Dale Jackson

Personal Finance Columnist, Payback Time

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Your bank and government could be secretly sharing your personal information with a foreign government.

It may sound like a spy thriller but it could be real-life for Canadian snowbirds who spend winters in the United States. The information exchange is permitted under the 2014 Foreign Account Tax Compliance Act (FATCA) between Canada and the U.S.

NDP revenue critic Pierre-Luc Dusseault and Canada's Privacy Commissioner both say the Canada Revenue Agency should notify Canadian residents when their bank account information is shared with the U.S. Internal Revenue Service.

The Canadian government says it is the responsibility of individual banks to let clients know if information relating to their bank accounts might be transferred.

The information exchange is an attempt for both governments to ensure snowbirds don’t fall between the cracks and dodge taxes. The agreement attempts to determine which side of the border they fall on for tax purposes through a “substantial presence” formula put forward for the IRS.

If snowbirds spend more than 183 days in the U.S. - based on a complex formula that encompasses three consecutive years - they could be considered a substantial presence in the U.S. and be forced to pay taxes to the IRS.

Here is the type of information snowbirds could be required to disclose to the U.S. government:

• Location of permanent home
• Family members
• Personal belongings
• Social, political, cultural or religious affiliations
• Business activities
• Driver's license
• Where you vote

The consequences for snowbirds who don’t comply could be severe, including loss off health care coverage in your home province, taxes on both sides of the border and even being declared an illegal alien.