A report on the November 28 meeting at d'Avray Hall

The meeting about the US filing requirements and penalties for tax returns and offshore" financial holdings at d'Avray Hall on November 28 drew far more people than planned -- where about 40-50 were expected, the eventual attendance packed the Dugald Blue Auditorium and was estimated as more than the room's offical capacity, 240.

There were two speakers, Paul Callnan, a tax consultant from Maine, and David Lutz, Q. C., a lawyer from Lutz Longstaff in Hampton.

Callnan outlined the tax implications, stressing that it is very unlikely that anyone paying taxes  on income in Canada would have to pay anything extra in the US, since there's an exclusion for foreign taxes and some other exclusions as well. He urged everyone to file the six years' worth of back tax forms, and eight years' worth of FBAR reports, assuring us that there couldn't be penalties if there were no taxes owing, and reminding us how valuable US citizenship is.

As far I could tell, he's unaware of the draconian penalties for non-filing of FBAR forms which are stipulated in the documents from the US government, and while in the question period at the end a couple of people tried to explain that, it didn't seem to me that he accepted the argument.

David Lutz outlined his history with the border, and I found two things of particular interest. One was that apparently his citizenship was unilaterally revoked in 1975 when he wrote a letter to protest the US government's attempt to prosecute him for draft evasion. The question of who is a US citizen and under what circumstances came up frequently in the meeting, and I heard not much in the way of clarification, other than Callnan's advice to contact the US immigration people.

Another was his statement that since 2000 it is been against the law for US citizens to travel across borders (especially the US border) under a foreign passport. He has been informed by a border guard that since his Canadian passport shows he was born in the US, he should carry the letter revoking his citizenship with him when he crosses the border. (He also made the point that what the law actually says may not be a lot of help when dealing with some particular border guard, who may be misinformed and who may be having a bad day.)

Some quotes:

His bottom line was that the only solution was for the Canadian and US governments to come to an agreement that solves the problem for the million or so expats living in Canada.

There were lots of questions after the two presentations, but unfortunately most had to do with the peculiarities of individual situations. There was a call or two for some strategy to be discussed, but all that was agreed on was that people should write their MPs and the Minister of Finance (I'd add Foreign Affairs), and consult the American Citizens Abroad Web site.

-- Russ Hunt

Back to Russ Hunt's US Tax Information Web site