Canadian Crossing Concerns

     If you are a Canadian who wins big (over $10,000) in the USA, you might be the subject of two currency transaction reports. One filled out by the US casino where you won the money for the IRS and one filled out at the border for the Canadian Border Service Agency (CBSA).

     Why, you ask?

     The first report is the Form 8300 filing required by Title 31 of the US code to circumvent money laundering and the funding of terrorist activities. It applies to aliens as well as to US citizens. How do I know that? From the instructions at 4.26.10.7.1(5) of the IRS document HERE. It indicates that identify verification for aliens or non-residents must be done by using the person’s passport, alien Identification card, or other document evidencing nationality or residence. The document used is recorded on the form, and the form is sent to the US Government to aid in its money laundering investigations.

     The second report is required by the CBSA. You can read their guide for yourself at CBSA. Here’s what it says:

     It is not illegal to transport money across the US/Canada Border. It doesn’t matter how much money you bring into Canada or how much money you take out of it. But there is now a requirement to report to a border services officer transactions totaling CAN$10,000 or more. It makes no difference whether the money is coin or currency, domestic or foreign, or whether it includes travelers cheques, bank notes or securities. If it’s more than $10,000 and it’s cash, you must declare it and complete Form E677.

     If the funds are not your own, you complete Form E667 instead. You cannot avoid the requirements by mailing the funds into Canada. The form must be completed and included with the item being mailed. Another copy is sent to the nearest CBSA office at the same time. Other postal requirements may exist. Nor can you avoid these requirements by sending the money by courier. If you fail to report monetary instruments greater than $10,000, your funds are subject to seizure and the assessment of penalties or forfeiture. Penalties can range form $250 - $5,000. 

     Canadians with questions can call throughout Canada at 1-800-461-9999. Outside of Canada call 204-983-3500 or 506-636-5064. 

     There are a lot of sites with threads discussing CBSA reporting requirements on the internet. Unfortunately many of these bloggers are making suggestions about how to circumvent the rules. Are they devious people? Or do they not understand the rules and the reasons for them? Why should you need to hide something legally won? Especially if it is recreational gambling winnings. Canada doesn’t tax recreational gambling winnings of its citizens - only a Canadian professional gambler’s business income is taxed by Canada.

     Not all of the ideas put forth on the web are bad. One writer had some very good suggestions. He suggested you document where the money came from - a letter from the casino, a picture of the winnings, a copy of your plane ticket, etc. He advised that you ask the casino to write you a check for your winnings rather than try to carry large amounts of cash across the border. He felt that the Canada Revenue Agency might contact you about the money, and if you couldn’t prove that is was recreational gambling winnings, they’d want it declared as taxable income. 

       Incidentally, don’t forget 30% is withheld by the US casinos from foreigners on large wins. If you are a Canadian citizen with winnings in the States, you may need to file a US 1040NR return to have overwithholding refunded at tax time. Take a look at my earlier post HERE that addressed Canadian gambling rules if you’ve forgotten.