Updated – 2015 "Solving US Citizenship Problems" – "Have You Received a FATCA Letter?"

NB Please note new date, time & location:
(location is the Landon (not a typo) Branch of the London Public Library)
LONDON Thursday, April 23, 2015
6:00 p.m. – 8:00 p.m. – $20.00
London ON N6C 3P6 MAP
Parking is available behind the building; approach from laneway off of Bruce Street (one-way east)
TORONTO Sunday, May 31, 2015
12 noon – 2 p.m. – $20.00
Carr Hall, 100 St, Joseph St.
Toronto ON M5S 2C4 MAP
Have you received a FATCA letter or been warned of the consequences of being a U.S. person?
Why am I getting letters from my bank all of a sudden?
The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.

What individuals are U.S. taxpayers? Who is a U.S. citizen?
There are individuals that the U.S. government would define as “U.S. citizens” who:

  • do NOT agree that they are U.S. citizens because they have performed a “relinquishing act” under applicable U.S. laws;
  • do NOT even know that they may be U.S. citizens because they have never lived in the United States
  • are citizens and residents of countries that do NOT allow multiple citizenships

To put it another way: one’s status as a U.S. citizen is NOT always clear.
I have never heard of these requirements! What determines the income that must be reported to the IRS? What “Information Returns” are required to be reported to the IRS?

  • FBAR (Now called FinCen 114)
  • FATCA 8938 – Report of Specified Foreign Assets
  • 5471 – Information return for Foreign Corporation
  • 3520 – Information return for a “Foreign Trust”
  • 3520A – related to the 3520
  • 8621 – for mutual funds
  • 8965 – for exemption regarding ACA (“Obamacare”)

I am only a snowbird! Why does this affect me?

  • Substantial Presence Test
  • Form 8840 Closer Connection Exception Statement for Aliens
  • Caution: Streamlined Programs & 35 day rule – Catch 22

What are the ways I can become compliant?

  • Offshore Voluntary Disclosure Program – AKA “OVDP – Not appropriate for the vast majority of people
  • Streamlined Compliance – A pre-packaged way to “clean up” past compliance problems
  • Obeying the law – filing amended tax returns outside the “IRS Created” programs
  • Delinquent FBAR Submission Procedures

What costs are involved in renouncing U.S. citizenship?

  • The costs of a total of 6 years (5 years prior the year of renuncation plus the year of renunciation) of tax compliance and information returns
  • The cost of any back taxes and penalties
  • A $2350 administrative fee
  • Possibility of having to pay an “Exit Tax” (which can be the biggest problem)

WHO: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
Hope to see you, your families and friends! Spread the word!
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.

2 thoughts on “Updated – 2015 "Solving US Citizenship Problems" – "Have You Received a FATCA Letter?"

  1. Accordind to a letter from Joe Oliver ,this law requiringAmericans living in other countries to pay taxes was passed in 1913. I will simply use the the defence of my freedom and human rights are being violated. The USA does not have the right to tell me what country I chose to be a citizen of. They do not have the right to stamp PRODUCT OF THE USA on me and claim me as one of theirs. I did have a choice as to what country I was born in just as all of you did not. I ask all of you to stand up against the USA and thsir bully laws. I also heard the IRS is under staffed and that 47% of calls made to IRS regarding 2014 tax filing from inside the USA will not be answered due to understaffing. Thiis was on the news from the states.

  2. @cjk Joe Oliver is wrong. The United States has had citizenship based taxation since the Civil War.
    As you said, that should have nothing to do with us as Canadian citizens and residents. Joe Oliver and gang should not allow the United States to invade our lives as responsible, productive, honest Canadians with bank accounts where we live, work and make our homes.
    Help fight back by donating to ADCS.

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