canada_usa_america

Advisor.ca is live-tweeting the 16th annual STEP Conference today via @advisorca.

Here are the key takeaways from the morning session on U.S. tax exposure:

#STEP2014 the US is still very positive on formation and use of trusts. But IRS does want to know about them, especially if they’re offshore.

#STEP2014 how to avoid being a citizen when born in the US? Be the child of a high level diplomat!

Read: Tax season isn’t over for Americans in Canada

#STEP2014 people with green cards are, tho, subject to US tax. Even if your card has expired, you’re subject unless you surrender it.

#STEP2014 the green card in your desk drawer can make you American. So give it back!

#STEP2014 there are both three year and one year time tests for time spent in the US to establish residency.

#STEP2014 informational filings, including FBAR, has to be done each June. This is a Treasury Dept. Requirement, not IRS.

#STEP2014 failure to file over a number of years can lead to you owing 150 percent of the principal in an account.

#STEP2014 and Treasury and the IRS are loosening how they interpret “willful” failure to file these forms.

#STEP2014 some employers in Canada are limiting signing authority for US citizens at their companies because they fear disclosures.

Read: Client caught in cross-border trap

#STEP2014 and wealthy Canadian families are urging their kids not to marry American citizens.

#STEP2014 we’re going to see more FBAR penalties for US citizens. Swiss banks also will be making more disclosures.

#STEP2014 a lot of US citizens abroad are coming in to meet with the IRS for voluntary disclosure. It’s a way to avoid multi-year penalties.

#STEP2014 there are opt out provisions, like saying your accountant didn’t tell you. But this can subject you to penalties.

#STEP2014 tax applying to green card holders is essentially an exit tax. It presumes you sold all your assets the day before you left.

#STEP2014 we’re waiting for regulations regarding inheritance from expatriated US citizens to their heirs.

#STEP2014 questions of when there is a US account owner is creating some problems between agencies in the US and respective jurisdictions.

#STEP2014 10 items on the new taxpayer bill of rights are designed to help US taxpayers deal with the IRS.

Read: IRS touts taxpayer Bill of Rights

Originally published on Advisor.ca

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