How do I correct or dispute inaccuracies on my credit file?


I get lots of questions related to Credit Bureaus and items which show up well after they have been paid or which do not belong on there at all.

Having worked for Equifax many, many years ago right after I started working for the CRA and they release all the temporary staff for an 11-month period due to budget cuts, I can proudly say that Equifax makes it very easy to communicate with them regarding any such issues.

It’s all laid out on their website, but I provided a summary here:

Complete and submit a Consumer Credit Report Update Form to Equifax.

It is necessary to specify what information is incorrect or what information does not belong to you.

Equifax will verify that information afterwards as part of their investigation.

You will need to include photocopies of all necessary documents and identification to update your personal Credit Report (Ex: receipts, legal documents, 2 photocopies of pieces of valid identification, including proof of current address)

Fax the request to them at:

Fax: (514) 355-8502

Your request will be processed within 10 to 15 business days. After this period has elapsed, a confirmation letter will be sent to your mailing address.

OR

By Mail:

Equifax Canada Co.
Consumer Relations Department
P.O. Box 190, Station Jean-Talon,
Montreal, Quebec H1S 2Z2

Your request will be processed within 15 to 20 business days . After this period has elapsed, a confirmation letter will be sent to your mailing address.

Equifax will verify the necessary information and mail you a confirmation.

 

Could it be any easier than that?!?

 

Ramping up for FATCA: Americans living in Canada

In case you have just starting to catch wind of FATCA and you are wondering if you are going to get caught up in its web, you might find this post very useful.  I have gone to the Internal Revenue service (IRS) website and pulled out their passages on American’s living in Canada and the expectations on how they will be handled under FATCA – coming globally January 1st, 2013.

The IRS has clearly stated that “All persons born in the United States are US citizens.  This is the case regardless of the tax or immigration status of a persons parents.  Furthermore, a person born outside the United States may also be a US citizen at birth if at least one parent is a US citizen and has lived in the United States for a period of time.”

This is the link to that information from the IRS website; http://www.irs.gov/businesses/small/international/article/0,,id=244868,00.html

If you are of the belief that as an American living in Canada that you do not need to file a US tax return because you do not generate any US source income in any way, that is also incorrect;  “The IRS reminds you to report your worldwide income on your US tax return and lists the possible consequences of hiding income overseas.”

More information on consequences of hiding income overseas (including Canada) in this link.  I have broken out some key facts below; http://www.irs.gov/businesses/article/0,,id=180946,00.html

As a US citizen living in Canada, the rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same whether you are living in the US or not.

Not reporting income from foreign (including Canadian) sources may be a crime.  The IRS and its international partners (including the CRA) are pursuing those who hide income or assets offshore to evade taxes.  Specially trained IRS examiners focus on aggressive international tax planning, including the abusive use of entities and structures established in foreign jurisdictions.  The goal is to ensure US citizens and residents are accurately reporting their income and paying the correct tax. 

In addition to reporting your worldwide income, you must also report on your US tax return whether you have any foreign (Canadian or international) bank or investment accounts.  The Bank Secrecy Act requires you to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if:

  • You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
  • The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

More information on foreign financial account reporting requirements is in News Release FS-2007-15, Foreign Financial Accounts Reporting Requirements and Publication 4261, Do You have a Foreign Financial Account?

This link below outlines the filing expectations for US Citizens and resident aliens abroad.  You have until June 15th to file your US tax returns each year:

http://www.irs.gov/businesses/small/international/article/0,,id=97324,00.html

Most common question I have been asked:

“I am a U.S. citizen who moved to Canada to live and work there as a Canadian permanent resident, do I pay both U.S. and Canadian Taxes?

Answer: As a U. S. citizen living in Canada you:

Are required to file annual U.S. income tax returns and may be required to file certain information returns if applicable (e.g. Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans; Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts; TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR)).

You must report your worldwide income on your US income tax return if you meet the minimum income filing requirements for your filing status and age.

You must contact the Canadian Government to determine whether you must file a Canadian tax return and pay Canadian taxes – unless you are already filing tax returns here in Canada, then this step is obvious.

You may be able to elect to exclude some or all of your foreign earned income, if certain requirements are met, or to claim a foreign tax credit if Canadian income taxes are paid.

Behind on your filing to the IRS, are you?

The IRS began an open-ended offshore voluntary disclosure program (OVDP) in January 2012, on the heels of strong interest in the 2011 and 2009 programs, which may end at any time.  The intent of this program is to offer people with undisclosed income from offshore accounts another opportunity to get current with their US tax returns.  The 2012 OVDP has a higher penalty rate than the previous program but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk detection by the IRS and possible criminal prosecution.

Rumour has it that in September, the IRS will be releasing some new documents (besides the final regulations) aimed at helping Canadians file their US tax returns up to date – the IRS wants the most recent 3 years and 6 years of FBAR information from Canadians.

My thoughts here are that the IRS thinks all Americans living in Canada are not paying taxes so that anyone with over $1500 owing will still be penalized.  Once these US persons provide proof of their filing of Canadian tax returns at a higher rate, then the best the IRS can get from these residents if valid certifications and by adding them to the database, another potential income source to track.

FAQ Offshore voluntary disclosure program:

http://www.irs.gov/businesses/small/international/article/0,,id=256774,00.html

So if after all this you are unsure if you need to file you might want to seek out an accountant or lawyer which a strong US presence to advise you.  Remember if you are a US person and you let your bank know, they are required under FATCA to notify the IRS.

At the very least you should preapare your US tax returns for the previous 3 years and include the Canadian taxes paid under “foreign tax paid” to see where you fall under FATCA.  Then take them to an accountant with a strong knowledge of US tax in order for them to ensure the US return is correct and have them advise you on where they feel you fall under FATCA.  From there… It’s up to you.

There is no hiding from FATCA, so prepare for now and prepare for the future before the IRS gets to you first.

Did you know the MRQ (Revenu Quebec) has an office in Toronto?

Did you know that The Secrétariat aux Affaires Intergouvernementales Canadiennes had an office in Toronto?  So does Revenu Quebec…

The Secrétariat advises the Government of Québec on all Canadian intergovernmental matters, coordinates Québec government activities in Canada, assures the defence and promotion of Québec’s interests, and collaborates to strengthen links with Canada’s francophone and Acadian communities.

The mandate of this office which opened in 1973, is to promote and safeguard Québec’s interests in Ontario, Manitoba and Nunavut. The head of the Bureau du Québec à Toronto represents the Québec government in its relations with these three governments and is also in charge of Québec’s Vancouver branch office, which is mandated to maintain relations with the governments of British Columbia, Alberta, Saskatchewan, the Yukon and the Northwest Territories.

Contact information

Bureau du Québec à Toronto
20 Queen Street West, Suite 1504
P.O. Box 13
Toronto, Ontario M5H 3S3

Telephone: 416 977-6060
Fax: 416 596-1407
E-mail: bqtoronto@mce.gouv.qc.ca

Head: Paul-Arthur Huot

Intergovernmental and institutional relations

One of the main tasks of the Toronto office is to maintain and develop Québec’s intergovernmental and institutional relations with Ontario, Manitoba and Nunavut and facilitate exchanges with them. To that end, the office plays an active, ongoing liaison role with government and public departments and agencies such as universities, colleges and municipalities.

Economy

The office’s solid market expertise enables it to offer a wide range of economic and commercial consultation services to Québec businesses. It also promotes Québec products. Thus, the office:

  • supports Québec businesses seeking to penetrate the Ontario and Manitoba markets;
  • advises businesses in its territory looking to invest in Québec or market their products there;
  • provides services proper to the regional economic context;
  • bolsters business partnerships.

Culture

The office fosters an ongoing dialogue with the artists of Ontario and Manitoba to promote exchanges and develop a network for disseminating the work of Québec artists. Its activities are also aimed at promoting Québec’s cultural works and informing the people of Ontario and Manitoba on Québec culture.

Francophonie

The Office nurtures privileged ties with the Francophone organizations that are present on the territory it covers, thus fostering exchanges and partnerships between the Francophone representatives of these regions and Québec. It plays an active role in managing the programs arising out of the Québec Policy on the Canadian Francophonie, and in monitoring the various cooperation agreements.

E-mail: bqtoronto@mce.gouv.qc.ca

In the “Francophonie” section of its Website, the Secrétariat aux affaires intergouvernementales canadiennes offers useful information concerning the policy’s implementation and available financial assistance pursuant to the policy

Communications and public affairs

The Toronto office represents and promotes Québec. It informs Québec government authorities of the major political and economic issues in its territory. Hence, it:

  • provides information and documentation on Québec;
  • maintains relations with the national press;
  • makes a daily survey of major events in its territory;
  • informs Québec government authorities of, and advises them on, the major political, economic and social issues in Ontario and Manitoba.

 

UPDATE:

Taxation

The ministère du Revenu du Québec (or MRQ) has a team of tax specialists in Toronto who USED to be located in the Bureau du Québec à Toronto, to carry out the necessary verifications concerning Canadian firms that do business in Québec, however, they have moved!

The new Toronto office offers taxpayers and agents a tax information telephone service. It also makes available a complete inventory of tax forms.

As of December 2014, their office moved, and is now located at:

400 University Avenue, Suite 1500.

Toronto, ON M5G 1S7

 

Documents may be dropped off at this address between 8 am – 12 pm, and 1 -4 pm.

There is a drop box!

The new telephone number for Revenu Québec in Toronto is: 416.645.8770 x 645 4000

The new office sent me a note to update the information – and I thank them – but they state that with the awesome Clic Revenue Service they offer online, it is very rare that the general public would need to contact them.  I agree.

Ms. Nicole Lemieux is now the Chief Representative.

The MRQ office email: saic-bqtrev@mce.gouv.qc.ca

 

For further information on the Bureau du Québec à Toronto, feel free to contact the office’s personnel.

E-mail: bqtoronto@mce.gouv.qc.ca

http://www.saic.gouv.qc.ca/bureauduquebec/bureau_quebec_toronto_en.htm

Now that’s service!

Mutual Funds Tax Considerations – IRS

So what exactly is a capital gain?

There can be two sources of capital gains for a mutual fund shareholder: 1) Gains from Sales: If you sell or exchange your mutual fund shares, you must pay tax on any gains arising from the sale, just as you would from a sale of individual securities. Shares that are held one year or less are considered short-term and are taxable at the shareholder’s income tax rate. Shares held for more than 12 months are considered long-term and taxable at a reduced rate.
Tax Reporting: Redemptions of mutual fund shares are reported to you on Form 1099-B. Remember that redemptions from municipal bond funds are taxable transactions.
Gains from Distributions – Capital gains realized by the fund on sales of its portfolio securities are “passed through” to shareholders as distributions. These amounts are reported to you by the fund on Form 1099-DIV. Short-term capital gains are included in Box 1a of Form 1099-DIV. Long-term capital gains are identified on Form 1099-DIV, Box 2a.

Now for some Q&A.

Q: Why would I have to pay tax on a capital gain distribution when my fund’s share price has decreased?
A: Capital gain distributions occur independently of price fluctuations in a fund. A mutual fund is required to distribute annual income and/or capital gains to its shareholders. At the same time, changes in financial markets can cause the price of fund shares to go up or down.

Q: Do I pay taxes on reinvested dividends like a DRIP program?
A: Yes, DRIP’s are taxed the same as cash distributions.

Q: How do I report international fund tax information on my tax return?
A: You may be entitled to take either a foreign tax credit or an itemized deduction for the amount of the foreign taxes paid, as reported in IRS Form 1099-DIV, box 6. It is usually more advantageous for you to take the foreign tax credit. To file for the allowable credit, you may be required to complete IRS Form 1116 and attach it to your IRS Form 1040. (Please refer to IRS Form 1040 instructions for exceptions from filing IRS Form 1116 to claim a tax credit.) If you are required to file Form 1116, please refer to the Source of Foreign Gross Income and Taxes Paid table

Use the Foreign Gross Income and Taxes Paid table only if you are required to complete IRS Form 1116 to claim a credit for foreign taxes paid. To compute the per-country gross income for Form 1116, apply the gross income percentage from the table to the amount in box 1a of your IRS Form 1099-DIV. To compute the per-country tax paid for Form 1116, apply the foreign taxes paid percentage to the amount shown in box 6 of your IRS Form 1099-DIV.

Q: I’ve redeemed shares from my account. What do I need to know about calculating my cost basis?
A: First, chose one of the four methods, keep these key points in mind:

You must state on your tax return the cost basis method you have selected.
When no method is stated, the IRS presumes you are using the First-In, First-Out (FIFO) method.
No matter which cost basis method you choose, you may not change to another method without permission from the IRS.
Reinvested dividends or capital gain distributions add to the cost basis of your shares. These dividends purchase shares. Your confirmation statements show you the number of shares purchased and the price of those shares.
Return of capital gain distributions reduces the cost basis of your shares. If the fund distributes a return of capital, it will report this amount to you in Box 3 of Form 1099-DIV at the end of the year.
The average cost methods are available only for mutual funds. They are not acceptable for sales of other investments, such as individual stocks and bonds. Different methods may be used for different funds. However, you must use the same method for the life of the fund.
Transfers of shares due to gifts or inheritance may require different basis calculations. In these situations, please consult your tax advisor before using this cost basis statement.
If you sell shares at a loss and purchased shares in the same fund within 30 days before or after the sale, the IRS considers it a “wash sale” transaction and the loss must be deferred for tax purposes. The rules for wash sales can be very complex. It is recommended that you consult a tax advisor if you suspect you are in this situation.