Monday, October 15, 2007
Why people from other Countries had a better treatment than Mexicans? Even Cubans, Australians, Britishers, England's, know Canadians. Why? Not even Canada has not been strongly criticized for the porous border, either for Canadians Citizens maintained a dual citizenship as well. Why? Do you believe is discrimation against Mexicans?. Expose your point of view.
Canadians who don't pay U.S. tax face border bust
Homeland Security has access to information from Canada's tax authority.
OTTAWA -- Shopping or other trips to the U.S., which have surged with the dollar's rise to parity, could be cut short for thousands of Canadians by the IRS.
Canadians who have dual U.S. citizenship, plus individuals with U.S. green cards, are for the first time facing tax scrutiny at the border, American tax lawyers are warning.
While it's been known for years that the Canada Revenue Agency and the Internal Revenue Service exchange large amounts of information, it now appears that the IRS is also sharing information with Homeland Security, says Carol Fitzsimmons, with the Buffalo-based law firm Hodgson Russ LLP
A border crossing guard may have information readily available in his or her booth computer concerning a traveller's unpaid U.S. tax liabilities and may bar the traveller's entry into the United States," she writes in the latest edition of the Canadian Tax Foundation's publication Tax Highlights.
In addition, anecdotal evidence suggests that Homeland Security agents are becoming more sophisticated about U.S. tax laws and may ask travellers with a green card or non-resident U.S. citizens whether they have been filing U.S. tax returns, she says.
"Even if a non-U.S. passport is used at the U.S. point of entry, most countries' passports list the place of birth, allowing Homeland Security to easily identify a traveller who is a U.S. citizen by reason of his or her birth in the United States," she says.
In fact, the Canada Revenue Agency confirmed to CanWest News Service that it not only shares its tax information with the IRS but also with the Canada Border Services Agency, suggesting border guards could get tax dodgers both coming and going.
"While the U.S. is free to exchange information with their own Border Services ... the use of information provided to the U.S. is restricted to the application of federal taxes and income taxes at the state/provincial level," Canada Revenue Agency said in a response to queries.
"Perhaps the most common situation ... is that of the U.S. citizen Canadian resident -- often a person who acquired citizenship by being born in the United States and who lived there only briefly -- who has not been filing U.S. income tax returns," Fitzsimmons writes, adding the individual may never have filed a U.S. return and may be unaware of their obligation to do so.
Leslie Kellogg, a partner with Hodgson Russ, added in an interview that while U.S. border guards likely have the authority to detain travellers for failing to fulfill any tax obligations, so far "we haven't seen any indication that they are going the next step and trying to do the IRS's job in terms of tax collection efforts."
"Right now what we've been seeing more is that people would be either denied entry or ... are being asked questions that they were never asked before ... which then starts to worry our clients," Kellogg explained. "We've never seen them before asking any types of tax questions at all."
"For a lot of people I think it's just a wakeup call that they have a filing requirement," she said, noting that when border guards see someone with a Canadian passport but who was born in the U.S., they are starting to ask if they've been filing U.S. tax returns.
Fitzsimmons notes that U.S. citizens living in Canada remain liable for U.S. income tax on their worldwide income and for U.S. gift, estate, and transfer tax on their worldwide assets.
While U.S. citizens living in Canada are required to file annual U.S. tax returns, because of the tax they've paid in Canada, they often have no actual tax liability to the U.S., Kellogg explained.
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