Our firm's tax groupies often ask us what is happening in
the tax world. Given that we are in the heart of the summer, we
thought it would be a good time to list the top five tax matters /
issues that we are waiting for. Ok... ok... tax groupies might be a
bit of a stretch, but we can only hope.
1. Direction from the Internal Revenue Service
("IRS") regarding simplified "catch-up"
procedures for "low risk" US persons who are not
On June 26, 2012 the IRS announced new
procedures that will enable non-resident US taxpayers who
demonstrate "low compliance risk" to bring unfiled tax
returns and related tax reporting obligations current and avoid
potentially ruinous penalties. The new procedures will become
effective September 1, 2012 and further details will be announced
in advance of that date. All of this was discussed in our June 28,
We are rapidly approaching September 1, 2012 and are anxiously
awaiting detailed guidance from the IRS. This will be of great
importance and interest to US persons who are resident in Canada.
Of course, we will react quickly and thoughtfully to the guidance
when it is released.
2. Department of Finance technical bill
As mentioned in our February 1, 2012
blog, the Department of Finance is responsible for introducing
tax legislation. Over the years there has been a tremendous of
amount of technical amendments that have not been passed. Rampant
rumors surfaced over the last six months or so that the Department
of Finance was getting ready to release a large technical bill to
pass much of the proposed amendments over the last ten years. Most
tax practitioners have welcomed this. While we believe the rumors
are true, the obvious question is when? No one knows for sure but
we are hoping for sometime this fall. Fingers crossed.
3. Interpretation Bulletins ("ITs") and Information
The Canada Revenue Agency ("CRA") has, in recent
years, toyed with the idea of rescinding its ITs and ICs
publications. Such publications are out of date. However, the
professional tax community offered to work with the CRA to try and
update the very useful publications. The CRA appears to have
responded positively to the professional community and announced
last week that it will be replacing its ITs and ICs with a new
initiative that it is calling Income
Tax Folios. The Folios will be organized by subject matter and
subdivided into various
chapters. The CRA announced, in conjunction with this new
initiative, that certain ITs and ICs will be
phased out. Kudos to the CRA for this great new initiative! We
look forward to seeing the first Folios being released soon.
4. CRA 2012 Budget follow-up
In the 2012
Federal Budget the Department of Finance announced significant
budget cuts for various government departments. With respect to the
CRA, the Budget
documents contained the following statement:
The Canada Revenue Agency continues to modernize its operations
and reduce red tape to enhance services to Canadians while reducing
its overall costs. It is increasingly providing services
electronically to make it easier for Canadians and businesses to
interact with the Agency at the lowest possible cost. By
simplifying the way it collects taxes and distributes benefit
payments, the Agency will ensure Canadians and small and
medium-sized enterprises receive the benefits and credits to which
they are entitled as efficiently and quickly as possible. In
addition, the Agency will leverage the expertise of tax
professionals to improve the effectiveness of its operations.
The obvious question is how will the CRA "leverage the
expertise of tax professionals...?" The CRA has not
announced their plans yet. Accordingly, tax professionals are
awaiting guidance on this matter. Stay tuned!
5. Registration system for Canadian tax preparers?
Our November 21, 2011
blog shared our thoughts about this possibility given the
momentum this initiative has had around the world. The latest
country that seems to have joined the momentum is
South Africa. Noticeably absent from that momentum has been
Canada. My educated guess – and it's only a guess
– is that Canada will eventually follow suit.
So there you have it... we will keep our "groupies"
informed as soon as there is action to report. In the meantime,
enjoy your summer.
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The United States is often called the land of opportunity for business owners and investors. Before you or your business can successfully access that opportunity, thoughtful planning with U.S. tax and immigration laws is a prerequisite. Missteps with tax planning can result in time consuming audits and expensive penalties while minor immigration infractions can result in anything from rejection or revocation of status to a potential bar from re-entry to the United States.
With the 2017 federal budget likely due to be released in late February or March, there is speculation that the government may curtail the preferential tax treatment afforded to gains on the disposition of capital property
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