We have all had our OMG Moment. Now that the FATCA rollout has begun, there will be many more “OMG Moments”. This past weekend, I heard about a particularly egregious, frightening and unfair situation (yes, some are worse than others). In response to this, John Richardson suggested that I post the following:
If you are newly in your OMG Moment, we hope this will help.You are among friends here. Thanks John!
Have you just been told that you are required to file U.S. tax returns?
I am hearing more and more reports of people having their OMG (“Oh My God”) Moment where they are hearing for the first time that they may be required to file U.S. tax returns.
You are experiencing one of the most terrifying, confusing and disorienting moments that you will ever have in your life. The range of emotions you are feeling are so difficult to manage that you are having difficulty responding.
Some simple advice.
1. You are NOT in a position to make any quick “commitments” which are NOT REASONED decisions but are REACTIONS to a frightening and confusing situation.
2. Only “U.S. persons” are required to file U.S. tax returns. You may NOT be one. Your first step is to take steps to determine your citizenship status.
A. Being born in the U.S. is NOT conclusive proof of U.S. citizenship. You may have relinquished it along the way.
B.There is NO presumption whatsoever that somebody born outside the U.S. is a U.S. citizen.
3. Since you have not been in the U.S. tax system you do NOT have a tax problem. Therefore you do NOT begin by calling an accountant/tax preparer/tax lawyer. (Once you are in the U.S. tax system you will be rewarded with “tax problems”. At the moment you have a “possible compliance” problem (if it determined that you are a U.S. person).
Accountants, tax preparers, your bank and the vast majority of lawyers are NOT qualified to advise you on the starting question:
“Are you in fact a U.S. person?”
4. The advice “What To Do Before Contacting A Lawyer” is important and applies to to contacting accountants as well.
5. You are NOT alone. Estimates are that there are at least one million Canadian citizens affected by this injustice and unfairness. Remember that you are NOT alone.
6. You have done NOTHING WRONG. The U.S. has never made any effort to educate Canadians of U.S. origin that their laws levy taxes on the basis of citizenship and those born in the U.S. begin life as U.S. citizens.
You did NOT choose where you were born.
Being born in the U.S. means that you started life as a U.S. citizen. You may have relinquished U.S. citizenship.
7. Information sessions are available to you that you can attend anonymously at a very small fee.
February 6, 2014 Update: Yesterday, Finance Canada announced an IGA with the United States that may change some of the information presented here. We will update as more information becomes available and we better understand what it may mean.
Perhaps you’ve just read one of the sensationalist IRS-propaganda articles in the media that says every person born on US soil is a US citizen and must file income tax reports to the US, and are at risk for huge penalties. Perhaps you heard about this situation through another person who has a US connection. Either way, you’re probably confused about what this means and what you need to do about it. Continue reading Have you just learned that the United States considers you a US person? (Updated February 6, 2014) →
For U. S. tax filing purposes the following are consider U. S. persons
A citizen of the U.S., including someone born in the U.S. but living in another country, who has not renounced or otherwise relinquished their U. S. citizenship.
A lawful resident of the U.S., including a U.S. green card holder
A person residing in the U. S.
Someone spending a specified amount of time in the U.S., potentially including “snowbirds” who spend winters in the Florida or other warm climes.
A green card holder who never formally handed in their green card upon leaving the U.S. (even though the green card in no longer valid for U. S. immigration purposes).
The child of a U. S. citizen provided a parent lived in the U. S. period for a specified time period (with some exceptions, see T Dott comment)
All of the above would be affected by FATCA. Financial Institutions will also look for indicia including:
A U. S. place of birth
A current U.S. residence or mailing address ( including a U.S. PO Box)
A current U.S. telephone number
Standing instructions to pay amounts from a foreign (meaning non U.S.) account to an account maintained in the United States
A current power of attorney or signatory authority granted to a person with a U.S. address
A U.S. “in-care-of” or “hold mail” address that is the sole address with respect to the account holder
Others affected by FATCA include any non U.S. person who shares a joint account with a U.S. person or otherwise allows a U.S. person to have signatory authority on the account.
Any business or not for profit organization that allows a U.S. person to have signatory authority on a financial account.
As you know, Maple Sandbox is a gathering place for us to come together to share, learn, explore and grow together.
To stand up to IRS bullies, we need information as quickly as it becomes available. We need to learn from each other around the world.
I hope What’s New will be a building block for sharing those stories from the media or your own experiences.
What’s New will allow you to post articles under one central thread, rather than spreading them out through many different threads. It also will give you the opportunity to share any other information you have with others.
Of course, some news and information will have still have threads of their own.
Please share your news, scoops and ideas.
There is a bit of anxiety concerning what happens at the US border once you have a CLN or once you’ve applied for one. Or for that matter, if you have a Canadian passport that shows a US birthplace, have no US passport and don’t want one, and haven’t yet decided whether a CLN is a good idea for you. If you’re one of any of these concerned people, this post and thread are for you. Continue reading Crossing the US Border on a non-US passport showing a US birthplace →
We often use separate terms for “renunciation” and “relinquishment” since there are some notable differences between renunciation and the other methods of terminating one US citizenship. However, renunciation is actually one of the 7 methods of relinquishment, as set out in Immigration and Nationalities Act, s. 349(a). This post explains some of the similarities and differences. Continue reading Renunciation and Relinquishment: What are the differences? Is there a difference? →
Maple Sandbox is a gathering place for “US persons” to come together to share, learn and explore. Together, we will stand up to IRS bullies as we work our way through the swamp of U.S. citizenship-based taxation. We won’t allow their quicksand to suck responsible, honest tax-paying people living in other countries into IRS pit.. Continue reading Maple Sandbox Rules →
Acronyms and Definitions
AARO: Association of Americans Resident Overseas
ACA: American Citizens Abroad: “The voice of Americans Overseas”.
CBA: Canadian Bankers Association: business association for banks, providing centralized contact between the government and banks. Continue reading Acronyms and Definitions →