional challenges, either here or in the US. The US cannot enforce tax collection in Canada, nor will CRA assist them if the person is a dual citizen for the period in question. The IRS does not have the legitimacy to enter into IGAs, and this will also be challenged stateside. The IRS has bitten off way more than it can chew, so i’d be patient, stay quiet, do NOT get sucked into the oh-so-transparent US “forgiveness” plan, and wait for the legal challenges in both countries to take hold.
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