Canadian Finance Minister Reproves IRS


Canadian Finance Minister Jim Flaherty issued a strong reproof of the IRS in his response to the Wall Street Journal, New York Times and Washington Post, blasting a new IRS tax crackdown that could ensnare tens of thousands of innocent Americans living in Canada. Flaherty’s irate statement called for the IRS to stop badgering “innocent and law-abiding people” who live in Canada and do not owe the US any taxes. According to him, the US requirement for taxes to be paid by those holding dual US and Canadian citizenship is spreading “unnecessary stress and fear.”

The US has a worldwide taxation policy that requires US citizens to declare all their income for taxation regardless of where they live or where their income is drawn from. The Toronto Globe and Mail reports that there are up to one million US citizens living in Canada, and the majority of them do not know of this policy. The conservative Ottawa cabinet Minister Flaherty adds, “Most of these Canadian citizens, many of which have only distant links to the United States, have a very limited knowledge of their reporting obligations to the US.”

Flaherty is also unhappy over impending US legislation that compels Canadian banks to release banking information on all their US clients, which was originally set to be enforced January 2013. But due to strong objections from Canadian banks, the start was postponed to 2014. But Canadian banking authorities say the fight is not over.

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