IRS Manual on informant's rewards - A Canadian who buys US property.
My_question_is:
US-specific
Subject: A Canadian who buys US property.
Expert: [email protected]
Date: Monday February 19, 2007
Time: 09:33 PM -0500
QUESTION:
My neighbours parents have bought and sold 3 properties in the US and have not declared any of the profits that they made.What could be the tax consequences if the tax dept finds out?
What if Canadians purchase property and flip it and do not declare any of the profits in Canada? Thanks for your information.
-----------------------------
david ingram replies:
A non-resident of the US who sells a property is subject to US capital gains and Alternative Minimum Tax of up to 28% of the capital gains. Failure to file and report has serious US AND Canadian tax consequences.
A usual sale by a non-resident would result in 10% of the gross sales price being withheld and in most cases, this is enough to cover any tax withheld. However, failure of the non-resident to file the return (even with a refund coming) can result in a US fine of $1,000 to $10,000 per person.
You are in luck - there is a reward of 1 to 15% of the tax collected in the US. Canada has no reward system at the moment.
To get the most money, you need to give addresses and dates.
Read this older Q & A.
Sent: Tuesday, July 11, 2006 3:21 PM
To: [email protected]
Subject: CHED Radio, Edmonton
Hi David,
I heard your show with Leslie Primeau last night and I sure found it interesting and entertaining.
I was curious though, what are the rewards for reporting a US citizen for tax evasion? Is it a percentage of the total or a flat rate?
Thanks,
--------------------------------------------------------------------
david ingram replies;
Glad you enjoyed the radio show. It is actually hard to understand for some, but income tax preparation is an amazingly interesting business because of the people one deals with.
The United States pays rewards of from 1% to 15% of the actual tax collected for information provided.
15% is paid for specific and responsible information materially helping in the investigation and resulting in the recovery or was a direct factor in the recovery. This can even apply when the IRS is already involved in an audit and you come forward and give them an important direction to go.
10% is paid for information that causes an investigation or if already under audit caused an investigation of an issue.
1% is paid when you cause the audit but had no direct relationship to the determination of liabilities.
None of the above rewards shall exceed $10,000,000.
You can find the claim form 211 at http://www.irs.gov/pub/irs-pdf/f211.pdf
Good Luck! - Oh yes, even though the IRS does NOT withhold tax when paying the reward, it "IS" taxable in both countries because it is for services rendered.
The information for Informant's rewards can be found in the IRS Manual Part 25, Chapter 2, Section 2 at:
http://www.irs.gov/irm/part25/ch02s02.html
-----------------------------------------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
email to [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 and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Saudi Arabia to Mexico to China or Chile - Cross border, dual citizen - out of country investments are all handled with competence & authority.
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin, Hamburg
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany Zimbabwe
international non-resident cross border income tax help assistance expert preparation & immigration consultant david ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants
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 - consultant - expert - advisor -advisors consultants - gurus - Paris Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo Zimbabwe
David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits
This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, 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, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US
Subject: A Canadian who buys US property.
Expert: [email protected]
Date: Monday February 19, 2007
Time: 09:33 PM -0500
QUESTION:
My neighbours parents have bought and sold 3 properties in the US and have not declared any of the profits that they made.What could be the tax consequences if the tax dept finds out?
What if Canadians purchase property and flip it and do not declare any of the profits in Canada? Thanks for your information.
-----------------------------
david ingram replies:
A non-resident of the US who sells a property is subject to US capital gains and Alternative Minimum Tax of up to 28% of the capital gains. Failure to file and report has serious US AND Canadian tax consequences.
A usual sale by a non-resident would result in 10% of the gross sales price being withheld and in most cases, this is enough to cover any tax withheld. However, failure of the non-resident to file the return (even with a refund coming) can result in a US fine of $1,000 to $10,000 per person.
You are in luck - there is a reward of 1 to 15% of the tax collected in the US. Canada has no reward system at the moment.
To get the most money, you need to give addresses and dates.
Read this older Q & A.
Sent: Tuesday, July 11, 2006 3:21 PM
To: [email protected]
Subject: CHED Radio, Edmonton
Hi David,
I heard your show with Leslie Primeau last night and I sure found it interesting and entertaining.
I was curious though, what are the rewards for reporting a US citizen for tax evasion? Is it a percentage of the total or a flat rate?
Thanks,
--------------------------------------------------------------------
david ingram replies;
Glad you enjoyed the radio show. It is actually hard to understand for some, but income tax preparation is an amazingly interesting business because of the people one deals with.
The United States pays rewards of from 1% to 15% of the actual tax collected for information provided.
15% is paid for specific and responsible information materially helping in the investigation and resulting in the recovery or was a direct factor in the recovery. This can even apply when the IRS is already involved in an audit and you come forward and give them an important direction to go.
10% is paid for information that causes an investigation or if already under audit caused an investigation of an issue.
1% is paid when you cause the audit but had no direct relationship to the determination of liabilities.
None of the above rewards shall exceed $10,000,000.
You can find the claim form 211 at http://www.irs.gov/pub/irs-pdf/f211.pdf
Good Luck! - Oh yes, even though the IRS does NOT withhold tax when paying the reward, it "IS" taxable in both countries because it is for services rendered.
The information for Informant's rewards can be found in the IRS Manual Part 25, Chapter 2, Section 2 at:
http://www.irs.gov/irm/part25/ch02s02.html
-----------------------------------------------------------
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)
email to [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 and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Saudi Arabia to Mexico to China or Chile - Cross border, dual citizen - out of country investments are all handled with competence & authority.
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin, Hamburg
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany Zimbabwe
international non-resident cross border income tax help assistance expert preparation & immigration consultant david ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants
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 - consultant - expert - advisor -advisors consultants - gurus - Paris Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo Zimbabwe
David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits
This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, 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, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US
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