How we help
- Substantial-presence-test calculation (the 31/183 day formula)
- Form 8840 closer-connection statement preparation
- Treaty Article IV residency tie-breaker analysis
- Canadian-residency consequences of US-side filings
- Florida domicile / non-resident filing positions
- Estate-tax exposure review for snowbirds with US real estate
The substantial-presence test
The IRS treats a non-citizen as a US resident for tax purposes if they meet the substantial-presence test (SPT). The SPT counts: all days of US presence in the current year, plus one-third of US presence in the previous year, plus one-sixth of US presence in the year before that. If the total reaches 183 or more (and the individual is present at least 31 days in the current year), the SPT is met and the IRS treats the individual as a US resident.
For a typical snowbird who spends six months in Florida every year, the formula reaches 183 days easily. Without a counter-position, that snowbird would be a US tax resident — liable for US tax on worldwide income, with all of the consequences (FBAR, Form 8938, US-situs estate-tax exposure on the entire net worth, etc.).
Form 8840 — the closer-connection statement
The first line of defence is Form 8840, the Closer Connection Exception Statement for Aliens. It is available to a non-US-citizen who: (1) was present in the US for fewer than 183 days in the current year; (2) maintained a tax home in a foreign country during the current year; and (3) had a closer connection to that foreign country than to the US during the current year. "Closer connection" is a multi-factor test (location of permanent home, family, vehicles, social ties, banking, voter registration, driver's licence, club memberships).
Form 8840 must be filed by the due date of the US return for the year in question (June 15 for non-residents) — late or unfiled forms invite the IRS to reject the closer-connection claim, even if the underlying facts support it.
Treaty tie-breaker — Article IV
If the snowbird's US presence exceeds 183 days in the current year, the closer-connection statement is unavailable and the SPT is met. The next line of defence is Article IV of the Canada-US Income Tax Convention, which "tie-breaks" dual residency by reference to (in order): permanent home available; centre of vital interests; habitual abode; citizenship. A Canadian snowbird who maintains a Canadian permanent home, has stronger Canadian centre-of-vital-interests ties, and is a Canadian citizen will almost always tie-break to Canada.
Asserting the treaty tie-breaker requires filing Form 1040-NR with Form 8833 (Treaty-Based Return Position Disclosure). The position is annual and must be supported by the facts each year.
The estate-tax overlay
Snowbirds who buy Florida or Arizona property accumulate US-situs assets quickly. Even where the substantial-presence test is defeated and the snowbird files no US income-tax return, US estate tax can still apply at death on the US real estate, the US-corporation shares, and the tangible personalty kept at the US residence. We cover this on the US Estate Tax for Canadians page.
How we work the file
For living snowbirds, we calculate annual presence days, prepare Form 8840 each year (or Form 1040-NR + 8833 if the SPT is met), and review for estate-tax exposure on US-situs holdings. For snowbirds who haven't filed for several years and have just realized they may be in the wrong place, the Streamlined Foreign Offshore Procedures often offer a path to compliance without civil penalty.
What to expect when you call us
Your first call is a free, no-obligation consultation with a tax lawyer. We will review the details of your situation, explain your options under the Income Tax Act and CRA administrative practice, and give you a clear, fixed-fee quote if you choose to retain us. Your consultation is confidential, and once we are retained, communications are protected by solicitor–client privilege.
If you retain us, we begin work within 24 hours of being retained.
Frequently asked questions
Is the consultation really free?
Yes. Most cases qualify for a free, no-obligation consultation with one of our tax lawyers. During the call we'll review your situation, explain your options, and give you a clear quote if you decide to retain us.
What does a tax lawyer do that an accountant does not?
A tax lawyer focuses on the legal side of tax — disputes, litigation, and the structuring of transactions in light of the law and anti-avoidance rules. That includes representing taxpayers in CRA audits and objections, appearing at the Tax Court of Canada, defending penalties and director or derivative liability, and designing reorganizations such as section 85 rollovers and estate freezes.
The most practical distinction is privilege. Communications with a lawyer are generally protected by solicitor-client privilege, while communications with an accountant generally are not and can be demanded by the CRA. Where the facts are sensitive or the matter could become contentious, that protection matters.
Lawyers and accountants often work together — the accountant on the numbers and filings, the lawyer on strategy, privilege, and the legal record. Barrett Tax Law regularly coordinates with a client's existing accountant.
Do you serve all of Canada?
Yes. Barrett Tax Law represents clients across Canada. We have offices and local phone lines in Toronto, Calgary, Edmonton, Fort McMurray, Ottawa, Vancouver, and Winnipeg, plus a national toll-free line at 1-877-882-9829.
Who is Barrett Tax Law and what areas does the firm handle?
Barrett Tax Law is a Canadian boutique tax law firm that represents individuals and businesses in their dealings with the Canada Revenue Agency. The firm's work spans CRA audits and disputes, voluntary disclosures, Tax Court of Canada litigation, collections matters, and corporate and estate tax planning.
The firm was founded in 2009 and has represented many thousands of clients across Canada. Its head office is in Concord, Ontario (Vaughan), and it serves clients nationwide. You can reach the firm toll-free at 1-877-882-9829 (1-877-8-TAXTAX).
Most matters qualify for a free, no-obligation consultation, and most are quoted on a fixed-fee basis once scope is understood, so the cost is known before work begins.
What does a tax lawyer do that an accountant cannot?
Accountants prepare returns and financial statements. Tax lawyers represent you when those returns are challenged, audited, or prosecuted — and our communications are protected by solicitor–client privilege, which accountant communications generally are not.
What should I do if I receive a letter from the CRA?
First, identify what the letter is and what it requires. A CRA letter may open an audit, ask for documents, propose adjustments (a proposal letter), confirm a reassessment, or start collection action — and each carries its own deadline and its own implications. Note any date by which a response is required.
Do not ignore it, and be careful about responding off the cuff. What you say and produce can shape your later objection and appeal position, and casual admissions can be difficult to undo. If the letter proposes adjustments or penalties, or if significant amounts are involved, get advice before responding.
A free consultation can help you understand the letter, the deadline, and the right next step. Acting early — while options are still open — is usually far better than waiting until a deadline is near.
Will the CRA criminally prosecute me?
Most CRA disputes are civil. Criminal prosecution is reserved for serious tax evasion or fraud, usually involving deliberate misrepresentation. If you have unreported income, a voluntary disclosure is one of the standard ways to reduce criminal-prosecution risk.
Is the first consultation really free?
Yes. Most matters qualify for a free, no-obligation consultation with an experienced tax lawyer. The consultation is a chance to describe your situation, get a clear sense of the options and likely path, and receive a fee structure in writing before you commit to anything.
You can reach the firm toll-free at 1-877-882-9829 (1-877-8-TAXTAX) to arrange a confidential consultation. The head office is in Concord, Ontario (Vaughan), and the firm serves clients across Canada.
Are my communications with a tax lawyer confidential?
Yes. Communications between you and your lawyer for the purpose of obtaining legal advice are generally protected by solicitor-client privilege, one of the most strongly protected confidences in Canadian law. In practical terms, the CRA generally cannot compel disclosure of privileged communications.
This is an important difference from working with an accountant or other non-lawyer representative, whose communications and working papers can generally be demanded by the CRA. Where the facts are sensitive — unreported income, offshore assets, or potential penalties — that protection can be significant.
Privilege has limits and can be waived inadvertently, so it should be handled with care. A consultation can explain how privilege applies to your particular situation.
How fast can you start on my case?
We typically begin work within 24 hours of being retained. For audit deadlines, Notices of Objection, and other time-sensitive matters, we move immediately.
What if I have unfiled tax returns from many years ago?
We routinely handle 5+ years of unfiled returns. Through the Voluntary Disclosures Program — applied for before the CRA contacts you — we can usually eliminate gross-negligence penalties and limit interest exposure.