Please elaborate on the following comment in your last response : "I suspect however, that with the new changes to the 401(k) reules, you are probably now not so benefitted from DNR status".
Question here is Can I claim DNR status wef year 2005 which would eliminate filing taxes in Canada and may be I can get the refund on the taxes paid in Canada in the years 2005/6 /7.
Thanks
401(K)/IRA Deductions in Candian Tax Return
Moderator: Mark T Serbinski CA CPA
Please elaborate on the following comment in your last response : "I suspect however, that with the new changes to the 401(k) reules, you are probably now not so benefitted from DNR status".
Question here is Can I claim DNR status wef year 2005 which would eliminate filing taxes in Canada and may be I can get the refund on the taxes paid in Canada in the years 2005/6 /7.
Thanks
Question here is Can I claim DNR status wef year 2005 which would eliminate filing taxes in Canada and may be I can get the refund on the taxes paid in Canada in the years 2005/6 /7.
Thanks
What i meant was that with 401(K) dedcuted from your income on your Cdn return, your Cdn taxrate is probably comparable to your US one, so no benefit comes from you trying to declare yourself DNR for 2009 and beyond.
As to declaring yourself DNR for previous years, I repeat that you need to have some 'trigger' that changed your status. What ties in Canada did you break and what ties in US did you make in the period after you were declared Cdn resident.
But, yes, your fairlure to read NR73 correctyl (as I said earlier you shpuldn't even have filed it) and worse your failure to note the reason they gave you for their determination has cost you.
You'll have to fight to correct it.
As to declaring yourself DNR for previous years, I repeat that you need to have some 'trigger' that changed your status. What ties in Canada did you break and what ties in US did you make in the period after you were declared Cdn resident.
But, yes, your fairlure to read NR73 correctyl (as I said earlier you shpuldn't even have filed it) and worse your failure to note the reason they gave you for their determination has cost you.
You'll have to fight to correct it.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Based on what I have understood from your previous comments declaring myself DNR since 2005 does help me a lot. It would save me more than 20 K in back taxes.
The difference is due to the deductions I take on Sch A of Form 1040 for the Canadian Mortgage Interest Payment plus I can still keep the OHIP Card ( though I have never used it besides yearly medical check up) under DNR and save money on Health insurance Cost in USA.
My issue started in year 2006 with Appeals office of international Tax div when CRA changed the exchange rate used for US income and did not give me same exchange rate on RRSP amount which I had deducted in lieu of 401(K)(which we already have discussed was not permissible).The RRSP deduction issue itself costed me about 10 K.
Now my thought is mere filing up the Form NR73 and presenting facts as they were at that time should not affect my staus of DNR if I was protected under the IT 221 Para 24/25/26 and/or Article IV of the treaty where in I had stronger economic ties and "Center of Vital Interest" was in USA as I had 100 % Employement Income in on W-2 wages in USA plus I was reporting all world income in USA which was basically W-2 Earnings. My locus standi is going to be that Form NR 73 was not adjudicated fairly keeping this aspect of IT 221 and/or US - Canada tax treaty
I find this web forum very informative. Can I discuss this with you over phone or email how to fight it back as suggested by you or meet somebody at Serbinski Accounting Firms?
Thanks.
The difference is due to the deductions I take on Sch A of Form 1040 for the Canadian Mortgage Interest Payment plus I can still keep the OHIP Card ( though I have never used it besides yearly medical check up) under DNR and save money on Health insurance Cost in USA.
My issue started in year 2006 with Appeals office of international Tax div when CRA changed the exchange rate used for US income and did not give me same exchange rate on RRSP amount which I had deducted in lieu of 401(K)(which we already have discussed was not permissible).The RRSP deduction issue itself costed me about 10 K.
Now my thought is mere filing up the Form NR73 and presenting facts as they were at that time should not affect my staus of DNR if I was protected under the IT 221 Para 24/25/26 and/or Article IV of the treaty where in I had stronger economic ties and "Center of Vital Interest" was in USA as I had 100 % Employement Income in on W-2 wages in USA plus I was reporting all world income in USA which was basically W-2 Earnings. My locus standi is going to be that Form NR 73 was not adjudicated fairly keeping this aspect of IT 221 and/or US - Canada tax treaty
I find this web forum very informative. Can I discuss this with you over phone or email how to fight it back as suggested by you or meet somebody at Serbinski Accounting Firms?
Thanks.
Based on what I have understood from your previous comments declaring myself DNR since 2005 does help me a lot. It would save me more than 20 K in back taxes.
The difference is due to the deductions I take on Sch A of Form 1040 for the Canadian Mortgage Interest Payment plus I can still keep the OHIP Card ( though I have never used it besides yearly medical check up) under DNR and save money on Health insurance Cost in USA.
My issue started in year 2006 with Appeals office of international Tax div when CRA changed the exchange rate used for US income and did not give me same exchange rate on RRSP amount which I had deducted in lieu of 401(K)(which we already have discussed was not permissible).The RRSP deduction issue itself costed me about 10 K.
Now my thought is mere filing up the Form NR73 and presenting facts as they were at that time should not affect my staus of DNR if I was protected under the IT 221 Para 24/25/26 and/or Article IV of the treaty where in I had stronger economic ties and "Center of Vital Interest" was in USA as I had 100 % Employement Income in on W-2 wages in USA plus I was reporting all world income in USA which was basically W-2 Earnings. My locus standi is going to be that Form NR 73 was not adjudicated fairly keeping this aspect of IT 221 and/or US - Canada tax treaty
I find this web forum very informative. Can I discuss this with you over phone or email how to fight it back as suggested by you or meet somebody at Serbinski Accounting Firms?
Thanks.
The difference is due to the deductions I take on Sch A of Form 1040 for the Canadian Mortgage Interest Payment plus I can still keep the OHIP Card ( though I have never used it besides yearly medical check up) under DNR and save money on Health insurance Cost in USA.
My issue started in year 2006 with Appeals office of international Tax div when CRA changed the exchange rate used for US income and did not give me same exchange rate on RRSP amount which I had deducted in lieu of 401(K)(which we already have discussed was not permissible).The RRSP deduction issue itself costed me about 10 K.
Now my thought is mere filing up the Form NR73 and presenting facts as they were at that time should not affect my staus of DNR if I was protected under the IT 221 Para 24/25/26 and/or Article IV of the treaty where in I had stronger economic ties and "Center of Vital Interest" was in USA as I had 100 % Employement Income in on W-2 wages in USA plus I was reporting all world income in USA which was basically W-2 Earnings. My locus standi is going to be that Form NR 73 was not adjudicated fairly keeping this aspect of IT 221 and/or US - Canada tax treaty
I find this web forum very informative. Can I discuss this with you over phone or email how to fight it back as suggested by you or meet somebody at Serbinski Accounting Firms?
Thanks.
Another fact on Form NR 73 I want to point out is that It was filled to Determine Residency status for the Tax Year 2004.
As I recall now after checking the form thorouhly that the fact I filled Form NR 73 was : I was asked to fill that up by CRA ( filed on April 06, 2005 to determine how to file Year 2004 taxes before April 30, 2005), as In 2004 I had EI income in Canada and W-2 Income in USA and my world income base was in Canada.
Second letter from CRA also cofirms Factual Resident Status only for the year 2004.
For years 2005/6/7/8 I never filled another NR73. So the trigerring factor could be that my World Income base shifted from Canada to USA and I should be granted DNR wef Jan 01, 2005 for the tax years 2005 to 2008 under the US-Canada Tax Treaty. Please revert.
Thanks,
As I recall now after checking the form thorouhly that the fact I filled Form NR 73 was : I was asked to fill that up by CRA ( filed on April 06, 2005 to determine how to file Year 2004 taxes before April 30, 2005), as In 2004 I had EI income in Canada and W-2 Income in USA and my world income base was in Canada.
Second letter from CRA also cofirms Factual Resident Status only for the year 2004.
For years 2005/6/7/8 I never filled another NR73. So the trigerring factor could be that my World Income base shifted from Canada to USA and I should be granted DNR wef Jan 01, 2005 for the tax years 2005 to 2008 under the US-Canada Tax Treaty. Please revert.
Thanks,
Second triggering factor could be that nature of my job in the deteriorating economy and struggling auto sector became more stable in year 2005 and I have maintained/or advanced my position with Ford Motor Company making my economic ties stronger with USA and I started the green card process based on a stable job in the year 2005.
Thanks,
Thanks,
One does not file an NR73 every year. It applies until your situation changed.
If you did not give up OHIP and your DL, how can you be considered as living in US?
I have no doubt that if you had declerd yourself BNR when you got your US job in 2004, you would have had no problem. Even if you had been later asked to file NR73, you would have one -- provided that what you are saying aboutactually LIVING in US is true. But if you came home on weekends and still do, you are not DNR and never have been.
Once the determination was made, now the burden of proof falls on you to disprove, and your clear Cdn ties, which you still have not relinquished will work against you.
If you did not give up OHIP and your DL, how can you be considered as living in US?
I have no doubt that if you had declerd yourself BNR when you got your US job in 2004, you would have had no problem. Even if you had been later asked to file NR73, you would have one -- provided that what you are saying aboutactually LIVING in US is true. But if you came home on weekends and still do, you are not DNR and never have been.
Once the determination was made, now the burden of proof falls on you to disprove, and your clear Cdn ties, which you still have not relinquished will work against you.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
-I gave up my driving licence in October 2004.
- The letter from CRA says Sub : Residency Status for the 2004 Tax Year.
- I do come to Toronto but sometimes the gaps are more than 3 months eg recently Aug - Nov 2008 I could not travel outside US due to pending renewal of travel document ( Form I-131). In years 2005, 2006 and 2007 I have worked on many weekends and I have pay stubs to prove it.
- CRA letter says "we have based this opinion on the information provided. should your situation change, this opinion about your residency status may also change. This opinion may be subject to a more detailed review at a later date".
- I have provided all the facts about my Living and Working situaton in USA.
- I feel NR 73 is open for detailed review per CRA letter as it was never requested .
- My visa staus in 2004 was TN and changed to H1B on Aug 03, 2005 and have been working on Employment Authorization (EAD Card) since April 07, 2008 which clearly shows that from Aug 03 2005 I had intent to make USA as permanent base.
Let me have your opinion if it is a feasible case to fight.
Thanks,
- The letter from CRA says Sub : Residency Status for the 2004 Tax Year.
- I do come to Toronto but sometimes the gaps are more than 3 months eg recently Aug - Nov 2008 I could not travel outside US due to pending renewal of travel document ( Form I-131). In years 2005, 2006 and 2007 I have worked on many weekends and I have pay stubs to prove it.
- CRA letter says "we have based this opinion on the information provided. should your situation change, this opinion about your residency status may also change. This opinion may be subject to a more detailed review at a later date".
- I have provided all the facts about my Living and Working situaton in USA.
- I feel NR 73 is open for detailed review per CRA letter as it was never requested .
- My visa staus in 2004 was TN and changed to H1B on Aug 03, 2005 and have been working on Employment Authorization (EAD Card) since April 07, 2008 which clearly shows that from Aug 03 2005 I had intent to make USA as permanent base.
Let me have your opinion if it is a feasible case to fight.
Thanks,
Seems that you are coming to this very late. First you say that CRA requested NR73, and now you say they did not?
As CRA letter said, this determination was valid until your situation changed.
Having H1 or even GC does not by itself mean non-residency. Remember, I'm putting myself in the position of CRA, being asked to reverse a 5 year old decisioin, which was not contested, and in which nothing has changed for the past 4 years. You accepted their ruling for 4 years. Why should they now think they were wrong?
You've got lots of tap dancing to do for them to buy it. I already sais that if you had filed correctly in 2004, you would not have any problems. Its convincing them now, after all this time, that you didn;t realize that you were wrong that will be almost impossible to prove.
... and I'll leave it at that.
As CRA letter said, this determination was valid until your situation changed.
Having H1 or even GC does not by itself mean non-residency. Remember, I'm putting myself in the position of CRA, being asked to reverse a 5 year old decisioin, which was not contested, and in which nothing has changed for the past 4 years. You accepted their ruling for 4 years. Why should they now think they were wrong?
You've got lots of tap dancing to do for them to buy it. I already sais that if you had filed correctly in 2004, you would not have any problems. Its convincing them now, after all this time, that you didn;t realize that you were wrong that will be almost impossible to prove.
... and I'll leave it at that.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
- CRA are the one who asked me to fill NR 73.
- Second sentence regarding NR 73 : What I stated here was that DETAILED REVIEW OF NR 73 WAS NEVER REQUESTED BY ME".
- In fact I never questioned determination of being Factual Resident uptill recently when I have read your response to the threads on this web that Canadian Citizens having spouses and OHIP, DL can also claim DNR. I always thought it defacto determination by CRA to be correct as that is how Residential Ties to Canada are described in Tax Guides.
- I am surprised that you are not supporting your own statements regarding DNR status posted on the forum.
- Up till very recently I was not that knowledeable about the US Treaty/DNR status available to a canadian Citizen living in treaty country/ and IT 221 provisions about getting DNR.
- Also on the Form NR73 I declared ownership of house in USA in 2004 but did detail the Fact that I had about 240K Mortgage in USA and I have been making payments on Mortagage since 2004. I also got some Vehicle loans in 2005. Since 2004 I have been using about 75 - 80 % of AGI to serve Mortgages and loans in USA.
- If I was so naive about the Tax Treaty at that time (In 2004/5) and per your comments If I really do qualify to be assigned DNR status under the Canadian Tax Laws, I should not be penalized lack of knowledge of correct applicable law.
- My question is simle : can I ask for Review Form NR 73 from CRA with more precise information as the first one ( and only one NR 73) was filed for year 2004 only and would Serbinski Accounting Firm be willing to represent this case?
Thanks
- Second sentence regarding NR 73 : What I stated here was that DETAILED REVIEW OF NR 73 WAS NEVER REQUESTED BY ME".
- In fact I never questioned determination of being Factual Resident uptill recently when I have read your response to the threads on this web that Canadian Citizens having spouses and OHIP, DL can also claim DNR. I always thought it defacto determination by CRA to be correct as that is how Residential Ties to Canada are described in Tax Guides.
- I am surprised that you are not supporting your own statements regarding DNR status posted on the forum.
- Up till very recently I was not that knowledeable about the US Treaty/DNR status available to a canadian Citizen living in treaty country/ and IT 221 provisions about getting DNR.
- Also on the Form NR73 I declared ownership of house in USA in 2004 but did detail the Fact that I had about 240K Mortgage in USA and I have been making payments on Mortagage since 2004. I also got some Vehicle loans in 2005. Since 2004 I have been using about 75 - 80 % of AGI to serve Mortgages and loans in USA.
- If I was so naive about the Tax Treaty at that time (In 2004/5) and per your comments If I really do qualify to be assigned DNR status under the Canadian Tax Laws, I should not be penalized lack of knowledge of correct applicable law.
- My question is simle : can I ask for Review Form NR 73 from CRA with more precise information as the first one ( and only one NR 73) was filed for year 2004 only and would Serbinski Accounting Firm be willing to represent this case?
Thanks
[quote]- I am surprised that you are not supporting your own statements regarding DNR status posted on the forum. [/quote]
Huh? I have said at least THREE TIMES that in my opinion you were DNR form 2004.
What I have also said is your failure to contest this for so long will make it more difficult for you to now convince CRA that they were wrong. You've been asleep at the wheel for so long.
I don't represent anyone but myself,. That should be clear by my signature. Call serbinski if you want.
Your mistake on your NR73 was that you did not state that your were taxable in US
Huh? I have said at least THREE TIMES that in my opinion you were DNR form 2004.
What I have also said is your failure to contest this for so long will make it more difficult for you to now convince CRA that they were wrong. You've been asleep at the wheel for so long.
I don't represent anyone but myself,. That should be clear by my signature. Call serbinski if you want.
Your mistake on your NR73 was that you did not state that your were taxable in US
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
- For the year 2004 for which NR73 was filed I had to report world Income in Canada as determined by IRS and CRA at that time and that was a true statement for the year 2004 ( ie. I did not report world income in USA) as for the first 4.7 months I was on Employment Insurance in Canada.
- So I guess my contention starts wef from Jan 01, 2005 as I have stated earlier my world income 100 % was based on W-2 statement and were taxed in the Treaty Country USA.
Looks like I should apply NR73 for years 2005/6/7/8 and report my world income in USA and request for new determination on Residency Status for the subject years
Thanks
- So I guess my contention starts wef from Jan 01, 2005 as I have stated earlier my world income 100 % was based on W-2 statement and were taxed in the Treaty Country USA.
Looks like I should apply NR73 for years 2005/6/7/8 and report my world income in USA and request for new determination on Residency Status for the subject years
Thanks
Are you saying that you did NOT report world income to IRS for all these years?! That you have been filing a 1040NR for all this time?
Then you have no hope of winning a DNR determination.
Then you have no hope of winning a DNR determination.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best