Let's consider the following scenario
A US citizen spends more than 183 days in Canada, but is staying with relatives (not direct family, no spouse, no children)
He does not own or rent a home in US or Canada.
He does not have any ties in Canada.
He has no spouse or children.
He has a corporation, health insurance, accountant, personal and corporate bank accounts, personal and corporate credit cards and a cell phone in USA.
I assume he would be deemed a US tax resident under the treaty. Am I correct?
Residency tie breaker question
Moderator: Mark T Serbinski CA CPA
He spends about a month in US, the rest in various other countries. In the prior years he has spent less than 183 days in Canada with no significant ties.
He also has a relative's place available to him just like in Canada. Does the center of vital interests come into play here? and since his business and personal connections are closer to US, he would be a US resident?
He also has a relative's place available to him just like in Canada. Does the center of vital interests come into play here? and since his business and personal connections are closer to US, he would be a US resident?
Under the 183 day rule each PART DAY is counted as a day.
Under paragraph 2, there is no doubt that he would be considered US resident HOWEVER you only get to paragraph 2 if you can meet paragraph 1.
There might be a problem arguing the treaty considers him a US resident, based on the new clarification in Article IV(1):
"For the purposes of this paragraph, an individual who is not a resident of Canada under this paragraph and who is a United States citizen or an alien admitted to the United States for permanent residence (a "green card" holder) is a resident of the United States only if the individual has a substantial presence, permanent home or habitual abode in the United States, and that individual’s personal and economic relations are closer to the United States than to any third State.
Notice it says ONLY IF he has a home AND has substantial presence in US, is he considered US resident.
Canada deemed resident rules don't require any abode in Canada, merely being there for 183 days, even as a tourist.
So, his failure to have a substantial presence or home in US may be making him a deemed resident of Canada.
I would have no problem claiming he was NOT a deemed resident, because of the points that you already made, but be aware that CRA, if they were to ever get wind of him, might be able to make a case for deemed status based on the definition above.
Under paragraph 2, there is no doubt that he would be considered US resident HOWEVER you only get to paragraph 2 if you can meet paragraph 1.
There might be a problem arguing the treaty considers him a US resident, based on the new clarification in Article IV(1):
"For the purposes of this paragraph, an individual who is not a resident of Canada under this paragraph and who is a United States citizen or an alien admitted to the United States for permanent residence (a "green card" holder) is a resident of the United States only if the individual has a substantial presence, permanent home or habitual abode in the United States, and that individual’s personal and economic relations are closer to the United States than to any third State.
Notice it says ONLY IF he has a home AND has substantial presence in US, is he considered US resident.
Canada deemed resident rules don't require any abode in Canada, merely being there for 183 days, even as a tourist.
So, his failure to have a substantial presence or home in US may be making him a deemed resident of Canada.
I would have no problem claiming he was NOT a deemed resident, because of the points that you already made, but be aware that CRA, if they were to ever get wind of him, might be able to make a case for deemed status based on the definition above.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
I did read the treaty more carefully and I ran into Article XXVIA “Assistance
in Collectionâ€
It seems that even if he is found to owe money to CRA, there is not much CRA can do since he has no assets in Canada. And since he is a US citizen, IRS or the US government is not allowed to work with CRA to collect the tax that he would owe to CRA.
" 8. No assistance shall be provided under this Article for a revenue claim in respect of a taxpayer to the extent that the taxpayer can demonstrate that
(a) Where the taxpayer is an individual, the revenue claim relates to a taxable period in which the taxpayer was a citizen of the requested State,"
in Collectionâ€
It seems that even if he is found to owe money to CRA, there is not much CRA can do since he has no assets in Canada. And since he is a US citizen, IRS or the US government is not allowed to work with CRA to collect the tax that he would owe to CRA.
" 8. No assistance shall be provided under this Article for a revenue claim in respect of a taxpayer to the extent that the taxpayer can demonstrate that
(a) Where the taxpayer is an individual, the revenue claim relates to a taxable period in which the taxpayer was a citizen of the requested State,"