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ONTARIO PROPERTY TAX and INCOME TAX

Ont. Muncipal Property Tax Appeals

Think that MPAC unfairly set your property value and hence your municipality set your property tax too high? Dr. Montgomery will pepare Requests to Reconsider to MPAC, and Appeals to the Ont. Assessment Review Board (ARB). For taxes lower than $10,000 he will usually do this for a flat fee of $5000 + HST and $200 for expenses (including ARB filing fee of $150). For higher taxes he will do on a contingency arrangement: He keeps 40% of the amount you saved (tax reduction). e.g If he succeeds in lowering your tax bill by $12000 you pay him 40% or $4800. Along with two others (small team of commercial realtor and ex MPAC officer) we succeeded in late 2016 in getting many commercial units in one downtown Toronto location re-assessed at only 50% of the current MPAC value, thru a series of intensive negotiations with MPAC and some input from ARB members. Of course we cannot promise such spectacular success in every case, but we will do our best.

INCOME TAX:

If you owe over $6000 in income taxes, Dr. Montgomery can assist in making Objections, handling first level appeals, and making Taxpayer Relief (Fairness) applications for Canadian residents, and as a last resort going to the federal Tax Court. The longer you wait the harder it is for him to succeed, so if you are in a serious dispute with CRA, see him BEFORE they freeze your bank account and before they start to sell your home. Waiting only makes things worse. Do not worry if you have not filed income taxes in many years, or even if you filed false information in your returns.  CRA has a special voluntary disclosure program to encourage people like you to file without being penalized.  To quote from the CRA " The VDP promotes compliance with Canada’s tax laws by encouraging taxpayers to voluntarily come forward and correct any previous errors or omissions in their tax affairs. If a VDP application is accepted by the CRA, taxpayers will have to pay the taxes owing, plus interest in part or in full. However, taxpayers would be eligible for relief from prosecution and, in some cases, from penalties that they would otherwise be subject to under the legislation. But be sure to consult us before contacting CRA.

Mr. Montgomery can assist Americans living in Canada who have not filed Canadian taxes yet, and can help Canadians who live in the US or have green cards or are Snowbirds who spend over half their time in the US and thus subject to filing US taxes. (see details below)

US - CANADA INCOME TAX ISSUES:

US residents (Green Card holders) are deemed to be "Resident Aliens" of the USA even if Canada considers you a Canadian resident for tax purposes. This means you must file US tax returns annually. Attention Snowbirds: Even if you did not spend 184 days in the US this year, you may be deemed to be a US resident alien for tax purposes and hit with big penalties and fines for failing to file US tax returns going back 6 years or more. For resident aliens there is also a Treasury Board form that you must file (not to IRS) specifying all your Cnandian bank accounts, pension funds and other assets. Huge potential penalty for not filing this annually. Filing "resident alien" US tax returns can be complex. There are several forms that you need to fill and file. Don't assume the US tax return software you bought will complete all of them. Certainly the free software often does not have a place to enter taxes paid in Canada so you can get a credit from the Canada US Tax Convention (commonly called Treaty). You could end up paying double tax. If you are self-employed you must pay US SE tax (social security and medicare contribution) even if all of the self-employment was outside of the US!

Canadians: You may not even have been in the US for many years or even in the memory of your lifetime but be deemed a US citizen and not even know it (due to distant relatives, etc.) so you may be hit with big penalties and fines for failing to file US tax returns going back 6 years or more. "Out of the blue" you could be hit with an "Alternate Minimum Tax" of US$10,000.

The US is broke and the IRS is on a crusade to track down as many possible taxpayers as they can. CRA and IRS share information (although they will not co-operate to help you resolves cross-border issues) and can easily track you down.

Don't be naive or optimistic and do nothing hoping you won't be "hit". You will eventually got caught in a cross-border tax problem which will cost you a lot of grief.

Americans living in Canada: As an immigration lawyer Dr. Montgomery has helped several Americans get Canadian residency. But these Americans cannot simply now ignore US tax law and just file Canadian income tax returns or they will end up with big problems.You still need to file an annual US tax return.  Just because you live in Canada you cannot forget the IRS. (Unless you renounce your US citizneship, but even then you need to file tax returns up to that point.) This is because the US taxes on world income wherever you live so if you are a US citizen or resident (even if you have no immigration status in the US you can be deeemd a resident for income tax purposes). Canada also taxes on world income but only if you live in Canada for some or all of that tax year. If you earned income, even if it is from the Canadian government, but did not live in Canda for a given year, you need not file a Cdn tax return for that year. It is assumed you will file and pay in the coutnry you are living in. There is a Canada - US tax treaty to prevent double taxation but in my experience US tax officials tend to ignore it unless you draw it to their attention by filing a certain form. And since US and Cdn taxes differ, it is not a simple matter to apply the treaty. Likewise there is a US-Cda treaty on social security. But whenever the US changes its tax laws they do not think about the treaties until after their new laws have been passed. Also, US states are not a party to the Cda-US tax treaty so you may be "hit" with State income taxes owed even though you do not consider that you live in that state. Some states such as New York do have a treaty with Ontario.

These are not scare tactics or even rare cases - all these things have happened to people recently.

Did you know that if you cash in a Canadian RRSP the US expects you to pay tax not only on the original amount but on all additional income from the plan (interest, dividends, any capital gains) starting from since you got your green card? It is very difficult to cash in an RRSP once you are a US resident, without tax problems. When it comes to estates (after death) and purchase and sale of houses cross-border, you can end up paying "big time" if you do not hire an expert.