Canadian Lawyer

48 J A N U A R Y 2 0 1 6 w w w . C A N A D I A N L a w y e r m a g . c o m from the Sept. 30 deadline to turn over 2014 tax information. The affidavit also stated that 155,000 "information slips" were submitted by financial institutions to the government to turn over to U.S. authorities. An information slip represented an account holder that could be an individual or a corporate entity. Eileen Martin, a partner in the Buf- falo, N.Y., and Toronto offices of Bar- clay Damon LLP, says there are other implications in addition to current tax filing obligations. "What about estate planning? Will the IRS get another shot at them?" she asks. Martin represents clients who are seeking to relinquish or renounce their citizenship, which can be costly and time-consuming and does not remove past tax obligations. "In Buffalo, there is a long backlog to get before an immigration judge," she says. The total number of Canadian resi- dents and citizens who are captured by the new reporting measures could be between 750,000 and two million people, the Federal Court heard. The first part of the Canadian court challenge was an attempt to obtain an injunction prohibiting the turning over of the personal tax information and a declaration that the provisions violated the terms of the Canada-U.S. Tax Trea- ty. The plaintiffs, Gwendolyn Deegan and Virginia Hillis, were born in the U.S. but came to Canada as children. They never worked in the U.S. nor pos- sessed U.S. passports. A summary trial took place before Federal Court Justice Luc Martineau last summer to ensure he could rule before the Sept. 30 deadline for com- plying with the reporting measures. The judge was sympathetic to the sit- uation of the plaintiffs, who described themselves as "accidental Americans," but Martineau said that was not the issue before the court. "The applica- tion of fiscal law is not concerned with rhetoric: It focuses on the actual reality of each taxpayer and his or her taxable income," he wrote in the ruling issued Sept. 16. The Federal Court judge found the L E G A L R E P O RT \ TA X FATCA IS AN IRS ENFORCEMENT TOOL. IT INCREASES THE RISK OF NOT BEING COMPLIANT. MAX REED, SKL Tax Canada's leading in-house counsel explore their challenges for the year ahead BROUGHT TO YOU BY COMING TO www.canadianlawyermag.com/canadianlawyer-tv/InHouse Chris Hoeschen UrtheCast January 4 Philip Moore TD Bank January 18 Marni Dicker Infrastructure Ontario December 28 Genevieve Richard Belron Canada January 11

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