Polston Tax Attorney Rachel Pappy explains how the IRS taxes all US citizens regardless of where they live. I used the example of the athletes on the Toronto Raptors who won an NBA Championship last week. They may live in Canada and earn income derived from a Canadian franchise, but if they have US citizenship, they are responsible for paying federal and state income tax. The good news is they will get some credit for the income taxes they are required to pay to Canada. (With a top federal and provincial tax rate in Ontario of 53.53%!)
