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IRS puts the bite on Canadians

September 21, 2011 | 11:55 am

Canadian Money

I cannot explain, I cannot even adequately summarize, this story about a U.S. government agency staging a virtual invasion of Canada -- at least of its residents' wallets. You should read it for yourself.

Canada's finance minister has had something to say about this too.

Really, IRS? Really, Congress?

We have a tax code designed to look the other way so that, while big companies can thump their chests and call themselves "American," at the same time they can also rent a post office box in the Caymans to dodge the tax responsibility that goes along with being American.

That entire corporate tax-dodge figure may hover around $100 billion -– more than the bill for the entire stimulus/bailout package.

The GAO, in a 2008 report, referred to one building in the Caymans. This building, Ugland House, which President Obama referred to as "[either] the biggest building in the world or the biggest tax scam in the world,'' was then home to 18,857 businesses, many of them subsidiaries of American companies -– a few of the very same companies that would be soon receiving federal bailout money. It wasn't a massive building; most of those thousands of businesses were "headquartered" in a single P.O. box, an address that allows them to "off-shore" profits.

Can anyone believe these companies are actually pulling out the checkbooks and ponying up what they owe when the IRS comes knocking? Is the IRS even bothering to pound on the doors of the companies that own those little post office boxes? But the IRS is sure shaking down the low-hanging fruit, the ordinary citizens of the sleeping giant to our north, where, if I remember, the much-mocked Canadian dollar recently and briefly nosed ahead of the U.S. dollar in value.

These Canadians are understandably flabbergasted at this IRS strong-arm trick-or-treating of taxation without representation; for them, the U.S. government is acting rather like the British monarchy this country threw off well over 200 years ago. If they decided to retaliate by stopping shipments of maple sugar, actors, game-show hosts and comedians, I wouldn't blame them a bit.

These people are Canadian, but they're being classified as Americans by the IRS. What a contrast to huge companies that claim to be proudly American -– but when it's tax time, they act like anything but.

ALSO:

Meddling with monetary policy

Reasons against taxing the super-rich

Taxing the wealthy to stimulate the economy?

-- Patt Morrison

Photo: A Canadian fifty-dollar bill. Credit: Brent Lewin / Bloomberg

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