There are rumours circulating that the IRS may be hearing the complaints from Canadian officials. The Financial Post recently ran an article entitled IRS strikes a conciliatory tone towards Canadians.
The IRS “recognizes that many Canadians face complex tax situations because of dual citizenship,” Terry Lemons said in a statement. Recent publicity about the issue “has spotlighted a number of areas that the IRS will consider in our continuing effort to strike the right balance in administering the U.S. tax laws,” he said.
While not exactly a promise of leniency, this statement at least offers a glimmer of hope for those of us filing for the first time with our fingers crossed and knots in our stomach.
UPDATE: Reuters reports that Canada’s Finance Minister, Jim Flaherty, expressed “cautious optimism on Wednesday that Canada would be granted an exemption from an onerous U.S. tax reporting law that he called an inefficient use of capital.”
Don’t get too excited, though, because the IRS quickly responded that “an exemption for Canada was not under consideration.” The best we can hope for is that the IRS is “talking with foreign governments to figure out how we can implement FATCA in a cooperative way and leverage our existing relationships.”
So Canadian expats are still in limbo, although the IRS does seem to be getting the message that the drug lords and money launderers FATCA is meant to catch are not likely to be hiding out in the Frozen North!