Have you heard about the U.S. tax collector’s hit list?
[box]The U.S. Internal Revenue Service is on a campaign to chase down Americans squirreling funds offshore to evade paying taxes. But the crackdown aimed at large-scale tax evaders is also hitting people of more modest means.
The number of Americans affected in Canada is unknown. It includes U.S. citizens allowed to work in Canada and dual citizens in Canada. Some may not even realize that they are American citizens. When an American citizen becomes a Canadian citizen, the U.S. still considers that person an American. If that individual wishes to relinquish U.S. citizenship, they must make a formal application and be up to date on their financial filings.
[highlight]Statistics Canada’s 2006 census information showed nationally that 226,755 people reported they held either single or dual U.S. citizenship.[/highlight]
U.S. legislation allows for fines of up to $10,000 per offence per year for non-wilful failure to disclose financial holdings. Penalties can reach $100,000 and up to 50 per cent of the value of a holding if the U.S. believes someone was intentionally trying to avoid filing online taxes.
Would you ever renounce your citizenship in a country to avoid paying taxes?
On our honeymoon, we ran into a British fellow in Monaco and he was bragging about avoiding paying taxes while working in South Africa. I was disgusted and I thought I would never brag about not paying my fair share of taxes.