UNBELIEVABLE! CRA Ombudsman Told Canadian Citizens of American Tax Laws

This is unbelievable! Canada’s Taxpayers’ Ombudsman gave Information for Canadian Citizens that are subject to American tax law.
It tells of the “obligation to report income and assets to IRS” for those born in the U.S., those who consider ties with U.S. to have been severed and those who immigrated to the U.S. or worked in the U.S.

This may come as a surprise to many people. There are scores of Canadians citizens who do not consider themselves to be American citizens because they have not lived in the US, let alone filed American tax returns, for decades. Yet, the US has laws in place that require them to disclose their revenue and assets to the IRS for tax purposes under the Foreign Account Tax Compliance Act (FACTA) and the Bank Secrecy Act (BSA).

The Ombudsman tells us about FATCA:

The FATCA was enacted in 2010 by the United States Congress to target non-compliance by US taxpayers using foreign accounts. FATCA requires foreign financial institutions to report information to the IRS about financial accounts held by American taxpayers, or by foreign entities in which taxpayers hold a substantial ownership interest.


A FBAR is a form that must be completed and filed by an American citizen, resident, or entity that has a financial interest in, or signature authority over, foreign financial accounts where the aggregate value of those accounts exceeds $10,000 at any time during the calendar year.
The use of a FBAR assists the United States government in identifying individuals who may be using foreign financial institutions to bypass United States tax laws. FBARs help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.

Not once does Canada’s Taxpayer Ombudsman bother to mention that CRA does not and will not collect taxes or penalties!!! So, I guess we shouldn’t consider him an Ombudsman for anyone tainted with a U.S. place of birth.
But, it’s clear the Ombudsman won’t help us in any way:

While the implications of, and procedures for, these US tax laws do not fall within the mandate of the Taxpayers’ Ombudsman, our office is committed to ensuring Canadian taxpayers receive clear information on issues that may have a negative impact and directing Canadian taxpayers to the appropriate area for assistance in meeting their tax obligations.

It also available in French: Des renseignements pour des citoyens canadiens qui sont assujettis aux lois fiscales des États-Unis
Thanks to WhiteKat for sending this to me. Someone provided it to her from government archives. It does not seem to be actively available on their site now, but this tells us what the Canadian government’s Taxpayers’ Ombudsman thinks of us and our rights as Canadian citizens:
“Congress has spoken.”

21 thoughts on “UNBELIEVABLE! CRA Ombudsman Told Canadian Citizens of American Tax Laws

  1. In October 2012, I learned that the Ombudsman was going to be on a panel in NYC with Nina Olson. I asked him to talk to Ms. Olson about a number of items including FATCA and the penalties being imposed for failure to file FBAR’s. Here is his reply:
    “In preparing for the ABA tax Enforcement Conference I have been reading materials produced by the Taxpayer Advocate Service, particularly with respect to the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA) and note that Nina Olsen and her staff are working on the issues you raise. I must admit that these issues were not familiar to me and not within my mandate.
    I will however communicate your concerns to Mrs. Olsen and offer any assistance my Office can provide to taxpayers in need of information”
    Paul Dubé
    J. Paul Dubé

  2. I remember seeing that webpage at CRA last year. I find it telling that the IRS link provided by CRA on that page is to the taxpayer advocate, and not to a general IRS page. I had a little giggle about that.

  3. It seems that the Canadian tax system has been co-opted by the IRS. But how is this within the mandate of the CRA Ombudsman?
    It seems to me that the promulgation of U.S.law is the sole legal responsibility of the U.S. government. It would seem that there is a clear conflict of interest by this government appointee.
    Is there anymore clear evidence that the I.G.A. and Citizenship based taxation is a human rights violation?

  4. Amazing – I would have expected more from the Canadian government to protect its citizens. Also amazing, how countries like Canada, the UK, NZ all have rolled over, and changed their laws, to accommodate FATCA. Laws that are fundamental to the citizens of those nations respecting privacy, human rights and non discrimination based on national origin.

  5. @SteveKlaus: What I find eerie are the similarities between New Zealand and Canada. 
    A New Zealand Cabinet Minister referred to “US persons” there as “U.S. taxpayers habitually resident in New Zealand.”
    Canada’s Minister of State for Finance called us “American citizens abiding here in Canada.”
    Both countries negotiated in secret.
    Both countries consulted financial institutions, but not their own citizens early in the process.
    Both countries signed IGAs, asked for submissions and then totally ignored those submissions.
    Both countries are overriding their own long-standing human rights and privacy laws for a foreign bully.
    Both countries buried the FATCA bill in an omnibus bill.
    New Zealand’s Revenue Minister has admitted he has not actually read the IGA (What?!?)  Canada’s new Finance Minister and Revenue Minister have not said that, but their performance and that of that of Con MPs lead me to believe they haven’t read Canada’s IGA either.
    Hmm.  Sound like collusion for how to throw your citizens to the FATCA Fiend to anyone else?

  6. My husband falls into this catagory of “accidental American citizen”, having a Canadian mother and American father and born in the States. He came to Canada at age 18 and received his Canadian Citizenship in 1976 at age 26. He is now 65 and just shocked to find out that he has been an American citizen all these years. Needless to say, we are both distraught about this. We have worked our entire lives to to finance our modest retirement. The cost to pay an accountant to become compliant and continue to submit tax returns every year going forward is worrisome. What do we do??? Do we become compliant or do we just keep our head down and wait to see if the IRS comes calling. Will we be able to cross the border ( my husband has Canadian passport with American birthplace on it)? Would love to hear from others as to what you are doing or what you are thinking. Any suggestions or comments would be so welcome as we are feeling isolated .

  7. Worried. Your husband relinquished his US citizenship when he became Canadian in 1976.
    Filing US taxes at this stage would be a mistake as it would counter that argument. The IRS won’t come calling- they have enough problems.
    So far there have not been reports of Canadians being denied entry to the states . A few have been hassled. There is a detailed thread on the subject on this website. Take your time. The more you learn, the less you will be worried in Windsor.

  8. @DukeOfDevon,
    Wouldn’t the fact that WorriedinWindsor’s husband’s mother was Canadian at the time of his birth make him a Canadian since birth?

  9. Read her post. He became CAnadian in 1977. That’s all he needs to argue that he relinquished his US cit. at that time.

  10. @DukeOfDevon, I knew you were going to tell me to read her post again…lol.
    I know what she WROTE, but what did she really mean? Does she even KNOW? That WorriedinWindsor’s husband “received his Canadian citizenship in 1976” could mean he applied for and received his Canadian citizenship CERTIFICATE, a process which he might have misconstrued as actually becoming a Canadian. He may simply have obtained PROOF that he already was a Canadian since birth (having one Canadian parent at birth makes one a US citizen does it not?)
    Duals from birth have no birth certificate to prove their Canadian citizenship, and typically would go through this process of obtaining a Canadian citizenship certificate (something other Canadian born Canadians don’t need to acquire because they have a Canadian birth certificate for ID purposes) and one could confuse applying for a citizenship certificate with actually acquiring Canadian citizenship.

  11. @DukeOfDevon,
    It IS complicated, and as such, it is important to understand one’s particular situation fully. Something as basic as ‘When did I become a Canadian?’ is a key question that needs to be clearly answered for a person living in Canada with a US birthplace on his/her Canadian passport who is trying to make sense out of FATCA and US citizenship based taxation.
    I mean, you can do whatever you want with that information, including trying to keep it secret, but at least you need to be aware of it.

  12. How am I supposed to know other than what Worried told us? I don’t think you are being helpful. Enough said.

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