"I always pay my taxes"
Cute...
You might want to double-check that, because it’s not as simple as “I pay my taxes.”
If you’re a U.S. citizen or green-card holder, you’re required by law to file U.S. federal income taxes on your worldwide income, no matter where you live, even if you also pay tax to Canada or another country. That’s under Internal Revenue Code §61 and 26 U.S.C. §1, which define taxable income as “all income from whatever source derived.”
In fact, the Foreign Account Tax Compliance Act (FATCA) gives the IRS direct reporting access to foreign banks and investment accounts, including Canadian institutions. Many Canadians in the U.S. have been caught by surprise when the IRS comes calling years later.
There’s a reason the IRS collects over $4.9 trillion annually, they don’t miss much, and their reach is global.
So yes, you may think you’re square, but unless you’ve properly declared every sale, foreign account, or capital gain, you could be one CRA/IRS data-exchange away from a “friendly reminder.” |
