This was actually dumped by my system but the topic was
too good and I had to comment.
You sound like a factual resident -
Appeal on the grounds of Article IV of the tax treaty. Your divorce in 1999 does
nothing to deal with the assessments from the CRA.
The separation
agreement in 1994 does. You were also obviously separated in fact before
the signing. Have you given the CRA copies of your US Tax returns?
At the least, you are entitled to a foreign tax credit for taxes paid to the
USA. Have you given them copies of your US driver's licence, health
insurance, rent bills, etc.?
Make sure you take a list of all of your US
girlfriends for the time period. Having them sign an affidavit to their
relationship with you should work well in tax court but I am surprised it has
gone this far from your description.
[email protected]: Please see bottom of message if you wish to unsubscribe.
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My_question_is: Applicable to both US and
Canada
Subject:
Taxation
Expert:
[email protected]Date:
Wednesday January 16,
2008
Time: 08:37
PM -0000
QUESTION:
Hello There,
I was wondering if I could get
some guidance.
I had left Canada in 2000 to work in the US on an LI (spec
knowledge)Visa. I had lived there and work there and still do since then.
However in 2002, My wife pursued her grad studies in BC,Canada and we exchanged
visits.
Here are some facts:
1. I spent more than 10 months in the US (for
residence determination).
2. I have had permanent residences in 2 separate
states in the US all these years.
3. I have filed and paid US taxes and have
been deemed a US resident for tax purposes.
4. I have maintained a bank
account in Canada to pay for my wifes Tuition.
5. Every year since 2001 at
Canadian Tax time (when my wife files her Canadian Tax return), I call revenue
Canada and give them these facts and asked them if I have to file a Canadian Tax
return and they respond with a No I do not have to do anything. However they ask
me to call the International tax office and confirm. I do just that and they
respond that I do not have to do anything as i am not a resident. (I wish I had
taped them).
In any event I have recently received a letter from CCRA
stating that I owe taxes from 2002-2006. I have informed them that i am a
resident of the US for tax purposes. However because of my significant ties (My
Wife, and bank account) I have been determined to be a factual resident.
Here
are my questions.
1. What form do I need to fill out?.
2. Do they expect
me to declare all my US income, after converting it to Canadian dollars (when I
did not have the luxury of using all that converted amount which was very high
in the former years), as I had spent most of it in USD living in the US.
3.
How can I be a resident of two separate countries for tax purpose that have a
tax treaty?.
4. CCRA refuses to listen to my questions (besides trying to
find out what form to fill out) and simply states that in spite of being a
US tax resident, due to my significant ties, i am a factual resident of Canada
and have to file and pay the horrendous amount of taxes assessed. I checked all
the forms and they are correct
5.
6. I have a CCRA collections officer
chasing me, while i am trying to get answers to my situation.
What are my
options besides filing, which I intend to do as I do not want to face criminal
charges.
Any help or advice would be appreciated.
Thanks and
Cheers
--------------------------------------
david ingram
replies:
I agree that you are a factual resident of Canada BUT, and it is
a BIG BUT, you are A FACTUAL RESIDENT SUBJECT TO THE BENEFITS OF A TAX TREATY as
described in the government's own T1 General guide.
For the 2005 year it
is the top left hand paragraph "D" on page 10.
1. File
the Canadian returns and report all of your income and exempt it all on line 256
under Article IV of the US / Canada Income Tax Convention
(Treaty).
.
2. yes
3. You can't be under
the treaty - However, intent is important. If your wife is just
studying and intending to move to the US when finished and you have a green card
application in process, you are absolutely (in my opinion) only taxable in the
US. It also helps if she spends as much or more time visiting you in the
US as you spend coming up to Canada to visit her. I tell people in your position
to stay out of Canada and have your family visit you in the
US.
4. I disagree if you are intending to stay in the
USA. -- If, on the other hand, there was
never any intention to stay in the USA and you are intending to come back to
Canada in a year and your wife never visited you in the USA and you made no
effort to get a green card, the CRA might have a point but only might. Your
physical presence in the US clearly makes you a taxable resident of the US. Your
job means that your financial affairs are in The US. It would help if you
had filed a factual return each year since you left.
5.
??
6. That is his job. Hopefully, the arbitrary
assessments they have sent you are new enough you can file formal notices of
objection - i.e. within 90 days of their issuance.
Get the returns done
ASAP. Glad to to do them for you if
necessary.
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