Former Wild Rose Conservative MP Myron Thompson, who was born in Colorado but moved to Canada in 1968, is expressing concern about new U.S. tax rules impacting American-born Canadians.
Under the U.S. 1913 Foreign Tax Compliance Act, or FATCA, American-born Canadian citizens who have not filed income taxes in the States, even if they don't owe any taxes down there, you are now being required by law to file taxes every year, he said.
“I don't know of any of us who have done that because we were never told that you had to,” said Thompson, a Sundre resident whose wife Dot is also an American-born Canadian citizen. “I've never filed in 43 years and nobody has ever mentioned it. But now they are enforcing this law from 1913.”
Thompson says he has been receiving a number of calls from people in the region who have cancelled planned trips to the U.S. over concerns with the new rules.
“They are being told (at the border) that they could possibly be arrested for having not followed that law,” he said.
American-born Canadian citizens who don't comply with the FATCA law could face serious trouble, he said.
“It sounds like the U.S. is in so much trouble down there that they are grasping at straws to get their hands on money,” he said. “And the penalties for not complying are very high and expensive. They could take up to a third of your assets for not filing.
“In many cases of people who have built businesses here, construction companies, homesteaded farmers, and who have been here for 40, 50, 60 years, are going to be questioned about why they haven't filed.”
For Thompson, who had been planning to visit family in the U.S. during American Thanksgiving at the end of this month, the questions are particularly pressing.
“Do I go or do I not?” he said. “Am I taking a chance of getting arrested because I didn't file income tax down there? I'm wondering where this is going to lead.”
Thompson says he is thinking about hosting an information session about the new rules and their possible impact on people living here.
“In the near future we need to get together and get people informed about this,” he said.
In a speech last week, Canada's Minister of Foreign Affairs Jim Flaherty, said Canada is concerned about the changes down south.
“Most of these (American-born) Canadian citizens, many with only distant links to the United States, have a very limited knowledge of their tax reporting obligations to the United States,” said Flaherty. “These are honest and law-abiding people, including many senior citizens now caught in a nerve-racking situation.
“The threat of prohibitive fines for simply failing to file a return they were unaware they had to file, is a frightening prospect that is causing unnecessary stress and fear among law-abiding hard-working dual citizens.”
Myron Thompson, who was Wild Rose MP from 1993 to 2008, says he plans to be in contact with current Wild Rose MP Blake Richards regarding the matter.
