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Canadian skippers doing the GREAT LOOP face challenges when cruising in United States inland waters. The IRS (the American Internal Revenue Service) wants to know about you, and wants you to show them that you have a closer connection to Canada than to the US. If you do not file the required 8840 forms, then the IRS has the right to request you to file an actual US tax return. You don’t want that because you are subject to US tax on your worldwide earnings. First, you have to do a three-year calculation that determines whether or not you have a “substantial presence” in the US, based on the IRS rules. What most Canadians don’t realize is that when they visit the US, they are travelling on a visitor’s visa, and they are there by permission of the US government. If a person stays there 121 days and does that for three years in a row, then that person has established a “substantial presence” in the US, and should therefore be taxed as an American, unless that person has a “closer connection” to another country, like Canada. The IRS and Border Service are becoming more closely connected themselves, so it is best to comply voluntarily, before they ask... There is an Action plan named “Beyond the Border” is jointly implemented by the Customs Agency and Border Protection, Citizenship and Immigration Canada and the Agency of Canada Border Services Agency (CBSA) so integrate data from all the people who cross the border entry, North or South. Until now, U.S. border agents could you check in the United States, but they had little unified way of knowing when you are returned to the country. Therefore, a pilot system tracking has been tested at the busiest border crossing to see if it was possible to obtain reliable data. As of June 30, 2014, the input / output program will be implemented in full. U.S. border agents and Canadian Border agents to share information on Canadians traveling south. They exchange data and create a profile entry / exit exacts your travels. People with such a “closer connection” are provided an exemption from filing a full US tax return if they file Form 8840 on time. However, failure to file can result in denial of the exemption, and the resulting requirement to file a US return. Vessels more than 30 feet (9.144 meters) must display a DECAL from Decal and Transponder Online procurement (25$ USD) each year. CBP has implemented the Small Vessel Reporting System (SVRS). It is a free, easy-to-use, voluntary program that we enrolled for online. We had to meet a CBP officer with our boat registration and passport. We obtained our (BR Number) Boater Registration Number. Cruising licenses (Valid up to 365 consécutive days or one year)are compulsery and FREE as they exempt Canadian pleasure boats from having to undergo formal entry and clearance procedures such as filing manifests and obtaining permits to proceed as well as from the payment of tonnage tax and entry and clearance fees **at all** but the first port of entry. Before leaving Lake Champlain, NY. we had obtained our cruising license from Rouses Point U.S. Customs and Border Protection (CBP) Port of entry. SVRS enabled us to report quickly and easily to CBP. Important Note: When our Canadian vessel left Lake Champlain at Whitehall, the Master shall have a Cruising license and shall report to a Call 1 (800) 432-1216 or 1 (800) 451-0393 its location when anchored or at a different port of call. We reported 37 times during cruised in Cape Cod during summer 2012. We got used to it and the morning after the 37th reported call, we were boarded just before Albany, NY on our return trip. Everything was OK and they were courteous and very professional. Please note the following amendment received from Dennis McMurtry on 7th April 2009: QUOTE The requirement for reporting movement only applies to vessels moving from one customs reqion to another, i.e.from Ft Lauderdale to Miami, Miami to Ft Myers or Key WEST ETC. Verified by official who issued annual cruising permit from Ft Lauderdale office. Original Report Published: February 4, 2008 The situation described below will be a real burden for all foreign flagged vessels cruising in USA waters. Our thanks to Captain Brenda Matzner for researching this developing situation, and allowing me to paraphrase our telephone conversastion! The long and short of this is, that if you are from any foreign country, including Canada, and your vessel is flagged in that country, YOU MUST NOTIFY US CUSTOMS - HOMELAND SECURITY EVEN IF YOU SIMPLY MOVE YOUR VESSEL FROM ONE MARINA TO ANOTHER, IN THE SAME PORT OF CALL! Otherwise, you might just be slapped with a $5,000.00 fine! Note that this requirement does NOT apply to US flagged vessels! Today, I called Maria (954-761-2034) at the office of US Customs and Homeland Security in Port Everglades [Fort Lauderdale], and got a clarification of the requirements for foreign flagged vessels to announce their movement from one port or call, or one berth, to another. Recently, I had a buddie who was recently hit with this rule, and suffered a $5,000.00 fine in Jacksonville. Even if a foreign flagged vessel, including those from Canada, have entered the USA legally, and cleared customs properly, THEY MUST NOTIFY US CUSTOMS - HOMELAND SECURITY if they move their vessel from one place to another. Officer Maria said that even if the vessel is moved just from Port Everglades to Miami, for example, or even from the city of Fort Lauderdale berths on New River to Bahia Mar, the boat owners MUST notify US Customs - Homeland Security IMMEDIATELY, OR BE SUBJECT TO A $5,000.00 FINE! Note: There appears to be some confusion over whether this rule does apply if the vessel has a cruising licence. It is advisable to obtain a written copy of the procedure to be followed when initially clearing in or being issued with a cruising licence. See Documents for the list of countries whose boats are eligible for a cruising permit. Source: www dot noonsite dot com/Members/val/R2009-02-28-2 UNQUOTE So this is the reality in cruising the GREAT LOOP for a Canadian vessel and crew.

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