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Jeffrey Pomerantz, a Vancouver-area resident with dual Canadian-U.S citizenship had been sued for the amount equivalent of $1.1 million Cdn by The U.S. Justice Department for failing to file a form listing his bank accounts outside the United States to the U.S. government, media reports said.
Pomerantz, who had filed his income tax returns to the Internal Revenue Service (IRS) and Canada Revenue Agency (CRA) during the calendar year 2007, 2008 or 2009, failed to file Report of Foreign Bank and Financial Accounts (FBAR).
Pomerantz was also accused of not filing a Treasury Form TD F 90-22.1 ("FBAR") for three years in question to disclose about his foreign accounts, said Paul Butler Department of Justice lawyer.
Pomerantz had different accounts in different countries namely Canada, U.S. and Switzerland about which he had not filed a FBAR form declaring these accounts out of U.S.
His statements regarding his stay in a country also differed with authority records.
Many errors and omissions were found in Pomerantz's filings to the IRS or the U.S. government.
But his lawyer said that Pomerantz had prepared is own tax returns and his mistakes were unintentional and should not be considered as fraud.
According to Toronto lawyer Hari Nesathurai, cases of U.S. government pursuing Canadian residents who haven't filed FBAR reports over the past couple of years had increased.
The information-sharing deal following the adoption of the Foreign Account Tax Compliance Act (FATCA) in the U.S. had been negotiated by Former Prime Minister Stephen Harper's government.
The agreement under which CRA had transferred information about thousands of Canadian bank accounts belonging to Canadian residents believed to qualify as U.S. persons under American tax law is being challenged in Federal Court.
Transfer of Canadian banking records to U.S. agency doubled last year which could result in U.S. authorities pursuing more Canadian residents for not filing FBAR reports.
Many of them may be U.S. citizens, dual citizens and others may be born in the U.S. or stay there long enough to be subject to U.S. taxes.
(Reporting by Asha Bajaj)