Soon after I finished my PhD, I had the experience of teaching as an adjunct professor in Ontario. Eventually, I quit because I felt that the working conditions for contingent labor in higher education sucked–and they do: just google the terms “adjunct hell”. Then, I worked another job which I soon quit. But to damage my reputation after I quit, one of the people from the second job asked for a reference via e-mail from the first employer and soon a flurry of e-mails had damaged my reputation among about a couple dozen people. The first employer had even gone so far as to accuse me of “unpleasant breaches of trust”, not realizing that the term “breach of trust” is legaleze, usually for criminal behaviour related to money or the virtue of young women. Later, the man apologized to me, saying that what he meant is that I had let them down.
This whole incident made me look into privacy laws in Ontario, and soon I found that I could have sued my first employer for defamation of character and the improper divulging of private information with malice. Employers must be circumspect about information: about what information they share with outsiders; about the recipients of the information; and about who within the company gives out the information. Since the recipient of the information was no longer my employer, it no longer served any purpose as a reference. Since the person who wrote the damaging reference evidently felt malice towards me, he should have found someone else to write the reference. Since the information could potentially damage my reputation, the first employer should have made sure that they followed proper protocols as an institution in order to avoid a defamation or privacy of information lawsuit. The guiding principle is: Information is on a need to know basis. Never divulge private information to someone who is not in the need to know.
This is the curious thing about FATCA. The Canadian government has announced that it has serious concerns about FATCA. Furthermore, Finance Minister Flaherty has insisted to the Americans that Canada is not a tax haven, and therefore there is little likelihood that the IRS will glean information through FATCA that will help with tax enforcement.
So if FATCA isn’t about tax enforcement, what then? Well, as our own renounceuscitizenship has so adeptly pointed out, the most valuable FBAR to the IRS is an unfiled FBAR.
I believe that this is all part of a master plan: The first part of the plan is to saturate the media with the OVD offer. Then, those who still remain can no longer use the excuse of ignorance; the IRS will say, “Where the hell were you, in Timbuktu, that you didn’t hear about FBAR and OVD programs?” So any remaining undeclared accounts that they find will now be subject to wilful penalties up to 50% of the contents of the account. But the perennial problem of FBAR is this: since the account is in a foreign country, the only way that the US government can learn about it is if you tell them. So if you don’t tell them they won’t know.
So the second part of the master plan is FATCA: they will force your bank to rat on you.
Now the Canadian government has said that it will not collect FBAR fines. So if you don’t have to pay the fines, and the information is useless for tax enforcement, why then does the IRS need the account information? In other words, the basic test for divulging private information is not satisfied: the IRS is not in the need to know because the information should be useless to them.
But it won’t be useless to the IRS, because the third part of the master plan is this: the IRS will start sending fines to Canadian residents, based on the FATCA information that the Banks have sent them. These fines will consist of 50% of your account balance, for wilful failure to file FBARs (this is implied by what the IRS has official stated). Even though the Canadian government has said they won’t collect these fines, the IRS is hoping that there will be some very frightened people who will nevertheless pay the fines to them directly, either the full amount or a settlement of a portion of the extortion.
Thus, the banks are preparing to divulge information to the IRS that the Canadian government has said is unnecessary since Canada is not a tax haven. Not only so, but that information can do great damage to many Canadians residents who have undisclosed accounts. This is a disaster and this is why we must stop the Canadian banks from implementing FATCA and giving millions of account numbers with names and addresses to the United States. We must plead with the Canadian government to stop them. If that doesn’t work, we need to begin protests and other actions against the major banks.
@Calgary 411, FATCA is a moot point for me as I am in OVDI and as with you, our banker knows we are USP’s. We will serve as offerings to the FATCA gods while joe next door with US citizenship from when he lived in the US for a few years in the 1960’s skates. Two distinct types of USP’s in Canada, those who are ‘out’ and those not. I foresee problems and a whole lot of resentment (and maybe even some whistle blowing) as there are a great many of us here. I wouldn’t put it past the USG to offer a bounty to the general public.
*Nothing new in Mopsick Law’s post. these regs were posted weeks ago. Calgary411 Does your bank have in their records , their account data base, your birth place? Why would they? If not and unless you have more than 1 million , there is no problem. They are supposed to do an ‘electronic search’ of their account data. If nothing is there, they won’t identify you as an American. If there is something on file, move your account. Tell any new institution you are Canadian. You don’t need to provide a place of birth. Your son will not be on their radar for any reason. He was born in Canada.
They already offer bounties (although they seem not to pay up for the information provided). I’m sure it will easily apply to US persons abroad too, pitting some against others.
No, My bank (RBC) for chequing and saving and my son’s RDSP does not have US information for me or my son. My son’s RDSP, for whom I am the Holder, is identified to US Treasury on my FBARs. The investment bank that has my RRSP, my husband’s RRIF, and my TFSA (TD Securities) does know that I was born in the US; they also know I will be renouncing in November 2012 and will eventually have that all important CLN.
*Good for you. You will be free.
I am a dual citizen and just closed my bank account (120k) by purchasing a land overseas. will the bank report me to the IRS even I do not have an account anymore?
I posted this in the article about the Veterans Jobs act.
The bill was voted down because it did not cut the deficit as was planned. A 60% yes vote was required to get around the budgetary limitiatons.
Screwing US citizens is purposely mentioned as a revenue raiser in one instance. I suspect that such talk has been going on since the HIRE act and before.
Congressional record shows that the Senate is not ignorant of the passport revocations in the bill—-THEY ARE DEBATING IT AND AGREEING TO IT AS BENEFICIAL TO REVENUE GENERATION–
Mr. Sessions: …….In effect, there is a tax increase, argued with some validity, to pay for this bill. The bill uses a tax enforcement measure to stop abuses by people who don’t fully pay their taxes. This will raise revenue, and, therefore, the bill is offset, and so we shouldn’t worry about it. So here we have a new idea for helping veterans: We will raise taxes and revenue and we pay for it.
But this is what is called tax and spend. Tax and spend. We agreed to a limit on what we would spend. If we have discovered a method to collect more taxes or raise taxes to get more revenue, that money, under our budget agreement last summer, is to be used to pay down the debt, not to take more money to spend on a new program today because we have more revenue to spend. So that is a fundamental issue. Just because it is paid for does not mean we are not spending more than we agreed to spend. We very precisely are. ……….
Article 1, Section 7 of the United States Constitution says: All Bills for raising Revenue shall originate in the House of Representatives. ….. This is a revenue bill.
Let me just point out the bill is not going to go through the House since it violates the Constitution. There are revenue proposals in this bill. It will not see the light of day in the House because the Constitution says revenue bills must be generated in the House. So we have wasted all this time producing a bill that cannot and will not be received by the House. ……”
No doubt you could research and find more instances, this is just an 8 minute research job. The Constitution is mentioned not in the interest of how US citizens get screwed rather the part of the Constitution which states the order in which a bill is taken up.
Seems to be some current discussion of FATCA and the IRS crusade against US citizens/person born or living abroad here:
Worth reading very thoroughly – also mentions the CRA notice of refusal to assist in collecting FBAR penalties in Canada:
International Tax Enforcement
November 8-9, 2012
New York, NY
OFFSHORE ACCOUNT ENFORCEMENT ISSUES – 2012
Scott D. Michel, Caplin & Drysdale, Washington, D.C.
Here is an excerpt from the conclusion of the paper named above;
……..”And the United States Congress, working with the Administration, has clearly put international tax issues at the forefront of mechanisms to improve information reporting, obtain more tax and penalty revenue, and enhance enforcement efforts.
Governments are starved for revenue, and these efforts are aimed at promoting tax compliance and fairness as well as raising money for a nation’s fisc. We expect such efforts to continue”….
………”It is very much in the IRS’ interest to encourage taxpayers to come forward and bring funds held in undeclared accounts “back into the system,” for future taxation on income and gains earned by such funds and, eventually, perhaps, through imposition of
the estate tax. The voluntary disclosure policy is an important component of the IRS’s overall compliance mission. “…….
So it would seem to me, that this confirms that the OVD programs were about generating penalty revenues – not just about collecting tax that was owed. And, that the FBAR and FATCA asset reporting is not just about assessing tax owed NOW. It is about our eventual net worth, and assets, and estates – though those assets are entirely generated and held in another country – like Canada, where one would expect the first claim to be that of the government where we actually reside, and where the assets came into being.
This also has important implications for our non-US spouses and children – because the US is set to steal from them the assets we would be able to pass on – if they were US persons too, or if we did not have the unwanted US taxable burden.
How Canada cannot see how the US is ensuring first dibs on wholly Canadian economic assets, is beyond me.
One might also note that one of the authors of the paper above, was previously invited to appear before a Canadian Parliamentary committee on tax evasion, where one of the participants was MP Thomas Mulcair. Obviously some Canadian politicians already know, or should know some of the implications of the OVDs and IRS enforcement of the existing draconian threats of US extraterritorial taxation, and their confiscation of legal Canadian made and held assets, as applied to the situation of > 1million deemed ‘US taxable persons’ in Canada. And given the advent of FATCA, those who attended the Parliamentary committee meeting, should be cognizant that what Scott Michel said didn’t work in the US VD programs, will be even more dysfunctional and unjust if our Federal government enables and aids FATCA to be used against those in Canada.
Mr. Scott D. Michel (President, Caplin & Drysdale):
Thank you, Mr. Chairman.
I am honoured to be a guest of your committee to share my
thoughts about issues concerning offshore banking, tax enforcement, and
I intend to very briefly shed some light on the American
experience in this area over the last three years in the hope that it
will assist you in considering what constitutes effective and efficient
tax policy regarding this matter.”……
…..”Third, there is also, at least in the United States, a class of
taxpayers who live outside the country. For these people, tax compliance
has not been very high. They’re not criminals; they generally don’t owe
tax, because of applicable foreign tax credits. But in my judgment, a
policy ought to take into account that there are “foot faults” in
compliance that should not be penalized in the same way as real tax
Fourth, any policy ought to process these cases
efficiently and rapidly. One of the things that broke down in the United
States was that the IRS sought to audit every amended tax return that
came in at the beginning of the program. The system quickly broke down.
There was simply not enough time and not enough resources for this to
The comments of the committee are interested in preventing the ‘offshoring’ of Canadian assets. But, they’re lauding the efforts of the US – who are treating Canadian accounts of Canadian residents as ‘foreign’ and ‘offshore’ if the owners are Canadians with an inherited or birth US status. The committee members don’t seem to note the difference between the US extraterritorial citizenship-based claims, and the Canadian search based on Canadian residence.
Today’s Financial Times has a guest opinion article on US law trumping other countries’ laws and mentions FATCA:
“This push to exert US sovereignty by insisting that its laws should take precedence over those of other countries is not new. The US Foreign Account Tax Compliant Act of 2010 required Swiss banks to share details of accounts held by Americans, in violation of Switzerland’s own bank secrecy laws, which date back to 1934. Many Swiss banks retaliated by closing American customers’ accounts or limiting the availability of new products. That made it difficult for Americans to open bank accounts or take out mortgages in countries where Swiss banks dominate. While a few bad eggs were certainly caught for tax evasion, many more innocent Americans suffered as a result.
Worse, relations between the two countries took a dive. On a recent trip to Zurich and Bern hosted by the American Swiss Foundation, I found many Swiss still resentful. They accused the US of hypocrisy, arguing that many wealthy Latin Americans use US banks to hide their wealth but that America would resist pressure on its lenders to share confidential information with foreign governments.”
It then goes on to say the following, which sounds familiar:
“Obviously the US must honour its laws and treat everyone equally under them. However, two problems arise. First, laws themselves can be flawed. … Second, regulators often have their own agendas.”
The article is called “US must see other countries have laws too”. Might be worth reading.
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This is interesting
This is now indeed happening all over the world with central banks looking for any US taint on you. Be informed and be wise.