The Internal Revenue Service (IRS) is increasing its focus on reporting of foreign financial accounts by U.S. persons. Despite recent protests by Finance Minister Jim Flaherty on the matter, the changes seem like they are going to go ahead. There are potentially significant implications that representatives should advise their US clients about. Put simply, just because your US clients are becoming Canadian permanent residents or citizens does not mean that they are absolved from reporting their taxes to the United States. The Report of Foreign Bank and Financial Accounts (FBAR) is an IRS form. Any United States person who has a financial interest in any financial account in a foreign country where the aggregate value of the accounts exceeds $10,000 is required to file the form. Accounts that require reporting include Canadian bank accounts, investments, mutual funds, life insurance, RRSPs, RESPs, TFSA’s, etc. With such a low threshold, the FBAR reporting requirements likely apply to many of your American clients. The IRS website states that failure to file an FBAR when required to do so may result in civil penalties, criminal penalties or both. If your clients have not been filing an FBAR when they were required to do so, … Read More
Certainty of Intention and Immigration Trusts
The Federal Court and Federal Court of Appeal decisions in Antle v. Canada suggest that such professionals should make sure that their clients understand the nature of what a trust is before establishing an immigration trust.
Residence Under the Canada-Russia Tax Treaty
We often have clients approach us asking how they can immigrate to Canada without become tax residents. There are a variety of ways to do this, and the recent Tax Court of Canada decision in Denisov v. The Queen highlights one issue that those interested in not being tax-resident need to be prepared to address.
Am I a Tax Resident in Canada or China?
A person who is a Canadian tax resident must pay income tax on his/her worldwide income. As previously noted in this blog, people who try to evade paying taxes in Canada on income earned abroad face heavy penalties.