A wealth management company for physicans asks: Are you a U.S. person?

MD Physician Services makes it clear that:

“It is important for clients to be aware that MD is legally obligated to report to CRA (who will notify the IRS) all clients who refuse to disclose whether they are a U.S. person. Clients should also know that conversations with their MD Advisor on this matter are not privileged.

Serious penalties for non-filing may apply even for those who are unknowingly non-compliant about their reporting obligations. The penalties for wilful non-compliance can be severe, including imprisonment.”

The complete article follows:

Client Notice: Are You a U.S. Person?

September 23, 2014

Important Tax Changes May Apply to MD Clients Who Are U.S. Persons

MD Physician Services Inc. (MD), a Canadian Medical Association (CMA)-owned financial services organization, today advised that, as a result of an intergovernmental agreement signed between Canada and the United States, MD—along with all Canadian financial institutions—is required to report clients with U.S. status (known as “U.S. persons”) to the Canada Revenue Agency (CRA).

U.S. persons include citizens of the United States (including dual Canadian-American citizens), U.S. Green Card holders (regardless of country of residence) and U.S. residents, or Deemed Residents, regardless of citizenship.

Answering “yes” to any of the following questions may indicate someone is a U.S. person:

Were you born or were you naturalized in the United States?
Were you born to a parent who is a U.S. citizen?
Do you reside in the United States or do you visit for an extended period?
Are you, or have you ever been, a Green Card holder?
A Green Card holder may be considered a U.S. person if they never surrendered their card upon returning to live in Canada. They may still be considered a U.S. person even if their Green Card has expired.

It is important for clients to be aware that MD is legally obligated to report to CRA (who will notify the IRS) all clients who refuse to disclose whether they are a U.S. person. Clients should also know that conversations with their MD Advisor on this matter are not privileged.

Serious penalties for non-filing may apply even for those who are unknowingly non-compliant about their reporting obligations. The penalties for wilful non-compliance can be severe, including imprisonment.

Filing and reporting obligations for U.S. persons exist whether or not any tax—including income, estate, gift or generation-skipping transfer tax—is owed to the United States and even if Canadian tax has always been paid. Filing may reveal that tax is owed, with potential ramifications for late payment. Where a U.S. person lives or works in the world, or where their assets are located, does not alter their reporting obligations.

If a client believes they may be a U.S. person, MD recommends that they immediately consult a U.S.-licensed attorney—with whom a client’s conversation will be privileged—with expertise in tax and/or immigration to better understand what it may mean for the client and their family. Employees of the MD group of companies are not U.S.-licensed or permitted to make any determination of a client’s U.S. status or filing obligations.

A U.S.-licensed professional with this specific expertise is often required to make an accurate determination of whether someone is subject to the U.S. tax system and associated filing obligations. A U.S.-qualified accountant may also be involved in the preparation and filing of tax and information returns.

If an MD client does not already have access to a qualified lawyer or accountant, MD can assist by providing a list of independent legal and tax experts. Clients may contact their MD Advisor to obtain a copy of MD’s U.S. persons referrals list.

About MD Physician Services

MD Physician Services, with more than $38 billion in assets under administration, is a wholly-owned subsidiary of the Canadian Medical Association. MD is dedicated to serving physicians and their families. MD Physician Services provides financial products and services, the MD family of mutual funds and private investment counselling services through the MD Group of companies. For a detailed list of these companies, visit md.cma.ca.

Media Contacts:

Maria Grant
Communications Manager, MD Physician Services Inc.
maria.grant@cma.ca
613-809-0657

Deborah Thompson
DT Communications
deborah@dt-communications.com
416-918-9551