PREP Podcaster - ”Success Favours The PREPared Mind”

July 24, 2026 - A Podcast Based On A July 17, 2025 John Richardson Presentation About Canada's Bill C-3

Canada's Bill C-3 became law on December 15, 2025. The Bill clarifies who - if born outside of Canada to a Canadian citizen parent IS a Canadian citizen. Note that this is NOT a fast track to naturalization.

About Canadian citizenship:

1. Those born in Canada or naturalized as Canadian citizens ARE Canadian citizens.

2. Those born outside of Canada to a parent who was either born in Canada or naturalized is a Canadian citizen IS a Canadian citizen.

3. Those born outside of Canadian to a Canadian citizen parent who was born outside of Canada to a "first generation Canadian" IS a Canadian citizen.

4. Those born outside of Canada to A Canadian citizen parent who was a "second generation Canadian" is based on whether you were born before December 15, 2025 or after December 15, 2025:

- If born before December 15, 2025 you ARE a Canadian citizen if your parent, grand parent, great grand parent, etc. was a Canadian citizen;

- If born after December 15, 2025 you ARE a Canadian citizen if your parent,  was a Canadian when you were born and had 1095 days of physical presence in Canada before your birth.

"First generation Canadian" = A Canadian citizen who was born outside of Canada to to a Canadian citizen who was born outside of Canada to a parent who was born or naturalized in Canada.

"Second generation Canadian" = A Canadian citizen was was born outside of Canada to a Canadian citizen who was born outside of Canada to a Canadian citizen parent who was born outside of Canada to a parent who was also born outside of Canada.

 

Sound confusing? This is explained in the podcast.

 

"This podcast examines the significant legal shifts introduced by Canada’s Bill C-3, which restores and expands citizenship by descent for individuals born abroad. The legislation is presented as a vital tool for U.S. citizens to achieve dual nationality, potentially allowing them to navigate restrictive tax regimes and secure mobility rights. Beyond the legal definitions of birthright and naturalization, the source details the practical benefits of Canadian status, including universal healthcare and simplified entry into the United Kingdom. However, obtaining a citizenship certificate requires rigorous documentation and a clear ancestral lineage to prove eligibility under the new rules. For those who qualify, the author frames this status as a valuable family legacy that facilitates residency in Canada without the need for a traditional retirement visa. While the bill offers many advantages, the text also notes the process for renunciation for those who wish to avoid the obligations of dual citizenship."

July 31, 2026 - PFIC Odyssey Part 2

 

The explanatory text of the 1986 PFIC rules is found here:

 

https://citizenshipsolutions.ca/wp-content/uploads/2023/12/jcs-10-87-PFIC-section.pdf

 

https://citizenshipsolutions.ca/2023/12/19/general-explanation-of-the-1986-tax-reform-act-pfic-edition/

 

AI Generated:

 

"This episode is a deep dive into PFICs (Passive Foreign Investment Companies) and how a technical area of U.S. tax law can unexpectedly punish everyday investors, heirs, startups, and new immigrants. It explains what triggers PFIC status, the punitive Section 1291 default, alternative elections like QEF and mark-to-market, and real-life examples of how the rules can devastate savings.

The episode also reviews proposed reforms from Monica Gianni’s "PFICs Gone Wild" — practical fixes to protect legitimate businesses and modern investors — and leaves listeners with a warning about the unseen risks of global investing today."

Thoughts:

The "Microsoft" example is compelling. It's okay for deferral to take place as long as it is NOT within a foreign corporation. But, those investing outside the USA will pay the price!

 

 

July 30, 2026 - The PFIC At Age 40 - What were the PFIC rules understood in 1986?

 

The explanatory text of the 1986 PFIC rules is found here:

 

https://citizenshipsolutions.ca/wp-content/uploads/2023/12/jcs-10-87-PFIC-section.pdf

 

https://citizenshipsolutions.ca/2023/12/19/general-explanation-of-the-1986-tax-reform-act-pfic-edition/

 

The podcast is based on the description in 1986 of what Congress was intending to do. This is a great help in understanding the PFIC regime as the rules are described in the Internal Revenue Code which is described as:

"Interest On Tax Deferral"

https://www.law.cornell.edu/uscode/text/26/1291

 

AI generated description of this podcast:

"This episode explains how the Tax Reform Act of 1986 created the Passive Foreign Investment Company (PFIC) rules to stop U.S. investors from using offshore funds to defer taxes. It covers the income and asset tests that replaced ownership thresholds, and why lawmakers built severe penalties to neutralize offshore tax advantages.

It also outlines the enforcement mechanics — the throwback tax and interest charges — and the voluntary Qualified Electing Fund (QEF) alternative that forces current taxation. Finally, it discusses the law's broad reach and why ordinary investors today can accidentally trigger these complex rules."

Of course in 2026 it's clear that the PFIC rules make retirement planning for Americans abroad exceedingly difficult.

July 21, 2026 - Participants include:

 

Dan Hughes - @RadikalHughes

 

John Richardson - @ExpatriationLaw

 

 

Host John Richardson speaks with Dan Hughes about Canada’s Bill C-3 and Dan’s personal journey discovering he may be a Canadian by descent. Dan describes how he found his Canadian ancestors on Ancestry.com, hired a genealogist, and traveled across Michigan to collect certified birth, marriage and death records to prove his claim to the Immigration, Refugees and Citizenship Canada (IRCC).

The episode explains the step-by-step proof process (primary and secondary documents, census and baptismal records), the urgency around filing due to application backlogs and possible legal changes, and the implications for future generations and family identity.

July 18, 2026

 

This podcast was motivated by a comment on X by a U.S. immigration lawyer who commented that his Canadian clients rarely consider the applicability of Canada's "Departure Tax". Canada actually pioneered the concept of the modern Exit/Departure Tax. Although Canada did NOT have the first version of taxes imposed on emigration, Canada's 1996 tax found in S. 128.1 of the Income Tax Act was unquestionably the first of the modern broad departure tax covering a wide range of assets. Interestingly in 1996 the United States considered enacting what would in 2008 become the 877A tax but decided against it. Interestingly the reality of Canada's 1996 Departure Tax (which could result in double taxation) is addressed in paragraph 7 of Article XIII of the Canada/U.S. tax treaty and reads:

 

"7. Where at any time an individual is treated for the purposes of taxation by a Contracting State as having alienated a property and is taxed in that State by reason thereof, the individual may elect to be treated for the purposes of taxation in the other Contracting State, in the year that includes that time and all subsequent years, as if the individual had, immediately before that time, sold and repurchased the property for an amount equal to its fair market value at that time."

 

https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/united-states-america-convention-consolidated-1980-1983-1984-1995-1997-2007.html

 

(This provision of the treaty appears to reflect OECD tax treaty commentary governing departure taxes.)

 

In any event ...

 

The history of Canada's Departure Tax is fascinating. The history demonstrates how a government response to the conduct of one wealthy person or corporation can lead to legislation destroying the lives and opportunities of the average or middle class person.

 

For a description of how Canada's current departure tax works, see this post that I wrote a number of years ago:

 

https://ustaxationabroad.ca/2013/07/31/canadas-departure-tax-vs-the-us-expatriation-tax/

 

Here is an AI generated podcast describing these issues.

 

"The provided sources detail the historical and legislative origins of Canada's departure tax, specifically the deemed disposition rules under Section 128.1 of the Income Tax Act. The text identifies the Irving family of New Brunswick as the primary catalyst for these laws, noting how patriarch K.C. Irving moved to Bermuda in 1971 to shield his multibillion-dollar empire from the introduction of capital gains taxes. Journalists like Jacques Poitras have documented how the family utilized offshore trusts and captive insurance companies to move wealth out of the Canadian tax net. In response to these high-profile tax avoidance strategies, the federal government enacted a major legislative overhaul in 1996 to close loopholes related to international tax treaties. Today, the system functions as a "last shot" for Canada to tax accrued gains on global assets before a resident departs. These measures ensure that wealth generated within the country is subject to domestic taxation regardless of the owner's future residency."

July 17, 2026 - Participants include:

Virginia La Torre Jeker - @VLJeker

John Richardson - @ExpatriationLaw

 

On June 30, 2026 the IRS removed the "Delinquent FBAR Submission Procedures" from its site. This ended the "FBAR Safe Harbour" that allowed for the (possible) filing of lates FBARs without penalty. This was discussed in the following two blog posts by John Richardson and Virginia La Torre Jeker.

https://citizenshipsolutions.ca/2026/07/02/irs-ends-delinquent-fbar-submission-procedures-leaving-no-guaranteed-penalty-free-option/

https://www.forbes.com/sites/virginialatorrejeker/2026/07/02/irs-quietly-ends-penalty-free-fbar-filing-procedure-whats-next/

In addition we did an initial podcast on July 2, 2026 giving our initial impressions.

https://prep.podbean.com/e/irs-removes-delinquent-fbar-safe-harbor-%e2%80%94-what-it-means-for-americans-abroad/

 

___________________________

 

Today, on July 17, 2026 Virginia and John shared our additional thoughts in this podcast. This podcast -as a follow up - is Part 2.

 

"John Richardson speaks with U.S. tax lawyer Virginia La Torre Jaker about the IRS decision to archive the delinquent FBAR submission procedures. They discuss how the removal eliminates a previously reliable safe harbor, shifting reliance to the harder-to-prove "reasonable cause" defense, and what that means for taxpayers, preparers, and costs.

The episode explains the practical differences between the old procedure and reasonable cause, the limits of relying on professional advice, and advice for taxpayers and preparers on handling late FBARs going forward."

July 6, 2026 - AI generated from the following two sources:

Current reality:

https://citizenshipsolutions.ca/2019/03/12/the-united-states-imposes-a-separate-and-more-punitive-tax-system-on-us-dual-citizens-who-live-in-their-country-of-second-citizenship/

 

1776 - The origins of America:

 

https://web.archive.org/web/20260703132439/https://apps.bostonglobe.com/2026/07/storylab/250th-anniversary-boston/#independence-declared#independence-declared

 

Many people have suggested that the taxation of Americans abroad is incompatible with the historical origins of the United States. Some call the taxation of Americans abroad "Taxation Without Representation". Whether true or not, it's clear that in 1776 the Colonists were dealing with the extraterritorial application of British laws. In 2026, Americans abroad (including those who are dual citizens) are living with the extraterritorial application of American extraterritorial laws.

 

The following podcast was generated from the above two sources which are separated in time by 250 years.

 

What follows is an ai generated description of the podcast created from the two sources.

 

"The provided source details how the United States tax system uniquely penalizes dual citizens and expatriates by taxing their worldwide income regardless of where they reside. Unlike most nations, the U.S. enforces citizenship-based taxation, which often subjects those living abroad to double taxation and complex compliance requirements that do not apply to domestic residents. This legal framework creates significant financial hurdles for retirement planning and the management of foreign assets, which the IRS views through a more punitive lens. The text argues that these policies constitute a form of discrimination, as expatriates face higher effective tax rates and aggressive reporting penalties for simply holding local accounts in their home countries. Consequently, many individuals, including accidental Americans with no functional ties to the U.S., feel compelled to renounce their citizenship to escape these administrative and financial burdens. Advocacy groups and specific legislative efforts are highlighted as potential avenues for reform to address these extra-territorial tax injustices."

 

July 2, 2026 - Participants include:

 

Virginia La Torre Jeker - @VLJeker

 

John Richardson - @ExpatriationLaw

 

On June 30, 2026 the IRS removed its "Delinquent FBAR Submission Procedures" page, ending the informal (guaranteed) penalty-free route for taxpayers who had only failed to file FBARs but otherwise reported and paid U.S. tax on foreign-account income.

The change means taxpayers now face the penalty authority (not a mandate) found at 31 U.S.C. 5321 and examiner discretion found in the Internal Revenue Manual.  FBAR penalties are not automatic, but the safe-harbor promise found in the "Delinquent FBAR Submission Procedure" is gone, increasing uncertainty and the need for careful compliance and professional advice.

Virginia La Torre Jeker and John Richardson discuss the possible implications of this change.

June 10, 2026 - Podcast generated from this post at the IsaacBrockSociety.ca

https://isaacbrocksociety.ca/2026/06/09/tracking-income-in-your-tfsa-isa-or-other-account-that-is-not-taxable-in-your-country-of-residence/

______________________________________________

 

AI generated podcast and description:

 

"Tax Tracking Strategies for U.S. Citizens with Foreign Accounts

1 source·Jun 10, 2026

 

American citizens residing abroad often face punitive tax obligations because the United States taxes global income, including earnings from foreign accounts like the Canadian TFSA or British ISA. Although these accounts are tax-exempt in their home countries, the IRS generally views them as taxable, creating significant compliance hurdles and potential double taxation. Legal expert John Richardson advises expatriates to proactively track annual income within these accounts, as financial institutions rarely provide the specific documentation required for U.S. filings. Maintaining these records is essential for those currently filing, as well as for non-filers who may eventually need to formalize their tax status or renounce their citizenship. Furthermore, there is a growing call for diplomatic pressure to harmonize tax treaties so that foreign tax-advantaged accounts receive the same favorable treatment as American Roth IRAs. Ultimately, diligent record-keeping serves as a vital safeguard against the complexities and costs of navigating the international tax system."

 

June 7, 2026 - More on Mr. FBAR

 

Podcast based on an old Phil Hodgen post from 2012 - Note how little has changed!

 

https://web.archive.org/web/20130813183109/https://hodgen.com/what-hath-god-wrought-fbar-edition/

 

AI generated

"This source criticizes the aggressive enforcement of U.S. international tax laws, specifically focusing on the Foreign Bank Account Report (FBAR) and its impact on dual citizens living abroad. The author argues that federal agencies often ignore the unintended consequences of draconian penalties, which frequently penalize ordinary individuals who have no functional connection to the United States. By highlighting a specific case of a Canadian resident, the text illustrates how citizenship-based taxation can lead to significant psychological and financial distress for those caught in the regulatory "meat grinder." Commenters within the text further suggest that these policies represent a form of fiscal imperialism that contradicts fundamental human rights regarding movement and residency. Ultimately, the article serves as a plea for the IRS and Treasury Department to exercise more discretion and empathy rather than relying on intimidation tactics."