Tax Tips

The Yanks Are Coming

Things are getting tough in the land of the free and home of the brave. Their finances are as bad as the Greeks in that the average citizen owes about $40,000 as part of the government debt. To make things worse there is no appetite to cut the defence  budget which accounts for more than half the annual deficit. To make ends meet there is the necessity of collecting more tax revenue without raising taxes. That would seem impossible.

In practice the US Internal Revenue Service has cast their net further and is now pursuing US citizens and green card holders living abroad. Americans are taxed not on their residency but on their citizenship so irrespective of where they might be they have to pony up to Uncle Sam. For many there is no, or minimal tax, due to the USA because of tax treaties between the country of residence and the USA. As a result many Americans living in Canada have just ignored the IRS, however the US tax code requires an annual filing irrespective of where the tax payer lives. When the infamous embargo runner Marc Rich pursued a pardon from Bill Clinton he was rewarded with  forgiveness for all his sins except taxes owing and still prohibited from entering the US. Taxes are never forgotten and if you held a green card or are an American citizen bring your filings up to date or you could be pulled over at the border and disappear down one of those black holes that the Americans have for the unsavoury.

Your financial  information is probably already in the hands of the IRS and the border services people not to mention the immigration department and a number of alphabet soup groups of the US Government. If you ever had a “green card”, owned property, are an American citizen or were an American citizen you might have a liability to the IRS.

One way out of the morass is to renounce your US Citizenship. First off never admit that your have any tax considerations for doing so. Secondly be prepared to bring your US tax filing up to date. The tax code in the US will look at any capital assets you have including personal items like jewellery and any deferred income you may be entitled to. It isn’t easy and at last report they were charging $2,400 to do the deal. US citizenship is no longer an asset it is a liability. Cut your losses. 416-955-9511

© Copyright 1998 - 2016 Alex Doulis. All rights reserved.



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