Beginning in July of 2014, Canadian financial institutions will be required to start gathering and reporting information on accounts held by U.S. residents and U.S. citizens, including those who are resident of Canada.
The account information will be collected and reported to the Canada Revenue Agency (CRA), who will then transfer the information to the IRS. The reporting obligations arose as a result of the Foreign Account Tax Compliance Act (“FATCA”) and financial institutions who have to comply with FATCA will be assessing their account information to determine who may be a potential U.S. resident or citizen.
For accounts opened after July 1, 2014, financial institutions may ask you to declare whether or not you are a U.S. person. If a financial institution determines that an account is a “reportable account” then the financial institution is obligated to collect and report the required information.
The information that is to be collected and reported includes information about the account holder (i.e. name and address) and information about the account (i.e. account number and balance). The information only relates to certain types of accounts. For instance, RRSPs, RRIFs, RPPs and TFSAs are exempt from the reporting requirements. The financial institutions are also required to report on account holders who fail to respond to their financial institution when contacted about whether or not they are a U.S. person.
Once the information is reported, which is set to begin in 2015, the IRS will be entitled to use the information to verify that the account holders are in compliance with U.S. tax laws.
Thanks to Darren Buma of KWB Chartered Accountants for providing this content.
Darren Buma, CPA, CA
Partner
Darren completed is Bachelor of Commerce from the University of Alberta followed by his Chartered Accountant designation while working for one of the big-four firms in Edmonton.
Soon after receiving his accounting designation, Darren left public practice for nine years of experience in industry, holding various senior financial positions in both the high tech and real estate development sectors. In 2004 Darren returned to public practice and joined KWB.
With an aptitude for coaching entrepreneurs, Darren is passionate about delivering KWB’s ONSight Advisory services, helping his clients dramatically improve their businesses, and their personal wealth and happiness.
Internally, Darren focuses on innovation and technology solutions to help drive KWB forward.
Darren is blessed with a wonderful wife of over 25 years and together they are raising two sons who are currently both taking commerce at university. To keep the household busier, the family spends time chasing after their spunky Havanese-Poodle dog.
Darren is a big believer in giving back to the community. With a passion for the benefits of team sports for kids, Darren has coached minor hockey for over 13 years and is President of his local minor hockey association. Also wanting to give back to his profession, Darren is a member of the CPA Alberta Disciplinary Tribunal Roster, and is the past Chair of the Edmonton Chapter of Financial Executives International.
Outside of the office, Darren likes to play a few rounds of golf, spend time out at the lake, and lap his sports car around the local race track.
Darren's Contact Information
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Image Quality: