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30. May 2011 by Dan Walkow, CFA, CMT.
The long arm of U.S. law is poised to reach deep into the lives of millions of Canadians.
It’s called the Foreign Account Tax Compliance Act, or FATCA. Quietly signed into law by President Barack Obama last year, the legislation boasts the lofty goal of dismantling foreign tax havens suspected of looting $100-billion a year from the U.S. Treasury. Read on to see how it may affect you here.
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17. April 2011 by Dan Walkow, CFA, CMT.
Now, overseas tax cheats have one more big problem to worry about: An IRS whistleblower law that for the first time allows anonymous informants to collect a chunk of the cash recovered when they turn in people committing tax fraud.
As any tax attorney will tell you ignorance of the law is no excuse. Canadians want to be very careful and understand how American tax issues affect them particularly if they have US issues such as owning any kind of US asset or account.
A very simple example is where a expat Canadian lives or is a deemed resident of the United States and fails to report an old RRSP back in Canada.
As the attached article points out you can run but you cannot hide!
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15. January 2011 by Dan Walkow, CFA, CMT.
Cross-Border persons such as Americans resident in Canada and Canadians resident in the USA, along with domestics in Canada or the USA with financial accounts in the other country, have special tax considerations.
These persons have two tax masters, the IRS in the USA and the CRA in Canada and are governed the the Canada US Tax Treaty.
It gets complicated!
Read a short overview here written by Tim Chestnick at the Globe & Mail.
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6. April 2010 by Dan Walkow, CFA, CMT.
Read more: http://www.time.com/time/business/article/0,8599,1977893-1,00.html#ixzz0kK2jJaxy
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3. April 2010 by Dan Walkow, CFA, CMT.
The Problem:
Canada Revenue Agency tells me I was not eligible to split pension income with my wife in 2007 and 2008. Now I have a huge tax bill with a penalty. The income came from a registered retirement income fund and a locked-in retirement income fund. That money came from my defined-contribution pension plan when I left Sobeys in 2006. I am now 58 years old.
The Pain:
Only lifetime income paid directly from a pension plan qualifies for the federal pension credit and for splitting with a spouse to save tax, unless it is transferred to you on the death of an earlier spouse. Your RRIF and LRIF withdrawals will not qualify as pension income until you reach 65. It’s another example of discriminatory treatment toward folks without a pension plan.
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31. March 2010 by Dan Walkow, CFA, CMT.
Investors who are under the illusion that all is well in Canada in regards to provincial finances may want to think twice.
Ontario leads the defict parade in Canada and for an interesting comparision between Ontario, Canada and California check it out here.
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31. March 2010 by Dan Walkow, CFA, CMT.
Hiking taxes and raising fees are not exclusive to most States in the USA; Canadian provinces are faced with growing deficits and tax hikes are front and center both on the consumption and income sides of the ledger.
The squeeze also continues on the the service and government spending side where services and budgets are being slashed to narrow the budget margin.
Expect more, alot more. Deficit reduction is going to be a multi-year process and we are only beginning to see federal governments both in the USA and Canada implement larger tax grabs. Mindful of the early stages of the economic recovery most governments are introducing tax hikes in bite size chucks but as things improve its going to accelerate.
One wants to revisit your tax planning strategy and prepare accordingly.
See the recent article at the Financial Post on provincial tax hikes here.
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28. March 2010 by Dan Walkow, CFA, CMT.
WITH all the hoopla over the health care bill, hardly anybody noticed that a job creation bill that President Obama signed on March 18 makes it much harder for United States citizens to avoid taxes by hiding money in overseas bank accounts.
Congress is attacking some of these schemes, courtesy of interesting provisions aimed at curbing tax avoidance that legislators wrote into the new jobs bill, known as the Hiring Incentives to Restore Employment Act.
The most substantive section of the bill states that foreign financial institutions will face a 30 percent tax on their United States investments if they refuse to disclose information about accounts they have opened for American citizens in offshore jurisdictions. Another aspect of the bill eliminates a clever derivatives strategy used by investors to make their tax bills on dividends disappear.
The law was written broadly and covers banks, hedge funds, securities houses, derivatives dealers, commodity traders and private equity firms. Indeed, any financial firm that holds or trades assets for its own account or for clients must comply with the new reporting requirements.
The United States continues to put legal means in place to compel offshore investors and advisors to declare and pay tax on offshore investment accounts and investments. Canada, as always, is a little behind the USA in this regard but you can be sure that that gap will close soon as well. DGW
Read the full article at the New York Times here.
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23. March 2010 by Dan Walkow, CFA, CMT.
A California client of Swiss bank UBS was sentenced to six months home detention for tax evasion in the latest case stemming from a U.S. government probe of citizens hiding billions of dollars in offshore assets.
John McCarthy, a businessman from the wealthy seaside enclave of Malibu, also was placed on three years supervised probation on Monday and fined $25,000 for his guilty plea to a single felony count of failing to report a foreign bank account from 2003 through 2008.
In addition to the fine, McCarthy was ordered to make restitution of more than $485,000 he owed to the government, which he already has paid, and to perform 300 hours of community service, which he can do while under home detention.
He had faced a maximum penalty of five years in federal prison and $250,000 in fines.
But Judge Valerie Baker Fairbank said she weighed in McCarthy’s favor his cooperation with authorities, the fact that he had no prior criminal record and had otherwise “led a responsible, law-abiding life.”
Here is the kind of treatment one can expect if caught stashing money offshore and failing to report a foreign account!
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2. January 2010 by Dan Walkow, CFA, CMT.
Spouses of those wealthy who die this year might find themselves with nothing if the family will isn’t revised—a major wrinkle that could follow Friday’s repeal of the federal estate tax.
An update on the ongoing estate tax issue in the USA.
Read more here.
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