Flaherty tells U.S. to back off pressure on cross-border tax cheats

OTTAWA – Finance Minister Jim Flaherty says the U.S. is unfairly targeting innocent Canadian citizens in its effort to catch offshore tax cheats.

The minister writes in a letter to three of the biggest U.S. newspapers that the tactics of the Internal Revenues Service is causing stress and fear among Canadians with dual U.S. citizenship.

He says dual citizens and their relatives, many with distant links to the U.S., are being asked to file a return to the IRS even if they pay taxes in Canada.

As well, a new tax law compels Canadian banks to notify the IRS of accounts by U.S. citizens.

He says the dual citizens affected are not high rollers with offshore accounts and are not tax cheats.