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David,
Thanks for answering my question. I live in Windsor, Ontario, So it will be
hard for me to have your services. Can you recommend somebody in Windsor for
consultation.
I have one more silly question. As I told you my returns for 2001 and 2002
are under review with Ottawa International Tax Center. Should I wait for
outcomes before I file amendment or should I start right away. How much is a
chance that Ottawa International Tax Center will catch my mistake and if
they do what kind of consequences will I face. Can I still file amendment
during the review or its too late now. How about child tax credit which I
received during that period, will they revise it and I will have to pay back
the difference.
Thanks again
IXXXXXXX
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I do not know of anyone in Windsor that can help you. However, there has to be someone and I will put this on the internet and see if someone comes up.
If not, you do need someone like us and we deal with an amazing number of returns from extreme distances by fax, email, snailmail or courier.
You will have to pay back the child benefits you recieved and I think you should do your calculations before the government does. You have to do this to get the US ones correct as well.
You should be able to avoid penalties in one country at least.
david ingram
=================
The original follows:
.
>>Dear,
>My case is little tricky and I need your input please. Couple of guys used
>my address to file tax returns and everybody including me got tax review
>letters from revenue Canada. All of us replied and now they refered our
>cases to Ottawa internaional tax center. My situation is that I am working
>in states for the last three years and filing return in both US and Canada
>but because I lived in States in first two years, thats why I did not
>declare that income in my Canadian tax returns. I filed Canadian tax
>returns
>for Candian income for those both years (2000 and 2001). My family was
>continuously living in Canada for those two years. Then I moved back to
>Canada to join my family in 2002 and filed Canadian and US returns again.
>This time I showed my US income in Canada. Last year I got re-assessment
>for
>year 2001 and 2002. They asked only clearance for rent/property tax for
>2001
>and details of my employment expenses for 2002. Now I do not know why they
>refered my case to Ottawa international tax office. What do you think about
>my 2000 and 2001 Canadian returns. Did I do right thing by not showing my
>US
>income because I was not living in Canada or I did something wrong. If I
>did
>wrong, what should I do now and how can I avoid the bad consequences. Will
>they stick to the current assessment for employement expenses or they will
>check the returns thoroughly. If they think I hide my US income from them,
>how will I prove that I was right because I was living in States at that
>time and what kind of proof they will require to prove that I was living in
>States. Was I right to file Canadian tax return for income generated from
>Canada but I was living in States. At this moment I am totally confused and
>need your help to get out of this situation. I heard that Ottawa takes
>three
>to six months for investigation and I want some solution before they come
>to
>conclusion.
>Thank for sparing your priceless time for me.
>IXXXXXXXX
>
>_________________________________________________________________
>david ingram replies:
>
>You may well have been correct to not report your US income on your
>Canadian return for 2000 and 2001 but i am willing to be that your returns
>are both very wrong.
>
>What I am hearing is that you filed a Canadian return with Canadian income
>and claimed full exemptions in Canada and filed an American Return
>reporting only your US income and claimed full exemptions.
>
>This is always wrong. If you were correct in leaving the US income off the
>Canadian Return, you should not have claimed full exemptions and the
>Canadian Income had to be included on your US return. The same things
>happens in reverse.
>
>The governing factor is Article IV of the US / Canada Income Tax Treaty
>which I am repeating here for the second time in two days. However, you
>will need to sit down with someone like myself who understands the two
>country setup and you should do it soon.
>
>If you are in BC, I would be pleased to help you, but there are no
>miracles. Goto www.centa.com and read the US/Canada Taxation section about
>a dozen times. It may/will help you understand how it works. I KNOW your
>returns are wrong now.
>.
> CANADA / UNITED STATES INCOME TAX TREATY 1980
>Article IV - Fiscal Domicile - (it is the same number in most treaties)
>
>For the purposes of this Convention, the term "resident of a Contracting
>State" means any person who, under the law of that State, is liable to
>taxation therein by reason of that person's domicile, residence,
>citizenship, place of management, place of incorporation or any other
>criterion of a similar nature, but in the case of an estate or trust, only
>to the extent that income derived by the estate or trust is liable to tax
>in that State, either in its hands or in the hands of its beneficiaries.
>For the purposes of this paragraph, a person who is not a resident of
>Canada under this paragraph and who is a United States citizen or alien
>admitted to the United States for permanent residence (a "green card"
>holder) is a resident of the United States only if the individual has a
>substantial presence, permanent home or habitual abode in the United states
>and that individual's personal and economic relations are closer to the
>United states than any other third State. The term "resident" of a
>Contracting State is understood to include:
>
>(a) the Government of that State or a political subdivision or local
>authority thereof or any agency or instrumentality of any such government,
>subdivision or authority, and
>
>(b) (i) A trust, organization or other arrangement that is operated
>exclusively to administer or provide pension, retirement or employee
>benefits, and
>
> (ii) A not-for-profit organization that was constituted in that State,
>and that is, by reason of its nature as such, generally exempt from income
>taxation in that State.
>
>2. Where by reason of the provisions of paragraph 1 an individual is a
>resident of both Contracting States, then his status shall be determined as
>follows:
>
>(a) he shall be deemed to be a resident of the Contracting State in which
>he has a permanent home available to him. If he has a permanent home
>available to him in both Contracting States, he shall be deemed to be a
>resident of the Contracting State with which his personal and economic
>relations are closer (centre of vital interests);
>
>(b) if the Contracting State in which he has his centre of vital interests
>cannot be determined, or if he has not a permanent home available to him in
>either Contracting State, he shall be deemed to be a resident of the
>Contracting State in which he has an habitual abode;
>
>(c) if he has an habitual abode in both Contracting States or in neither of
>them, he shall be deemed to be a resident of the Contracting State of which
>he is a national;
>
>(d) if he is a national of both Contracting States or of neither of them,
>the competent authorities of the Contracting States shall settle the
>question by mutual agreement.
>
>David Ingram's US/Canada Services
>US / Canada / Mexico tax and working Visa Specialists
>US / Canada Real Estate Specialists
>108-100 Park Royal South
>West Vancouver, BC, CANADA, V7T 1A2
>Calls accepted from 10 AM to 10 PM 7 days a week
>Res (604) 980-3578 Cell (604) 657-8451
>Bus (604) 980-0321
>[email protected]
>www.centa.com www.david-ingram.com
>
>Disclaimer: This question has been answered without detailed information
>or consultation and is to be regarded only as general comment. Nothing in
>this message is or should be construed as advice in any particular
>circumstances. No contract exists between the reader & the author and any
>and all non-contractual duties are expressly denied. All readers should
>obtain formal advice from a competent financial, or real estate planner or
>advisor & appropriately qualified legal practitioner, tax or immigration
>specialist in connection with personal or business affairs such as at
>www.centa.com. If you forward this message, this disclaimer must be
>included."
>This from "ask an income tax and immigration and bankruptcy expert" from
>www.centa.com or www.jurock.com or www.featureweb.com. Canadian David
>Ingram deals daily with tax returns dealing with expatriate:
>multi jurisdictional cross and trans border expatriate problems for the
>United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait,
>Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica,
> Japan, China, New Zealand, France, Germany, Spain, Italy, Russia,
>Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii,
>Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan,
>Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda,
>Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and
>Canadian and Mexican and any of the 43 states with state tax returns, etc.
>income tax wizard wizzard guru advisor specialist consultant taxman
>Alaska, Alabama, Arkansas, Arizona,
> California, Colorado, Connecticut,
>Delaware, District of Columbia, Florida,
>Garland, Georgia, Hawaii, Idaho, Illinois,
> Indiana, Iowa, Kansas, Kentucky,
> Louisiana, Maine, Maryland,
>Massachusetts, Michigan, Minnesota,
>Mississippi, Missouri, Montana, Nebraska,
>Nevada, New Hampshire, New Jersey,
>New Mexico,New York, North Carolina,
>North Dakota, Ohio, Oklahoma, Oregon.
>Pennsylvania, Rhode Island, Rockwall,
>South Carolina, South Dakota, Tennessee,
>Texas, Utah, Vermont, Virginia,
>West Virginia, Wisconsin, Wyoming,
>British Columbia, Alberta, Saskatchewan,
>Manitoba, Ontario, Quebec City,
>New Brunswick, Prince Edward Island,
>Nova Scotia, Newfoundland, Yukon and
>Northwest and Nunavit Territories,
>Mount Vernon, Eumenclaw, Coos Bay
>and Dallas Houston Rockwall Garland
>Texas Taxman and Tax Guru and wizzard
>wizard - Your name has been added to our email list because of an enquiry
>we have received, we may not answer your question but
>another similar question will be as we lump them.
>
>You may find more answers at www.centa.com
>
>David Ingram of the CEN-TA REALTY Group
>US / Canada / Mexico tax and working Visa Specialists
>US / Canada Real Estate Specialists
>108-100 Park Royal South
>West Vancouver, BC, CANADA, V7T 1A2
>(604) 980-0321 - Fax 913-9123 [email protected]
>www.centa.com www.david-ingram.com
>
_________________________________________________________________
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