The IRS is Begging for More Money so they Sign a Deal with Canada

The U.S. has signed an intergovernmental pact with Canada as part of its efforts to enforce the FATCA or Foreign Account Tax Compliance Act. Canada is a major financial partner for the U.S. and an estimated million U.S. citizens reside in Canada. The new deal addresses some of the privacy concerns raised by the Canadian government and exempts certain classes of investments such as Canadian registered retirement savings plan.

With this agreement Canadian banks will report financial information about U.S. citizens who owe more than $50,000 to the Canada Revenue Service. The CRS will in its turn provide the information to the IRS.

This is another step the IRS has taken to soak up more money so they can send it to Congress so they can send more weapons to Egypt, pay money to corrupt teachers’ unions, prop up a broken school system, give money to fake science companies such as Solyndra, give money to people who refuse to relocate to find a job because they are perfectly happy with unemployment checks rolling in, and so on.

Making New Friends

Canada is one of the many countries with which U.S. authorities are signing treaties in a bid to control global tax dodging. These treaties will ensure that U.S. authorities can track offshore accounts of Americans and ensure that they pay the taxes due.

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If you are an American citizen who resides abroad or has an offshore account you need to consult with a tax attorney who will be able to ensure that you comply with all the new tax laws that have been put in place. The U.S. government and the IRS aim to increase tax compliance and are likely to penalize tax dodgers. However, those who have used offshore tax havens when they were legal can escape the penalties by consulting with a tax lawyer and reporting their assets to the authorities before the IRS received the information from foreign banks.

Further, those who want to minimize their tax outgo should consult with an experienced tax lawyer who can advise them about tax exempt opportunities for investments such as the Canada registered retirement funds. While many of the older methods of avoiding tax are being closed, new avenues are being opened by the authorities to ensure legitimate investment is not hampered.