Practising US tax law out of Canada has both its challenges and opportunities. Alexey Manasuev’s practice areas include treaty planning, US tax and cross-border tax consulting for businesses and individuals, assistance in IRS audits and representation of clients on Appeals, assistance in identifying procedural alternatives for becoming US tax-compliant, estate and gift tax planning, and other areas.
Compliance is no longer an option
According to Forbes.com, no group is more severely impacted than US persons living abroad. US persons, in this sense, not only include US citizens or green card holders, but anyone who is treated as a US resident for US federal income tax purposes, a determination which may not be the easiest, or most self-evident one, to make.
For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they also continue to be required to file tax returns in the United States – one of only three countries in the world that taxes its citizens and residents on a worldwide basis. What’s more, U.S. reporting is based on US persons’ worldwide income, even though they are paying taxes in the country in which they live.
[i] And of note for those in Canada, in February, 2014, Canada and the U.S. signed a Model I Intergovernmental Agreement (“IGA”) under Foreign Account Tax Compliance Act (“FATCA”) to ensure that they work jointly to prevent tax evasion by significantly enhancing their information exchange and collection efforts,[ii] making voluntary compliance a smart move for everyone.