The Resource FATCA and FBAR reporting by individuals: enforcement considerations from a Canadian perspective

FATCA and FBAR reporting by individuals: enforcement considerations from a Canadian perspective

Label
FATCA and FBAR reporting by individuals: enforcement considerations from a Canadian perspective
Title
FATCA and FBAR reporting by individuals: enforcement considerations from a Canadian perspective
Creator
Subject
Language
eng
Summary
In recent months, the popular press in Canada has taken an increasingly alarmist view of the offshore asset reporting requirements applicable to US taxpayers under both the US Bank Secrecy Act of 1970 (the FBAR, or Report of Foreign Bank and Financial Accounts, disclosure) and the newly enacted individual reporting requirements under the US Hiring Incentives To Restore Employment Act of 2010 (the FATCA, or Foreign Account Tax Compliance Act, disclosure). These reporting requirements are of particular concern to individuals living in Canada who are subject to these laws solely by virtue of their US citizenship or green-card status. While FBAR reporting has been in place for more than 40 years, it is only recently that the US government has significantly stepped up its enforcement effort, by launching a public awareness campaign and offering partial amnesty in exchange for voluntary disclosure of FBAR non-compliance. With the enactment of the FATCA regime, the concern has intensified to near-panic as residents of Canada to whom the rules apply grapple with reports - some factual and some not - from a myriad of sources regarding potentially severe penalties for non-compliance with either or both sets of reporting requirements. This article examines the FBAR and FATCA laws with a view to determining whether their punitive provisions can be enforced in Canada, either in the courts or by way of the assistance-in-collection provisions of the Canada-US tax treaty. The author first outlines the origin and nature of the FBAR and FATCA reporting requirements. He then reviews the common-law rules against enforcement of foreign revenue and penal laws, and the increasing trend toward the recognition of foreign judgments by Canadian courts. He also addresses constitutional considerations, insofar as they may affect enforceability, and principles of treaty interpretation. He concludes that, at least at present, no penalties arising out of failure to remit FBAR and/or FATCA returns would be enforceable in Canada. He also considers whether the US government might relax its enforcement effort with respect to US taxpayers living in Canada. He suggests that this is unlikely, given that FATCA appears to be designed to facilitate the collection of revenue in the form of fines and penalties, and to replace FBAR with a law that has a greater chance of enforceability in foreign jurisdictions
Citation source
In: Canadian tax journal = Revue fiscale canadienne. - Toronto. - Vol. 60 (2012),
http://library.link/vocab/creatorName
Bonham, A
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • FATCA
  • FBAR
  • tax compliance
  • enforcement
  • exchange of information
  • tax treaty
  • penalties
Label
FATCA and FBAR reporting by individuals: enforcement considerations from a Canadian perspective
Instantiates
Publication
Label
FATCA and FBAR reporting by individuals: enforcement considerations from a Canadian perspective
Publication

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