Questions to Ask Cross-Border Lawyers and Accountants

Over at Brock, Wondering has put forward several excellent questions to ask cross-border lawyers or accountants before doing anything.

If you are a Canadian citizen considering engaging ANY cross-border lawyer or accountant, ask these questions at the initial conversation:

1) If I do not choose to comply with US extra-jurisdictional tax claims, what is the specific mechanism by which they will collect a tax claim from me using Canadian courts and laws? Can the US or any other foreign state garnishee my Canadian wages? Can they seize my Canadian bank accounts?

2) I understand that under the Canada–US Tax Treaty, Canada will not assist in collecting US taxes from any Canadian citizen, unless the tax claim proceeded their becoming a Canadian. How does this protection apply to my situation? Am I protected by this Treaty?

3) Do you know of any specific case where a Canadian court enforced a US personal tax claim or penalty against a Canadian citizen in Canada? When, where and who?

4) Do you know of any specific case where a Canadian citizen was detained the the US border because they had not filed US tax forms? When, where and who?

5) Are you prevented by any US law, professional certification, official registration or similar covenant with any US government agency from giving me full and frank advice?

I personally will not go anywhere near the cross-border folks. I already know the answers to most of the questions. My lawyer and my accountant agree with me that I have no obligation to do anything with the IRS.

If the cross-border specialist is honest, the answers should be:

1. There is no mechanism by which the IRS can collect tax claims in Canadian courts, The US cannot garnishee your Canadian income. The US cannot seize funds in your Canadian bank account.

2. If you are a Canadian citizen, CRA will not assist in collecting U.S. taxes–even if you are also an American citizen.

3. There is no known case of a Canadian court enforcing a U.S. tax or penalty against a Canadian citizen.

4. There are no reports of Canadian citizens being detained at the U.S. border because they had not filed U.S. tax forms.

5. Full and frank advice is greatly lacking from those in the cross-border compliance industry who are trying to suck Canadians in.

Don’t let IRS or the cross-border condors terrorize you. Know your rights before you do anything.

49 thoughts on “Questions to Ask Cross-Border Lawyers and Accountants

  1. BC_Doc

    +1 Lynne!

    I live 5 hours+ from Vancouver in good weather. This time of year, you take your life in your hands trying to get over mountain passes.

    For my family of six, the CLN charge would come to $14,100 USD or $19,562 Cnd! Add in gas, a hotel room for a night, plus the missed income from a couple of days of work lost.

    And the consulate is a scary place. Jacked up security, bullet proof glass tellers windows, cameras and guards everywhere.

    It’s no great surprise that many of us here in Canada skip the Deluxe Consulate Expatriation Package and go the Do-It-Yourself Self-Relinquishment Route!

    All the best to my fellow Maple Sandboxers and to you Lynne in the New Year.

    BC Doc

    Reply
    1. EmBee

      When my husband relinquished (no fee at that time) we drove through a ground blizzard to get to Calgary (a 3 hour drive, one-way). It turned out to be the coldest 2 days of that winter. For safety sake, we shelled out for 2 nights in a motel to avoid driving in the dark. Stressful? You bet it was. His appointment went quite smoothly but I couldn’t know that while pacing the hallway 10 floors below the consulate’s enclave waiting for his return. Of course after R-Day, there was the anxious wait for the CLN to arrive and then the dreaded minefield called final filing. It’s all outrageous and I completely understand why DIY is your choice. May 2016 bring you, your family and EVERYONE release from this nightmare called FATCA/FBAR/CBT.

  2. Lynne Swanson Post author

    @Al: I don’t think anyone knows the REAL number of renunciations every quarter. Many have renounced but do not show on the list. Many more have relinquished but do not show on the list.

    The list also does not report on those who have not been able to get an appointment to renounce, those who are not able to travel to a U.S. Consulate, those who cannot afford the exorbitant fee or cannot renounce for other reasons.

    The list also does not include others like me who refuse to go to a U.S. Consulate and play their nasty games.

    I’m glad the site is helpful. But, it’s Lynne–not Mrs. Swanson–please.

    If you have benefitted from what you have learned here, I urge you to donate to the ADCS lawsuit where we are challenging the FATCA IGA as a violation of our rights under Canada’s Charter of Rights and Freedoms.

    Reply
    1. Al

      Lynne, What nasty games does the U.S. consulate engage in. Even renouncing seems like a helluva burden. I think talking about this FATCA problem is O.K., but I don’t believe it’s enough to distract the U.S. Government. There needs to be real protests! Street protests, flag waving in front of the U.S. consulate. Something more! ADCS lawsuit has been registered, Thanks.

    2. Lynne Swanson Post author

      I was referring to how the U.S imposes unwanted citizenship on some people and makes it so difficult to renounce by requiring it to be done at a Consulate, makking people wait almost a year for an appointment and another six months to a year for a CLN, exorbitant fees, etc.

      Plus, many of us were told by U.S. Consulates decades ago that we were “permanently and irrecocably” relunquishing U.S. Citizenship by becoming citizens of Canada or other countries only to be told 40, 50 or even 60 years later that we are still U.S. Citizens for tax purposes.

      Bottom line is I don’t trust any U.S. Consukate.  some others feel the same way.  Many more have been willing to travel long distances and pay the outrageous fee to renounce. Some live in or near cities with a Consulate, so that makes it a bit easier for them.

  3. Al

    Mrs. Swanson, Thank You, again. What removed the heavy load was not having to file another U.S. tax return with FBAR’s and worries about making a mistake. I am solely responsible for gathering info for myself, my wife and my daughter. To add another person becomes a lot of work filing every year. This FBAR thing really has gotten under my skin. To answer your question, my mother gets a social security check, and yes we declare this every year along with her Canadian pension, and some interest revenue. That’s it. Do you know the ‘REAL’ number of U.S. citizens that renounce every quarter? By the way, I really enjoy this site. Thanks again.

    Reply
  4. Al

    Mrs. Swanson, You don’t even realize how relieved I am. Thank You very much. You just removed a heavy load. By the way, Do you know what the ‘Real’ numbers are for U.S. citizenship renunciations?

    Reply
    1. Lynne Swanson Post author

      Glad to help.  What was it that “removed a heavy load?”

      In terms of your mother, I continue to recommend that she should not file anything with IRS, although a pension from the U.S. may complicate things.

      Is she claiming that income on her Canadian tax return?  Is that income a private pension plan or Social Security from the time she worked and lived in the U.S.?

       

    2. Lynne Swanson Post author

      I just found this information on U.S. Social Security Payments

      US social security benefits received by residents of Canada are only subject to tax in Canada. The United States will not tax these benefits pursuant to the Canada-US Treaty.

      Generally, Canadian residents receiving US social security benefits are required to include 85% of those benefits in computing their Canadian income. However, the inclusion rate is 50% for Canadian residents (and their spouses or common-law partners eligible to receive survivor benefits) who have been in receipt of benefits since before January 1, 1996.

       

      So that seems to confirm your mother is not required to pay tax on American Social Security to the U.S. Does she have other U.S. income?

      In addition to the fact that CRA will not collect taxes for the IRS for a Canadian citizen, the IRS has also not been able to enforce tax claims in Canadian courts in the few times they tried. So, you and your mother have a lot of protection.

      We do not know if that will change in the future, but that is what the current situation is.

    3. Lynne Swanson Post author

      Here is information about Green Card Expiration from U.S. Immigration.

      This says:

      Each green card has a green card expiration date, usually 10 years from the date that the card was issued.

      This seems to have become effective in 1989, more than 10 years after your mother left the U.S.  Another law was passed in 2004 (I think that is when it was) that Green Card holders are required to officially surrender their Green Card or be subject to filing U.S. taxes.

      My personal (not legal advice!) opinion is that is so long after your mother left the U.S., you should not be concerned about it.

      Plus, I really don’t think the IRS has either the interest or the resources to pursue a Canadian grandmother with Alzheimer’s living in Canada–especially when they are very aware neither CRA nor Canadian courts would help them.

      I hope alll of this may help you to sleep better.

    1. Al

      Hello Mrs. Swanson, I already have the certification paperwork. I have another question for you. If my mother has a Green Card from 1960 should I still file U.S. taxes for her. Again, My Mother was born in Quebec, and at the beginning stages of Alzheimers. She is 77 years old, and is collecting a pension from the U.S. every month. Thanks. She is not a U.S. citizen.

  5. Lynne Swanson Post author

    @Albert: Regarding your mother, my recommendation is that you do nothing, She is a Canadian citizen born in Canada. There is no need for the US or IRS to know anything about her.

    In Information for Individuals on FATCA, Canada Revenue Agency says:

    I hold a U.S. green card. How does this affect my tax residency?

    If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.

    However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.

    Considering that your mother has not lived in the US for almost 40 years and is not a US citizen, I think she should not do anything.

    You may wish to review other Frequently Asked Questions About FATCA for your family and yourself.

    In terms of your son, he could claim U.S. citizenship because of the time your wife spent in the U.S. after the age of 14. Did she register him for U.S. citizenship at any time?

    If so, he would be considered an American citizen. If not, there are differing views and people have tried unsuccessfully to get a definite answer. Some people have been told it is automatic. Others have been told he must apply for it.

    Lawyer John Richardson does not believe the US can force citizenship on people born outside of the U.S. John has traveled widely across Canada and the world to educate people about these issues. Here you can find a synopsis of John’s Solving the Problem of U.S. citizenship that was held in London Ontario in February 2014.

    Please note, I am not a lawyer nor an accountant. Any information or recommendation I give you should not be considered as professional advice. It is what I have learned from being connected to this issue for the past five years.

    Because of the complexity of your family’s issues, you may want to consider a consultation with John. We usually do not recommend lawyers or accountants, but John is probably more knowledgeable and helpful than any other lawyer on these issues. He also understands the stress people are under from this entire nightmare. He has been a strong fighter against citizenship-based taxation and FATCA on both sides of the border for years and is Co-Chair of Alliance for the Defence of Canadian Sovereignty.

    You can learn more about John at his Citizenship Solutions website.

    Reply
  6. Al

    Does anyone know if a Green Card expires. Oh, now I know why they called it Green, because it represented infinite money!

    Reply
  7. Lynne Swanson Post author

    @Albert Your son being considered a U.S. Citizen is dependent on how long your wife lived in the U.S. and especially after the age of 14.

    He cannot claim U.S. citizenship through you because you left at such a young age.

    He is definitely a Canadian citizen because he was born in Canada.

    In terms of your mother, Canadian citizens and seniors are not “off limits.” However, your mother was born in Quebec. Did she ever become an American citizen? Even if she did, there is no reason for her bank to know that unless someone tells them.

    So far, Canadian banks do not seem to be asking about place of birth. If your mother’s bank asks, you can honestly say she was born in Canada and is a Canadian citizen.

    Canada Revenue Agency does not and will not collect taxes for the IRS for anyone who was a Canadian citizen at the time the tax liability occurred. CRA also will not collect penalties for IRS from either citizens or permanent residents of Canada.

    Will you become Power of Attorney for your mother? There could be some FATCA issues if and when a bank asks about your place of birth.

    Reply
    1. AL

      Mrs. Swanson, My Wife lived in the U.S. ’til she was about 27 years old, and my mom never became a U.S. citizen. She probably had a Green Card, but again, she has been domiciled in Canada since 1977. So, are you saying that as far as my mom goes their is a don’t ask don’t tell ‘almost situation’? So I leave it alone?

  8. Al

    Mrs. Swanson, Thank You for your response. It is definitely a terrible situation. My Wife and Daughter were both born in the U.S., and are Permanent Residents in Canada. I am still at odds about renouncing my U.S. citizenship. I have always felt at home crossing the border each way all my life, but I have to say I don’t feel the same about going south anymore. My son was born here in Canada, and Canadian he will stay. I am not even sure of his status. If he was born of my Wife and I(American Citizens) is he considered American also? My Mother is 77 years old, and at the beginning stages of Alzheimers(born inQuebec) should I go thru FATCA with my mom. She has been here, In Canada since 1977, since our return from the U.S..I heard pensioners and/or Canadian Citizens are off limits;Is this the case? Thank You again.

    Reply
  9. Lynne Swanson Post author

    @Albert Yes USA is disgusting in what it is doing to honest people around the world–many who have nothing to do with the U.S. except an unfortunate place of birth.

    Even more disgusting are the government’s that have surrendered their own citizens to the U.S. under threats of sanctions. Those countries should have joined together to say no to FATCA. Canada should have taken a leadership role in saying no. Banks and other financial institutions worldwide should also have joined together to fight FATCA.

    Instead, we were all betrayed. Then the compliance condors flew in to make hordes of money. I know of an elderly widow in her 80s who was terrorized by Canada Trust and Price Waterhouse to become compliant even though she has been a Canadian citizen since 1974. Like you, she spent thousands of dollars to tell the. IRS she didn’t owe them anything.

    You said your wife and daughter also are compliant. What is their connection to US? Was it joint accounts with you and an RESP for your daughter or were they also born in U.S.?

    It is important that you get a Canadian citizenship certificate. Are you planning to renounce American citizenship? Do you have an appointment? The last I heard, some Consulates had a waiting list of 10 months.

    Welcome to Sandbox. You are among friends here.

    Reply
  10. Albert

    The worst part of FATCA, beside the invasiveness is filing the FBAR. Talk about pulling your pants in front of your accountant. Just the fear of making a simple mistake and winding up with a $10000 fine is completely unthinkable. The Lawyers and Accountants of this world are wasting their time against the U.S. machine. The U.S. will make ajustments to FATCA when they feel like, so it seems; Arrogance to the extreme! This is not a good way of making friends. You know that for countries to have agreed with these IGA’s, the U.S. must have had a firm hand around their neck! I 65 year old woman I know wound up on pills for depression and extreme weight loss due to the FATCA stress! Maybe FATCA is a way the U.S. can unload pension costs. If they stress people out enough and cause sickness and death, they won’t have to pay so much. It’s a good way to cut costs! Terrible!

    Reply
  11. Albert

    Thank You WhiteKat, I had read this same site but it didn’t seem so clear. I was 80% sure that I was a dual citizen, but now I have to certify myself. This FATCA thing is nothing but stress. Myself, my Wife and my Daughter are finally compliant(streamlined), but it cost us $8000 for them to tell us we owe nothing. The stress of this cloud over my family is almost unbearable. We have many things to think about, when it comes to U.S. citizenship. It seems a heavy liability for those of us who are law abiding citizens; heavy fiancially and physically. I mean, we are not UBS. If you are fishing for shark, you don’t dredge the whole bottom of the ocean and kill all the fish in the sea!

    Reply
    1. WhiteKat

      Hi Albert, Sorry to hear about your family’s stress. Curious as to why you entered Streamlined FIRST before finding out for sure whether or not you actually are American?

  12. Albert

    I have been a permanent resident of Canada for 40 years. I am an American Citizen. My Mother and Father were born in Canada, and I was born in the U.S.A. in 1963. Am I a Canadian Citizen?

    Reply
    1. Lynne Swanson Post author

      CRA will help IRS to collect taxes on residents of Canada who are not Canadian citizens.  CRA will not help IRS collect penalties on residents of Canada who are not Canadian citizens.

      i do not know how often this has happened.  Does anyone else know?

       

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