New tax rules keep Townshipper busy
The Stanstead region certainly has its fair share of dual Canadian/American citizens, most of them ‘Accidental Americans’ whose mothers rushed to the nearest hospital, in Newport, Vermont, when it was time. Unfortunately, those same dual citi-
zens are now doing ‘double duty’ when it comes to tax time, having to fill out both Canadian and American tax returns, not to mention the FBARs: the reports of their bank holdings.
Ayer’s Cliff’s Norman Benoit, who has been preparing income tax returns for over forty years, has been pretty busy as a result of those strict American tax laws. “Rather than retiring, I started doing US tax returns,” said Mr. Benoit, who is also known for operating the Rose des Champs for ten years, in an interview with the Stanstead Journal. “Contrary to other countries, the United States taxes citizenship, not residency. That law has been there since 1913 but it was never applied. But after the terrorist attacks, the United States wanted to trace the money of American citizens living abroad to see where their money was going. It was discovered that many Americans had hidden money outside of the country,” explained Mr. Benoit candidly.
“When the law first came out, there was a panic. Since then, many have done their US returns and others don’t bother. When someone asks me if they should fill out a US tax return, I urge them to do it if they are worried about it; it’s not worth losing sleep over.” In fact, most of Mr. Benoit’s clients have not had to pay any money to the American government after filling out their returns. There is also a ‘streamlined process’ that can be done, as long as the dual citizen has not been contacted already by the IRS. “If a dual citizen does the streamlined process, they get a clean bill of health. Then, every year, they just have to do their tax returns.”
Another question that Mr. Benoit is often asked by dual citizens is whether or not they should renounce their US citizenship to avoid the yearly task of filling out US tax forms. “There is an American fee of around $2,500 to renounce citizenship and you have to provide a police report. There are also tax returns of the last five years and estate forms to fill out,” he said, adding: “There is a small desire in the United States to make it easier for Accidental Americans to renounce their citizenship, but it’s not around the corner.”
According to this tax expert, snowbirds who are not dual citizens may also end up having to provide financial information to the United States government. “If someone has spent more than 183 days in the United States over the last year, and that can include just crossing over to get gas, they may have to fill out US tax residency forms. But they can also fill out another form declaring that they spend time in the United States for leisure only. But you must keep in mind that the United States deficit is growing, on aver- age, by about $2 million a minute so, at one point, things will get desperate.”
A fourth generation Townshipper, Mr. Benoit may not be your typical accountant. He gave up a plush bank job decades ago to get in touch with his rural roots, trying his hand at bee-keeping, dairy farming, beef farming and, most recently, growing roses on a grand scale. After living in a solarpanelled, wind-generated home for about seven years, he’s finally getting connected to the big grid, to make life a little easier in his ‘semi-retirement’.
But he did conclude with this practical advice: “There are always Urban Legends going around about US taxes, Canadian taxes also. People should not hesitate to call Revenue Canada, the IRS, or a professional to get the facts.”
Ayer’s Cliff accountant Norman Benoit, instead of retiring after closing his Rose des Champs tourist destination, is keeping busy doing US tax returns for local dual citizens.