As discussed several times in my blog, citizens of the United States must file yearly income tax returns and numerous forms even though they live in Canada. A recent quiet amnesty program (quiet since no one really heard about it until the newspapers started reporting it) stirred up a hornet’s nest, into which Finance Minister Jim Flaherty jumped saying that “U.S. authorities are spreading unnecessary stress and fear among law-abiding Canadians in their aggressive pursuit of offshore tax cheats.”
Many U.S. citizens living in Canada filed U.S. income tax returns for prior years under the recent amnesty program, paying thousands of dollars in penalties, while often paying as much to income tax preparers.
However, there may be good news on the horizon. Barrie McKenna reports in today’s Globe and Mail that it appears that the IRS may have a final well publicized amnesty program where they may waive penalties for U.S. citizens who come clean and don't owe any U.S. taxes. Mr. McKenna reports the new rules will be announced within weeks.
Finally, Mr. McKenna reports that Americans who took part in the earlier amnesty program this year or one in 2009, may be able to reapply and get back penalties they paid.
The devil will be in the details, but stay tuned; U.S. citizens living in Canada may now have one last shot to come clean without any punitive financial cost.
Many U.S. citizens living in Canada filed U.S. income tax returns for prior years under the recent amnesty program, paying thousands of dollars in penalties, while often paying as much to income tax preparers.
However, there may be good news on the horizon. Barrie McKenna reports in today’s Globe and Mail that it appears that the IRS may have a final well publicized amnesty program where they may waive penalties for U.S. citizens who come clean and don't owe any U.S. taxes. Mr. McKenna reports the new rules will be announced within weeks.
Finally, Mr. McKenna reports that Americans who took part in the earlier amnesty program this year or one in 2009, may be able to reapply and get back penalties they paid.
The devil will be in the details, but stay tuned; U.S. citizens living in Canada may now have one last shot to come clean without any punitive financial cost.
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Hi there Mr. Goodfield:
ReplyDeleteI still think that an effective and efficient tax policy is a better way to administer taxation and it's actually more simple to do than not; however, neither the politicians nor citizens have the guts to do such a thing. Everyone - well most - suffer from homo economicus disease and it plays a significant hindrance for real change. In addition, special interest groups are a major hindrance too.
There was a great documentary on PBS (I think - could be 60 Minutes) about taxation in California a few years back and how vehemently the tax prep business (a tens of billions industry in the US) fought a more thorough change of how the state did its own tax returns and their administration. Essentially, once a year you received a pre-filled single page form and if you needed to do up-to-date changes, you did them with your current documentation, and then sent it in through various options. Simple and clean and yet voted down big-time.
With the above article, the sad truth is that those with financial resources can always fight back and in many cases in the United States that I have followed (in US Tax Court and the Appeals Courts) where the well-healed and the IRS have argued in court, the government hasn't done too well and where they've won - well, it's automatically appealed on fairly good grounds.
There's a good saying I always keep in the back of my mind, "The road to hell was always paved with good intentions" and the current tax policy/administration in the United States reminds of that saying.
Fantastic blog that I continuously check up on.
As a recent accounting grad and looking forward to beginning my graduate work in accounting in the new year, your blog continues to refresh my memory on certain issues and keeps me coming back for more.
Hey Anon
ReplyDeleteThx for the kind words. Your views on tax policy and the well heeled make me wonder what direction your future will take you in, check in at a later date and let me know.