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This article was published 14/4/2016 (2053 days ago), so information in it may no longer be current.
OTTAWA - The federal privacy watchdog warns there is confusion about a Canada-U.S. deal aimed at zeroing in on tax cheats north of the border.
The U.S. Foreign Account Tax Compliance Act requires financial institutions in countries outside the United States to report information about accounts held by U.S. individuals, including Canadians with dual citizenship.
A deal between Ottawa and Washington says that unless an institution such as a bank decides otherwise, deposit accounts under US $50,000 do not have to be reported.
However, privacy commissioner Daniel Therrien says, Canada's income-tax law seems to require reporting on all accounts that fall under the provisions — regardless of dollar amount — unless the institution designates an account as exempt.
Therrien says it therefore may not be clear when accounts under US $50,000 will be reported to the Canada Revenue Agency, information that in turn would be passed along to the U.S. Internal Revenue Service.
"From a privacy perspective there's no question that clarity would be extremely desirable here," Therrien told a House of Commons committee on Thursday.
The commissioner said he has asked Canada's revenue agency for an explanation. He also wants to know:
— How many accounts under US $50,000 have been reported by institutions to date, resulting in the information being passed to the U.S.;
— Clarification as to why the first round of records sent to the U.S. was bigger than originally estimated;
— Details on what level of review the revenue agency applies to records transferred to the U.S.;
— The number of records related to Canadians the agency has received from the Internal Revenue Service as part of reciprocal sharing provisions.
Therrien said his office received a privacy impact assessment of the information-sharing initiative from the revenue agency in August that incorporated various recommendations.
The revenue agency agreed to reduce the period it will retain the information to seven years from a proposed 11 years, educate financial institutions about the risk of over-collection, take specific measures to safeguard the data and ensure the information is used only for tax-administration purposes.
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