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aphid

Obama asked to intervene in IRS assault on Canadian residents

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When I moved here, I was expected to pay taxes in both Canada and the US regardless of where the money was earned. That is the law in both countries. Fuck that - because the law can only be ENFORCED in one or the other - so people get to choose. Not sure how they expect people to file tax returns if they are simply 'residents' with no SSN's,



aphid--and the article quoted--are right that there is an important difference between the two countries.

Canadians living in the USA can legally sever their tax ties with Canada while remaining Canadians. An American living in Canada always has to file US tax returns. While no actual tax may be due if everything is done properly, the penalties for not reporting properly--even if technically no tax is due--can be draconian.

You are right that is tough to enforce if one is not living in the country that wants your money. I guess one question is how far the USA will go to enforce this. If a dual citizen is living in Canada for 20 years with only ordinary middle class income from Canadian sources--will they be arrested at the border for tax evasion if they ever try to visit the USA again? Or will the IRS take a more reasonable approach when it comes to enforcement.
"It's hard to have fun at 4-way unless your whole team gets down to the ground safely to do it again!"--Northern California Skydiving League re USPA Safety Day, March 8, 2014

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Not sure how they expect people to file tax returns if they are simply 'residents' with no SSN's,



You apply for an ITIN with the IRS.
_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

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I think if the US ICE was to arrest anyone at the border, there would have to be arrest warrants already issued. I am pretty sure that ICE has little or no interest in collecting IRS debts, no more than collecting other debts, but seems to be a common urban myth about crossing borders.

My folks worry about stuff like that all the time, diligently worry about having an accident or getting sick, not getting back in the country if they had an outstanding bill etc.

Valid concerns as a human being, but I think the number of arrest warrants issued to foreigners over tax evasion is probably immeasurable.

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When I moved here, I was expected to pay taxes in both Canada and the US regardless of where the money was earned.



Elaborate please TK. In my experience, (not personally, just through associates), when a Canadian lived permanently outside the country, they did not declare or file in Canada. Only if/when they returned for residency and began paying Canadian taxes, they filed a simple one-time document indicating the the time they were out-of-country. That was the extent of it.

A friend of mine holds triple-citizenship: UK, NZ and CDN. He currently works independently in both NZ & Canada. He files his NZ income in NZ with no requirement to disclose his CDN income. He files in Canada his domestic income, also with no mention of his NZ earnings.

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Not sure how they expect people to file tax returns if they are simply 'residents' with no SSN's



In my wife's case, she came to Canada when she was 15 years old. Has never worked a day in the US. Unlike Canada, the US assigns SSN's at birth, so she has one (long since misplaced). The only returns by her to the USA for 40 years is to visit family for weddings, Christmas, etc. Her situation is far from unique up here as you are no doubt aware.

As such, it is surprising the IRS feels they are "owed" anything by her. Hell, I told her to just tell them to go screw themselves. But, that's just me and how I react to bullies.

John

(As an aside: the criticism by somebody here that people such as an emigrating teenager should be aware of IRS reporting obligations is rather self-righteous, in my opinion)

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In my experience, (not personally, just through associates), when a Canadian lived permanently outside the country, they did not declare or file in Canada. Only if/when they returned for residency and began paying Canadian taxes, they filed a simple one-time document indicating the the time they were out-of-country.



As long as the Canadian citizen can severe their residency ties to Canada, they do NOT have to file income tax returns on the income they earn while out of the country. I lived in Colorado for 8 years and the only income tax I paid to Canada during that time period was for the rental income I made while renting out my house in Calgary. I did not have to declare any of the income I made in Colorado to Revenue Canada. Oh and I don't recall having to file any special one time document when I returned to Canada. I just filed a normal tax return once I started earning income for my normal career upon my return.


Try not to worry about the things you have no control over

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(As an aside: the criticism by somebody here that people such as an emigrating teenager should be aware of IRS reporting obligations is rather self-righteous, in my opinion)



I'm not sure if you are referring here to my comments or to someone else's.

I, myself, was responding to the situation described in the article you quoted--which was referring to someone who moved to Canada apparently as an ADULT, not a teenager. It looks like he was a young adult just finishing up his PhD, but he was an adult nevertheless.

Yes I expect an adult to educate themselves on these kinds of responsibilities. Moving internationally is a serious decision and I certainly think it is reasonable to expect an adult to think through the consequences of such a decision. Understand that I have no problem with someone researching the rules, deciding that the rules are unfair and abusive, and making the decision to ignore the rules and living with any consequences. It's not even taking the time to figure out what the rules are--for a tenured professor at a Canadian university not to even know whether they are still a US citizen or not--that I find hard to understand when someone has made the decision to emigrate as an adult.

For someone who is a teenager when they emigrate--and who is moving because of their parents' decision, not their own--one would not expect the same adult level of responsibility. In that case the parents should be researching the consequences of the move, both for themselves and their children. But if the parents fail to do so, I would still expect that as that person reaches adulthood, they would eventually research whether they are still a citizen of their birth country and, if so, whether they still have any responsibilities to that country.

How they choose to respond to those responsibilities--ignore them, follow through, whatever--is their own decision. It just really surprises me that someone wouldn't take the time to find out where they stand.

Isn't there a warning in Canadian passports stating that Canadians born in another country may still be citizens of that country--and should understand the responsibilities of that dual citizenship before traveling abroad?
"It's hard to have fun at 4-way unless your whole team gets down to the ground safely to do it again!"--Northern California Skydiving League re USPA Safety Day, March 8, 2014

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Unlike Canada, the US assigns SSN's at birth, so she has one (long since misplaced).



SSN's weren't typically assigned at birth 40-55 years ago. In the 80's or 90's it began to be required for a child/infant to have an SSN for the parents to claim them on their tax returns--so that is when it began to become common to apply for SSN's for infants. Before then there was no real need for someone really young to have one.

I know that in high school we were encouraged to apply for SIN's even if we weren't working a part time job yet--because it would eventually be required and one might as well get it out of the way. I'm guessing that people typically applied for SSN's at a similar age in the US before the tax deduction rules came in.
"It's hard to have fun at 4-way unless your whole team gets down to the ground safely to do it again!"--Northern California Skydiving League re USPA Safety Day, March 8, 2014

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Unlike Canada, the US assigns SSN's at birth, so she has one (long since misplaced).



SSN's weren't typically assigned at birth 40-55 years ago. In the 80's or 90's it began to be required for a child/infant to have an SSN for the parents to claim them on their tax returns--so that is when it began to become common to apply for SSN's for infants. Before then there was no real need for someone really young to have one.

I know that in high school we were encouraged to apply for SIN's even if we weren't working a part time job yet--because it would eventually be required and one might as well get it out of the way. I'm guessing that people typically applied for SSN's at a similar age in the US before the tax deduction rules came in.



The Tax Reform Act of 1986 required parents to list Social Security numbers for each dependent over the age of 5 for whom the parent wanted to claim a tax deduction. Before this act, parents claiming tax deductions were on the honor system not to lie about the number of children they supported. During the first year, this anti-fraud change resulted in seven million fewer minor dependents being claimed, nearly all of which are believed to have involved either children that never existed, or tax deductions improperly claimed by non-custodial parents. By 1990, the threshold was lowered to 1 year old, and is now required regardless of the child's age.
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The only sure way to survive a canopy collision is not to have one.

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Isn't there a warning in Canadian passports stating that Canadians born in another country may still be citizens of that country--and should understand the responsibilities of that dual citizenship before traveling abroad?



Let me check.

How about that... the back inside cover says,

"Canadian citizens who have more than one nationality through birth, descent, marriage or naturalization are advised that, while in the country of their other nationality, they may be subject to all its laws and obligations, particularly military service."

I guess that could mean some of them may start vacationing at Empuria instead of Deland? Just another (small) financial shot-in-the-foot for the folks at the IRS. *

John

* that was a joke, BTW.

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(As an aside: the criticism by somebody here that people such as an emigrating teenager should be aware of IRS reporting obligations is rather self-righteous, in my opinion)



Teenagers aren't adults, they are children. It's a failure on one's parents. Call it self-righteous if it makes you feel better. I would expect that from anyone in a similar situation and being told some bad news.
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"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

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My apology. I'll try to genuflect better in the future.



Or, instead of getting defensive of what the messenger said, own up to it.
_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

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My apology. I'll try to genuflect better in the future.



Or, instead of getting defensive of what the messenger said, own up to it.



Fair enough.

Apparently my opinion that the IRS should stay the fuck out of Canada, pursuing Canadian citizens, and attempting to shovel their foreign law on us because we Canadians don't know every nuance of a foreign tax law is therefore subject to self-righteous indignation in this forum.

I will take ownership of that. No messenger-shooting intended.

TK Hayes said it best (above in the thread) when the roles were reversed.

For the second time, my sincere apology as I sure as hell didn't mean to upset any Americans.

John

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TK Hayes said it best (above in the thread) when the roles were reversed.



But TK Hayes did NOT react in the same way that the person in the article you quoted did. TK Hayes researched the situation--talked to an accountant--and at a certain point decided it was time to make his own decision--regardless of what the accountants said.

The person in the article you quoted appeared not to even know that he was still a US citizen when the IRS contacted him. Not keeping up to date on every nuance of the US tax code when you don't even live in the US anymore is one thing. But not to even know whether you are still a US citizen or not is something else--and a situation I find it difficult to believe a responsible, intelligent adult would allow themselves to get into.
"It's hard to have fun at 4-way unless your whole team gets down to the ground safely to do it again!"--Northern California Skydiving League re USPA Safety Day, March 8, 2014

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