Liberty and justice for all United States persons abroad

The Isaac Brock Society

1,012 thoughts on “FATCA Discussion Thread (Ask your questions) Part One”

  1. *My question today:  do Canadian driver licenses, including the EDA versions issued by some provinces, include information as to the holders place of birth?

  3. @Woofy,

    Although the place of birth is not on the EDA; However, I was told that here in BC the information is in the chip the license has and therefore when scanned at the border, it might be noticed by border guard.

  4. *Thanks Tiger and Em.  I am not too worried about the border chip scanning thing cause I do not plan on going there again.  Just wondering tho about the banks because I gave it as an ID to open an account.  So, they cannot scan it now, but maybe the license number could offer up that info if asked?  I don’t recall giving that info when I got the license – could they crosslink me with other gov’t agencies that know?

  5. *The banks policy is ‘Don’t ask, don’t tell.’     The account opening form at a major bank owned brokerage has the statement. ‘I am a citizen of  (check box for the answer)   [ ] Canada   [ ] USA   [ ] Other.

    ID required Driver’s licence. That’s it. 

  8. How far back will banks look for FATCA indicia?   

    I liquidated my RSP in 2012 (which contained a little more than $50000), and as of 2013 have no accounts over $50000, even if aggregated.  If they scan records in 2014, would I show up?

  9. @Old&Simple, I’ve never heard that banks are supposed under FATCA to report old balances–just current balances.  So you can probably forget about everything pre-FATCA, IMHO.

  10. @Just Me, re; ..”Sounds like they (Harper government in Canada ) are learning from the US Treasury”….

    Yes, that is an ongoing issue brought up by the opposition parties – since the Harper government has a penchant for “omnibus” bills –  packaging masses of unrelated legislation and changes in together  – so that no-one can really master what it means or contains. They then shove it through – so it is a perversion of the democratic process, and meant to force contentious issues through without debate or public input. http://www.thestar.com/news/canada/politics/article/1273847–tim-harper-the-omnibus-bill-becomes-business-as-usual-for-conservatives  See; http://www.youtube.com/watch?v=oEi72n6CoZM&feature=plcp  – “RMR: Rick’s Rant – Omnibus Bill II: The Sequel”.

    My fear is that a FATCA IGA will be implemented in a way crafted to eliminate any substantive public notice or debate – and I fear that it is the Alberta tarsands and the crossborder pipeline which may be the tradeoff at issue – because Canada can only lose by helping to persecute and bankrupt its own Canadian citizens and permanent residents – causing a transfer of our personal post-tax, legal made-in-Canada savings to be remitted to the US. The US has no intention of providing any reciprocity, and nothing that gives any advantage to Canada. Canada is already at a disadvantage by agreeing to the Canada-US tax treaty with the ‘last in time rule’ and the ‘savings clause’, ceding a huge advantage to the US, as well as letting them get away with treating most of our legal Canadian government designed registered savings options punitively as ‘foreign trusts’. Depriving Canadian citizens and residents from financial independence – using the savings strategies that Minister Flaherty and the Canadian Finance Department regularly advertises – offering inducements to ALL Canadians and residents to invest in. 

    Look below to see the scale of the numbers potentially effected by the US designation of just the TFSA as a ‘foreign trust’. Assume that the > 1 million Canadian citizens and residents have invested in TFSAs just like their fellows, and divide the figures accordingly (i.e 1/32):

    See http://www.moneyville.ca/article/1311349–tax-free-savings-account-turns-5 “In that 2008 budget speech Flaherty called the TFSA the “single most
    important personal savings vehicle since the introduction of the RRSP    .””….”

    About 8.2 million Canadians have tax-free accounts, about a third of
    those eligible. That includes Flaherty, although he can’t say what’s in
    it because as a cabinet minister his investments are in a blind trust………

    ………..He says the total inside this shelter Canada-wide is $62 billion, for
    an average amount of $7,560 per account,     well short of the maximum
    allowable $25,500. (That sum is the $5,000 annual limit of the past four
    years, plus this year’s limit which increased to $5,500.)

    “Has it lived up to expectations? Yes, it has,” Flaherty says. “I
    would like to see even more people use it     (because if they do) down the
    road Canadians will be able to shelter most of their savings tax free.    ”….

    Now, consider that these households also have RESPs, as well as RRSPs, and RRIFs.

    The Finance Department could easily have researchers come up with some estimate of the size of Canadian savings that the US treates punitively, or requires annual and lifelong forms for exemptions.

    There must be some equivalents in other countries who offer similar options. Are there any figures for something parallel in NZ, or England, etc. ?

  12. This just in from @Tim…

    Interestingly enough on another subject HMRC out of the UK just released another bulletin dealing with the intersection of UK Privacy law and the FATCA IGA. http://www.out-law.com/en/articles/2013/january/uk-financial-institutions-may-face-compensation-claims-if-they-send-inaccurate-data-under-fatca-regime/ Basically by changing UK law(which is has not yet been done) the UK government will have the right from the perspective of a US Person living in the UK to legally transmit their banking information to the US. A US Person UK resident will have the right though to see what their bank send HMRC and what HMRC sends to the IRS. Additionally if HMRC and the bank send “incorrect” information the bank and HMRC will be liable for damages under UK law. 

  14. Bubblebustin…

    Thanks for that.  I had not seen that PDF…  Do you have the link to where it originated?  

  17. sorry if this reference has been been previously posted if it hasn’t here is someone to ?lobby about privacy? or posting more info on his blog?
    it is from the blog of The Blunt Bean Counter Mark Goodfield
    a tax partner and the managing partner of Cunningham LLP He indicates that he filed US tax returns until one yera before this post. in 2011
    http://www.thebluntbeancounter.com/2011/06/privacy-laws-in-canada-and-income-tax.html

    http://www.thebluntbeancounter.com/2011/06/us-citizens-and-green-card-holders-must.html

  18. thanks for that dtrh, I followed a link from the one you provided, and saw this so very valuable information from an older article about FATCA, that shows that our concerns were already candidly identified as problems back in the fall of 2011. So anything that the Harper government and Minister Flaherty do to sign a FATCA IGA, they do will full knowledge of many of the preexisting problems we have been writing to them about.

    And the same is true of the Privacy Commissioner – who has been totally silent on this for many months now. The quotes are very interesting partly because of how specific, and how anti-FATCA they were then, vs. the silence, or “we’re satisfied the IRS has heard us” pap, and the “an agreement is imminent” stuff – vs. the outright resistance we relied on from the Finance Minister from his statements in our defense back in the fall of 2011. How things have changed.

    See:

    “Privacy Commissioner eyes the long arm of U.S. tax law”

    Friday, June 24, 2011

    BARRIE McKENNA

    https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20110624/RBTAXESPRIVACYMCKENNAATL

    …….”A Finance department official echoed the unease, saying the
    government is worried about potential conflicts with Canadian laws,
    including “the protection of privacy and Canadians’ fair access to
    banking services.    “

    Among the potential problems with the American law, slated to come
    into force in 2013, is that it would compel Canadian banks, brokers,
    insurers and mutual funds to collect U.S. Social Security number and
    report account balances directly to the Internal Revenue Service    .

    “The concern is the collection of customers’ personal information and
    the transfer to the U.S.    ,” said Valerie Lawton, a spokeswoman for Ms.
    Stoddart, the federal Privacy Commissioner. “We have been following this
    issue closely … and have had discussions with a range of industry
    stakeholders    .”

    Under Canadian law, customers are only required to provide
    identification that shows where they live – not their immigration status
    or citizenship.”…….

    …..”The United States says it’s open to the idea of exempting certain
    registered accounts, such as RRSPs and corporate pensions. But IRS draft
    rules make no mention of investments such as Tax-Free Savings Accounts
    and Registered Education Savings Plans. “

    So, this is evidence that also, the Finance Department was aware then, and now of how toxic the TFSA and RESP are for us to hold, and yet, continues to be silent in the face of the inadequate ‘streamlined compliance’ program that started to be offered in September 2012 – but still included TFSAs and RESPs as “foreign trusts’ subject to the huge potential penalties of the 3520 and 3520A.

    This article http://www.theglobeandmail.com/globe-investor/personal-finance/financial-road-map/tfsas-still-underused-sorry-mr-flaherty/article7416281/ describes the stages of life as a Canadian, using registered savings like TFSAs to invest in for the future. Too bad > 1 million Canadian citizens and residents can’t. Which our Ministry and Minister of Finance, and our Prime Minister knows very well. And yet says nothing to us to acknowledge our problem, and does not warn us away from them – knowing that because of the IRS reporting liability they only add more pain for us…..

  19. Financial News: “Ten things you need to know about Fatca”

    http://www.efinancialnews.com/story/2013-01-23/ten-things-you-must-know-fatca

    From the article:

    “1) Why Fatca is needed
    Tax evasion costs the US economy an estimated $100bn a year, in part due to individuals hiding money in offshore accounts.” 

    “2) How much Fatca is expected to raise
    The US expects the Foreign Account Tax Compliance Act to raise $7.6bn in tax revenue for the IRS over a 10-year period.”

  20. FATCA from the International Man:

    These costly regulations make the world a smaller place for Americans. Most foreign banks want nothing to do with American clients and it is no wonder why. The benefits do not outweigh the costs; any rational business owner would make the same decision.

    Perhaps it is a desired effect.

    Edicts like FATCA serve as an indirect form of capital controls, as they effectively create significant barriers for capital to leave the US.

    http://www.internationalman.com/global-perspectives/weekly-update-the-grip-gets-tighter-irs-finalizes-fatca

  22. I am quickly putting this here, as not much time today, but it needs a fuller review and discussion on another thread or posting of its own.  

     Will U.S. Hypocrisy on Information Sharing Continue?

    by Lee A. Sheppard

    In news analysis, Lee A. Sheppard explains why the United States is not engaged in information sharing with Latin American countries and why many nations avoid signing a tax treaty.

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