IRS Relentless in Taxing Americans in Canada


If you are a US citizen living or working in Canada, you are liable to pay taxes not only to the Canadian government but to the US government as well. This is due to the worldwide taxation policy practiced by the US.

The IRS has been having an Offshore Voluntary Declaration Initiative (OVDI) for the last few months that offers a limited amnesty to those who have yet to declare their offshore assets. These assets are not limited to just bank accounts but also include RRSPs, RESPs and TFSAs. As long as any one or a combination of these assets totals more than $10,000 you are obligated to declare them. The deadline to make your voluntary declaration was August 31 but has been extended to September 9 because of Hurricane Irene.

The problem is not so much deliberate lawbreaking but ignorance on the part of many Americans in Canada. Many do not know that Americans in Canada are taxable even if you do not earn a single cent in the US, do not owe any back taxes and have not lived in the US for years. This is further complicated by the fact that children of American citizens are automatically US citizens and themselves are subject to these laws.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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