Several Canadian citizens have brought suit in a Canadian federal court against the Canadian Attorney General challenging the constitutionality of the intergovernmental agreement (“IGA”) between the U.S. and Canadian government enacted pursuant to the Foreign Account Tax Compliance Act (“FATCA”).
FATCA is the law that has given the U.S. the ability to obtain information about foreign accounts held by U.S. taxpayers. The lawsuit was filed in an effort to stop Canada from turning over private bank account information of more than one million U.S. persons living in Canada. The U.S. and Canada Agreement requires turning over this personal information.
FATCA Not Popular
It is no surprise that FATCA is not popular in foreign countries. People believe that FATCA infringes on the rights of sovereign nations. The Canadian lawsuit highlights some of most controversial effects of FATCA. FATCA means that certain “accidental Americans” are not compliant with their U.S. tax obligations. “Accidental Americans” are people who were born in the U.S. and moved to another country, many to Canada, when they were very young. In all respects they are Canadian. To uncle Sam, they are U.S. taxpayers subject to tax on worldwide income. If they do not report their income to the Internal Revenue Service (“IRS”), they can be subject to criminal prosecution.
The U.S. claims that FATCA was necessary to stem the tide of offshore tax evasion. Whatever the reason, it is not popular among U.S. nationals living abroad. In fact, an increasing number of Americans are taking the most extreme measure and giving up their U.S. citizenship! More than 1,500 Americans have chosen to expatriate in the first two quarters of 2014 alone, which is second most amount of expatriations since 1998.
As a tax lawyer, I frequently advise taxpayers worldwide about their international tax compliance obligations. Whether it’s reporting foreign investments through the IRS’s Offshore Voluntary Disclosure Program (“OVDP”) or through Streamlined Filing Compliance Procedures, or assisting foreign nationals present in the U.S. with tax return filings and refunds, now is a very important time to understand your obligations due to the effects of new laws like FATCA.
Contact an Experienced Columbus Tax Lawyer
FATCA Compliance and Voluntary Disclosure Representation
The Columbus tax lawyer at Porter Law Office, LLC has in depth experience resolving difficult voluntary disclosures for reporting income from foreign investments and filing FBARs. By hiring Porter Law Office, LLC, you will be guided through your obligations under FATCA to the best possible resolution at the least overall cost. Columbus tax lawyer Matthew R. Porter is an experienced international tax attorney who understands what it takes to overcome the legal hurdles associated with FATCA. Schedule a free consultation today to discuss your options.