Canadian Taxation

FATCA – US tax entrapment

Published On January 14, 2014 | By Joseph (Ken) | Government, Personal tax

USS

FATCA facts: What Canadians need to know about new U.S. tax law

“In six months, a little known U.S. tax law goes into effect that will affect people around the world, including Canadians.

“Not only might the law — the Foreign Account Tax Compliance Act (FATCA) — reach into Canadians’ pockets, by raising bank costs, but it also brings privacy and financial implications for those with American ties.”

The US has a deficit of over 17 TRILLION dollars and it will never pay that debt, at least not unless it does something drastic.

Cue FATCA!

FATCA is an attempt at a solution but it is deeply flawed and here’s why:

“But some residents didn’t know until recently that they were dual citizens. For example, U.S. citizenship is automatically given to people born in Canada to U.S. parents or born in the U.S. to Canadian parents.”

U.S. FATCA tax law catches unsuspecting Canadians in its crosshairs

“A Calgary woman’s developmentally disabled son is caught in a U.S. tax quagmire that she fears may cost him the money she spent years setting aside for his financial future.


“He’s entrapped,” said Carol Tapanila, the 70-year-old mother. “There’s no way out. He is entrapped into U.S. citizenship.”

“Her 40-year-old son was born in a Calgary hospital, but automatically received U.S. citizenship because both his parents were American. That simple fact may soon create financial woes for the Tapanila family.”

That means that the US will ask for 40 years of US tax returns and potentially 40 years of US taxes + penalties and interest.

For what?  

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About The Author

Joseph (Ken)
(Ken) is a Registered Public Accountant with over 25 years of public practice experience in the accounting profession. Ken specializes in accounting information systems, taxation and financial reporting.

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