Canada: We don’t work for the IRS
The U.S. is trying to force other countries to hunt down its tax cheats.
The Globe and Mail
The U.S. is trying to force other countries to hunt down its tax cheats, said Don Whiteley. On Jan. 1, the Foreign Account Tax Compliance Act came into force, which requires all foreign financial institutions—including banks, pension managers, and insurance companies—to spend their own money to find out which of their customers are U.S. citizens and send their account information to the IRS. Any bank that refuses to comply will get hit with a 30 percent tax on every financial transaction that originates in the U.S. This new law is “the most egregious example of extraterritorial reach the U.S. has ever attempted.” The U.S. is on this “tax jihad” because it is the only country in the world besides Eritrea that levies income tax based on citizenship, rather than residence. If you left the U.S. decades ago and are now a citizen of another country, too bad—you owe Uncle Sam. Of the 7 million expat Americans affected, about 1 million live in Canada, and the Canadian government is even now negotiating a mechanism to report on them to the IRS. Of course, Canadian taxpayers will end up “paying for the IRS audit costs.” Do we really want to acquiesce in such a “colossal surrender of Canadian sovereignty”?