Canadian resident has worked in the US Article IV of
This is a multi-part message in MIME format. ---------------------- multipart/alternative attachment Dear, My case is little tricky and I need your input please. Couple of guys = used=20 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=20 cases to Ottawa internaional tax center. My situation is that I am = working=20 in states for the last three years and filing return in both US and = Canada=20 but because I lived in States in first two years, thats why I did not=20 declare that income in my Canadian tax returns. I filed Canadian tax = returns=20 for Candian income for those both years (2000 and 2001). My family was=20 continuously living in Canada for those two years. Then I moved back to=20 Canada to join my family in 2002 and filed Canadian and US returns = again.=20 This time I showed my US income in Canada. Last year I got re-assessment = for=20 year 2001 and 2002. They asked only clearance for rent/property tax for = 2001=20 and details of my employment expenses for 2002. Now I do not know why = they=20 refered my case to Ottawa international tax office. What do you think = about=20 my 2000 and 2001 Canadian returns. Did I do right thing by not showing = my US=20 income because I was not living in Canada or I did something wrong. If I = did=20 wrong, what should I do now and how can I avoid the bad consequences. = Will=20 they stick to the current assessment for employement expenses or they = will=20 check the returns thoroughly. If they think I hide my US income from = them,=20 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=20 States. Was I right to file Canadian tax return for income generated = from=20 Canada but I was living in States. At this moment I am totally confused = and=20 need your help to get out of this situation. I heard that Ottawa takes = three=20 to six months for investigation and I want some solution before they = come to=20 conclusion. Thank for sparing your priceless time for me. IXXXXXXXXX _________________________________________________________________ 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. =20 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=20 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:=20 (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=20 (b) (i) A trust, organization or other arrangement that is operated = exclusively to administer or provide pension, retirement or employee = benefits, and=20 (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.=20 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:=20 (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);=20 (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;=20 (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;=20 (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.=20 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=20 davidingram@shaw.ca 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,=20 California, Colorado, Connecticut, =20 Delaware, District of Columbia, Florida,=20 Garland, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,=20 Louisiana, Maine, Maryland, =20 Massachusetts, Michigan, Minnesota, =20 Mississippi, Missouri, Montana, Nebraska, =20 Nevada, New Hampshire, New Jersey,=20 New Mexico,New York, North Carolina, =20 North Dakota, Ohio, Oklahoma, Oregon.=20 Pennsylvania, Rhode Island, Rockwall,=20 South Carolina, South Dakota, Tennessee, =20 Texas, Utah, Vermont, Virginia,=20 West Virginia, Wisconsin, Wyoming,=20 British Columbia, Alberta, Saskatchewan,=20 Manitoba, Ontario, Quebec City,=20 New Brunswick, Prince Edward Island,=20 Nova Scotia, Newfoundland, Yukon and=20 Northwest and Nunavit Territories, =20 Mount Vernon, Eumenclaw, Coos Bay=20 and Dallas Houston Rockwall Garland=20 Texas Taxman and Tax Guru and wizzard=20 wizard - Your name has been added to our email list because of an = enquiry we have received, we may not answer your question but=20 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 taxman@centa.com www.centa.com www.david-ingram.com ---------------------- multipart/alternative attachment An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/0d97cbdd/attachment.htm ---------------------- multipart/alternative attachment--
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