Mike Sullivan, MP, York South-Weston, has given his permission to share my email “conversation” with him.
My original email to Honourable Mike Sullivan, MP (NDP):
Sent: January 17, 2012 6:36 PM
To: Sullivan, Mike – M.P.
Subject: Fw: We need to make a priority the way RDSPs (as well as RESPs and TFSAs) are treated in the Canada/US Tax Treaty and taxed by the US
Importance: HighDear Member of Parliament Sullivan,
I live in Calgary so am not represented by you. However, it has been brought to my attention that you were born in the US and, as such, I am interested in your views on this, personally, and for the constituents you represent.
- What are doing about your status as a US person in Canada?
- What are you doing in Parliament to fight the invasion of the US IRS?
- Have you been following in the media all of the IRS instructions and inequitable treatment to US persons in Canada and abroad, for yourself and for your US person constituents affected?
- Do you appreciate being painted with the same brush by IRS Commissioner Shulman as for real persons evading taxes that you are a tax evader?
- Do you feel that you and your ‘US person constituents’ are second-class citizens in regard to your choices for retirement savings, RESPs and RDSPs (should you have a disabled member in your family), cost of tax preparation, and loss of privacy to the US of your financial holdings?
It is interesting that I have gotten acknowledgements of receipt of the email below from only my MP’s (Michelle Rempel) constituency office and the office of Finance Minister Flaherty, with no discussion from them of what their positions are on this or if and how they are proceeding on an issue that affects about one million of their fellow Canadians.
US persons in Canada, not tax evaders, but hard-working, tax-paying people in Canada, are either paying huge sums for advice and help from US tax lawyers and accountants to bring themselves into compliance for back US tax returns and FBARs; threatened into entering into OVDI, which means they are saying they are criminals with huge penalties; hiding their heads further in the sand and hoping and praying that this will go away and they will not be affected, but then afraid to cross the border to visit aging relatives and family; or choosing to renounce their US citizenships, for some at a very great financial cost (a good portion of them “Accidental Americans”). The stress this is putting on families is staggering. Where is the outrage?
You may be interested at the inequities pointed out in this link, just released by the Association of American Residents Abroad: http://aaro.org/position-papers-2011?start=1
Regards,
(“calgary411”)
Sent: Wednesday, January 04, 2012 1:53 PM
To: Minister James Flaherty ; Michelle.Rempel@parl.gc.ca ; US Ambassador to Canada David Jacobson ; Gary Doer, Canadian Ambassador to the USA
Subject: We need to make a priority the way RDSPs (as well as RESPs and TFSAs) are treated in the Canada/US Tax Treaty and taxed by the US
Finance Minister James Flaherty
Member of Parliament Michelle Rempel
US Ambassador to Canada David Jacobson
Canadian Ambassador to the USA Gary Doer
Dear Government Representatives,
The Canadian disabled population who happen to be dual Canadian/US citizens, many of them “Accidental Americans” who have lived in Canada all or most of their lives, are being very much discriminated against by the IRS of the USA. Holders and Beneficiaries of Registered Disability Savings Plans, until this is addressed in the Canada / US Tax Treaty*, last revised on September 21, 2007, http://www.fin.gc.ca/treaties-conventions/USA_1-eng.asp are not getting full benefit of these plans, which are in many cases used as pension plans for the better futures of disabled Canadians.
* Protocol Amending the Convention Between Canada and the United States of America With Respect to Taxes on Income and on Capital Done at Washington on 26 September 1980, as Amended by the Protocols Done on 14 June 1983, 28 March 1984, 17 March 1995 and 29 July 1997
This electronic version of the Canada-United States Protocol signed on September 21, 2007, is provided for convenience of reference only and has no official sanction.
Can you, Minister Flaherty, Member of Parliament Rempel, US Ambassador to Canada David Jacobson and Canadian Ambassador to the USA Gary Doer, advise what you are doing to make this issue a priority or advise me if the information below is incorrect?
As far as we know, the IRS will most likely consider RDSP’s a foreign trust requiring the standard reporting requirements (i.e. IRS form 3520/3520A and quite likely IRS form TD F 90-22.1 under the FBAR requirements) for U.S. citizens and residents that are RDSP plan holders. Unlike RRSP’s/RRIF’s held by U.S. citizens that are afforded a tax deferral under Article XVIII(7) of the Treaty, RDSP’s are not yet eligible plans for such tax deferrals for U.S. citizens or residents. As a result, RDSP plan holders and beneficiaries that are U.S. citizens or residents will not benefit from the tax deferral currently enjoyed by Canadian RDSP plan holders.
More importantly, the U.S. reporting requirement in itself may make it too difficult for U.S. citizens to be plan holders or beneficiaries of RDSP’s. Adding the RDSP to the agenda for Canada-U.S. Income Tax Convention discussions is critical for RDSP beneficiaries who are American citizens.
Hope this helps. If you require any further assistance, please let me know.
Mackenzie Financial Corporation
180 Queen St. W., 16th Floor
Toronto, Ontario M5V 3K1It is more than unfortunate, in fact it is immoral, if this is not a priority for the Canadian Government to address with the USA as treatment of the RDSP by the IRS makes this vulnerable population, that happen to be US / Canadian dual citizens, SECOND-CLASS CANADIANS. They should receive, as other disabled Canadians, full benefit of the Registered Disability Savings Plan.
Respectfully submitted,
(“calgary411”)
Kind response from Honourable Mike Sullivan’s Constituency Office:
Dear (“calgary411”),
Mr. Sullivan is currently out of the country, so I am taking the liberty of providing an initial first response to you. Please be assured I will bring your email to his attention at the first opportunity, likely to be after his Caucus Retreat at the end of January.
As I have never spoken directly to him about this I cannot speak to his position on some of your questions. Mr. Sullivan is a member of the parliamentary Canada-US Association and I am sure will be interested in your concerns and in corresponding with you directly. Certainly, it is an issue that is of great interest to him, as he serves as the deputy critic on Persons with Disabilities.
Thank you for writing.
Administrative Assistant to
Mike Sullivan, MP – York South Weston
A short note from Mr. Sullivan, as well…
From: Sullivan, Mike – Personal
Sent: Wednesday, January 18, 2012 02:36 PM
Subject: US abroad issues
Hi (“calgary411”)
This subject interests me a great deal. However I’m away from my office so will give you a more thoughtful response when I return.
Mike Sullivan MP.
Then, January 30th, from Honourable Mike Sullivan…
From: Mike.Sullivan@parl.gc.ca
Sent: Monday, January 30, 2012 2:45 PM
Subject: RE: We need to make a priority the way RDSPs (as well as RESPs and TFSAs) are treated in the Canada/US Tax Treaty and taxed by the US
Thank you for your email. You and hundreds of thousands of other Canadians who have past ties to the U.S. are grappling with the situation of filing IRS tax returns and FBAR report.
That said, the IRS also recognizes that the profile of the issue has been raised around potentially hundreds of thousands of Americans not filing their taxes and FBAR. The IRS also states its purpose is to bring Americans abroad into compliance with their citizenship responsibilities.
The NDP strongly supports measures to crack down on off-shore tax evasion and avoidance, but believes such efforts must target criminal behavior and not innocent law-abiding citizens.
On December 14, 2011, at the initiative of Alex Atamanenko MP for the Southern Interior of British Columbia, who has been working very hard on this file, met with U.S. Ambassador David Jacobson, together with Peter Julian (Burnaby-New Westminster) NDP Finance Critic and Hoang Mai (Brossard-La Prairie) NDP National Revenue Critic in order to address the harsh penalties.
The Ambassador confirmed that while requirements to file will not be relaxed, there was an indication of a possible loosening of the interpretation regarding the application of penalties.
IRS December memo
In December, the IRS confirmed that U.S. and dual citizens who failed to file their annual income tax returns and/or file under FBAR or pay their tax may be exempted from paying penalties, provided that they are able to show that the failure was due to reasonable cause, not wilful neglect.
For further information, see the IRS memo “Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.” at http://www.irs.gov/newsroom/article/0,,id=250788,00.html.
“Reasonable cause”
According to the U.S. Ambassador and the IRS memo, the IRS may consider reasonable cause for noncompliance to include being unaware of the requirement to file or pay tax.
The memo further states:
“Whether a failure to file or failure to pay is due to reasonable cause is based on a consideration of the facts and circumstances. Reasonable cause relief is generally granted by the IRS when you demonstrate that you exercised ordinary business care and prudence in meeting your tax obligations but nevertheless failed to meet them. In determining whether you exercised ordinary business care and prudence, the IRS will consider all available information, including:
– The reasons given for not meeting your tax obligations;
– Your compliance history;
– The length of time between your failure to meet your tax obligations and your subsequent compliance; and
– Circumstances beyond your control.
Reasonable cause may be established if you show that you were not aware of specific obligations to file returns or pay taxes, depending on the facts and circumstances. Among the facts and circumstances that will be considered are:
– Your education;
– Whether you have previously been subject to the tax;
– Whether you have been penalized before;
– Whether there were recent changes in the tax forms or law that you could not reasonably be expected to know; and
– The level of complexity of a tax or compliance issue.
You may have reasonable cause for noncompliance due to ignorance of the law if a reasonable and good faith effort was made to comply with the law or you were unaware of the requirement and could not reasonably be expected to know of the requirement.” (http://www.irs.gov/newsroom/article/0,,id=250788,00.html)
As for the RDSPs and TFSAs, the IRS treats them as foreign trust, they are not eligible for such tax deferrals for U.S. citizens or residents. Adding the RDSP and the TFSA to the agenda for Canada-U.S. Income Tax Convention discussions is critical for the numerous citizens holding these saving vehicles. We will look into this issue and discuss it further with our foreign affairs critic.
Additional information
For further information regarding the U.S. Examining Process for FBAR, please see http://www.irs.gov/irm/part4/irm_04-026-016.html.
You may wish to keep abreast of developments through the U.S. Embassy in Ottawa website for Taxpayers Assistance at http://canada.usembassy.gov/service/taxpayer-assistance2.html.
…
I hope this information is helpful. Please rest assured that my New Democrat colleagues are hard at work to persuade the authorities to loosen the interpretation regarding the application of penalties, by broadening the scope of ‘reasonable cause’.
I hope you find the foregoing helpful. Please do not hesitate to contact our office if you have any questions or comments.
Yours truly
Mike Sullivan, MP, York South-Weston
My further questions to Mr. Sullivan, with bolded permission and caveats…
Dear Honourable Member of Parliament Sullivan,
Thank you very much for taking the time to reply to my queries. It is certainly an example of how a government representative should be responding to their constituents, and you are not even my MP, so I appreciate it very much.
I am pleased to know that your and your NDP colleagues will keep this issue alive in your quest to persuade authorities to loosen the interpretation regarding penalties and “reasonable cause”. Many are waiting to see the response to the Taxpayer Advocate Directive from the Taxpayer Advocate Service: http://www.irs.gov/pub/irs-utl/recommendations_tad2011-1.pdf. The TAS Report to Congress is most enlightening: http://www.taxpayeradvocate.irs.gov/Media-Resources/FY-2011-Annual-Report-To-Congress-Full-Report
I would like to ask permission to share the information you’ve provided me on http://isaacbrocksociety.com/, where a growing number of Canadians and US persons around the world are discussing this important issue? Your response to me is relevant.
[response] As for my personal situation, I came to Canada with my family as a very young boy and so my Canadian-born children are not, as you call them, ‘accidental’ Americans. I would have had to live in the US for 10 years, at least 5 of which after I turned 14, for that to happen.
Further, (You can use my info, with 2 caveats. One, I’m not exactly sure of the rules. I was told 10 years, 5 of which after age 14, but now am told 5 years, 2 of which after age 14, is what I had to live in the US for my kids to be accidental Americans. I left when I was 5, and did not return to live.)
I am very pleased that your children do not fall into the category of “Accidental American”. My adult children, born in Canada to US parents, are considered US citizens as many others in Canada, some of them not even aware of the status the US has given them. When they find out what their responsibilities are as such, it’s truly a life-changing moment.
[response] With respect to your question concerning MP’s born in the U.S., I note that there is currently no general prohibition on U.S. citizens’ running for an elected office in a foreign government. However, it would appear that “ accepting, serving in, or performing duties in a foreign government is a potentially expatriating act if the person is a national of that country or takes an oath of allegiance in connection with the position.” As a Canadian Citizen and a Canadian Federal Government Member of Parliament, I most assuredly took an oath of office and am proud of it.
Further, (As for the ‘certificate’ I have never had one, nor was I offered one. Apparently the law changed in 1967, meaning merely voting in a foreign election ceased to be a loss of nationality event after that date. And apparently if I want to lose my US citizenship, I must actively go to a consulate and do so.)
As you should be proud of it! Do you, though, have that important piece of paper to accompany your Canadian passport – your personal Certificate of Loss of Nationality? You likely have special status to cross the border without question, but many of us who came to Canada in the 1960’s and 1970’s and were warned that we would be relinquishing our US citizenship when we took our Oath of Canadian Citizenship did not know of and did not receive that important piece of paper. We were not informed by the US when they changed their laws that we were actually again US citizens. We were not given a choice to opt in or opt out. We assumed and lived our lives as only Canadians – working, raising our families, paying our Canadian taxes, generally trying our best to be good citizens, living in the country of our choice.
I appreciate that you are giving of your valuable time. Could you give your further response to the above? There are many taking note of the NDP position on this important subject.
Again, thank you.
Respectfully,
(Mr. Sullivan’s response inserted into message above)
@Calgary411
Just to understand he was never offered a CLN and doesn’t have one. We really need a good(Canadian) lawyer to take this case up pro bono at the very least to explain all of the legal issues i.e. dominant nationality. I know I look like a lawyer but I only play one on TV. I am happy there are MP’s still on the case given I think the US at some point is hoping everyone will get tired of this whole issue and go away. The tax treaty is an interesting bargaining chip. First the Conservatives coming to government in 2006 committed that all future treaties would be voted by parliament so individual MPs would have a voice. Unfortionately there are no scheduled negotiation in the near future and the interesting question is what Canada would give the US in return.
Back to the legal front I have no personal relationship with the lawyer I linked to below but he is the type of person needed to take on this type of case.
http://en.wikipedia.org/wiki/Joseph_Arvay
I like the quote “meaner than a junkyard dog”
Thank you, Calgary411, for sharing that exchange. Sounds like they are doing something which is encouraging.
Much appreciated Calgary 411, Thank you for addressing our concerns, especially in regards to our children, we muct protect them and stop this nonsence.
I will be writing my letter tonight to whomever I can think of, brew a few pots of coffee and away I go!!
@Wowthissucks,
Good for you and others for corresponding with our government representatives.
Someone (like Petros) has, I think, provided links in my post. If you right click on the names in the post above, you will get email addresses (left click on each and it should put you into your email program with that person’s address already placed at “To:” It is a start for who you can send your letters to in Canada, plus of course your own Member of Parliament and representatives in your province.
Minister James Flaherty ; US Ambassador to Canada David Jacobson ; Gary Doer, Canadian Ambassador to the USA
I know there are other good links to address our letters to and a sample letter for some of our concerns at the ACA site, which I’ll look up later for you. (I am away from home for a nice long walk with my husband in balmy, sunny we have in Calgary today — and to clear my head of some of this for awhile.)
Thanks, Wowthissucks (and it sure does!)
@ Calgary 411
I appreciate the help and I am on my way to start my letters tonight, coffee is brewing. I really hope we can open some eyes and the Canadian Government will help us with this issue as its really a huge concern for our innocent children, they need to be left out of it and our government needs to protect them and tell the US to back off with seeking them out. If people want to be US Citizens and assert their claim, the US will be the first to know with a passport application and SSN application on their desk, then our children will of course file and be subject to report to the IRS (like the rest of us who are registered and confirmed citizens now we know!). (Till I get my CLN this year!!!). I wish I didnt have to go to that extreme with renounciation, its sad to come to this. I don’t make a large income or have dazzling assets, I live in a fixer-upper home and drive a rusted old beater truck….rather hard trying to make ends meet in our family…so I have nothing to hide from the US and I am not renouncing to evade taxes, I am just your average working mom trying to support two kids. But, the cost of just being compliant has made it impossible to do yearly, H&R block charged me 2500 to file back 6 years (as many of you), I dont have that kind of cash and with Christmas that was fast approaching after learning of this, sure made it tight for our family. I am not a tax evader or criminal as we are all being portrayed. I am a law abiding canadian citizen as our my children and husband who do not deserve to be dragged into this. This has consumed my life and soul since the day I became aware of this, Sept 3, 2011 is a day I will never forget and that terrible knot as been in my stomach since. The endless hours spent searching frantically on the interent for learning how to become compliant with the IRS, calling them to find out answers (although, never getting any answers) searching through US website after website to determine the fate of my children and on top of that …trying to live my life and focus at my job/home and maintain some level of a normal life has been impossible. This has greatly affected my health and family life. I am not sure if the government cares, but do they realize how much this affects people…how its destroying families…hope..dreams..freedom. People like us, just trying to legally do the right thing, be honest people…and in turn…its killing us, physically and mentally. I will continue to do the right thing, being honest to the US government, IRS etc as I have been to this point. I will hopefully be able to regain the joy I had in my life once this is all said and done and try and find the peace I had before…I am not sure if I will ever step foot again across that US border now….not because I am a criminal, but because they have made us to feel like we are less of people, all because we have chosen to give our loyalty and allegiance to our great country of Canada and hold one citizenship. I am sure the CLN will cause huge issues for us crossing that border…and with my kids by my side, I can only imagine what questions may arise. I think we will stay far and clear from there….thank goodness we have done the Disney trip!
@Wowthissucks,
I’ve read your latest with tears in my eyes for what you and your family are going through. Damn, damn, damn.
Here is a comment on an earlier post of mine from Victoria in France:
“Victoria
JANUARY 26, 2012 AT 2:42 PM
@calgary411 – Fantastic letter. Really well done.
I see that ACA has a sample letter here
http://www.aca.ch/fatcapp.pdf
and the contact info of the Americans Abroad Caucus members here
http://www.aca.ch/joomla/index.php?option=com_content&task=view&id=73&Itemid=74
I will write tomorrow. Thank you, calgary411, (and Blaze too) for the inspiration to finally get off my behind and do this.
And once I get that done I will tackle the MEPs and Le Monde.
Allons-y!!!
Also check out the excellent letter by Blaze at this link:
http://isaacbrocksociety.com/2012/01/26/my-further-correspondence-with-one-of-our-canadian-ndp-members-of-parliament/
Godspeed. When you’ve finished your letters, spoken from your heart, you will feel that you have done something concrete to help your cause. If nothing else, it is worth that.
But, our hope is to have our government representatives really listen and carry on the needed conversation with us, their fellow Canadians (and the same for those in other countries).
We’re all in this together. Once again, thank all that’s holy that we have this site to empower us, to tell the real stories and to get needed support from one another.
Wish I could be there to help you and drink some of that coffee you have brewed!
@Calgary 411-
Thank you..it was from the heart and that is exactly how I have addressed my letters…I hope they take what I have to say….and fight for us. It’s our only hope…lets spread the word and our stories. We are people..not numbers…or STATS….just innocent people and children.
@ Calgary 411
I wish you could join me for coffee…. 🙂
@calgary411& wowthissucks
When I read your stories it’s hard to contain myself. I’ve never felt so angry. And especially you calgary and everyone whose in the same situation as you and your son.I know other families in the same situation as you. There just trying to get by day by day and the challenges that brings to have this on top is just insane. Most don’t have the funds to comply and tell the U.S. they owe them nothing. I know for myself life has not been the same since september.It’s affected just about everything. Not one day has gone by that this hasn’t been part of my day.I was born in the U.S. to Canadian parents and came to Canada as a child and when I was an adult my parents and siblings returned to the U.S. and are still there. One of my children is considered american by their laws. I’ve had to use credit to comply and tell them I owe them nothing. I can’t afford going forward to comply with their demands. And next week I go to renounce. I won’t be able to put this behind me until I get my CLN and log out of the I.R.S. and than make my first trip after this mess to visit my family,
@babbs
I am glad you are taking steps to remedy this monster for your family, but not glad of your financial, emotional cost.
I, too, will get to the end of my maze. It is especially those who don’t yet know of this or how it will affect them and their families that I worry about. We are helping get the real story out there!!
Here is what I have yet to accomplish:
With US tax lawyer:
1. Determine if all IRS tax returns, 2005 – 2010 are complete
2. Make amendments to returns, i.e. neglected to include RDSP information; Form 3520’s for corresponding years of RDSP and TFSA; correcting anything else that might be missing
3. Determine if all 2005 – 2010 FBARs are correct
4. Amend any incorrect FBARs and resubmit to Department of Treasury
5. Prepare Net Worth, using IRS definitions, to determine if subject to US Exit Tax (hopefully not, and if so, will have to comply with stress expense and nonsense of complying with US taxes each year)
6. File 2011 US return and FBAR
Then,
7. Make and complete appointments with Calgary US Consulate to renounce US citizenship
Reasons:
· I do not want a dual citizenship with two allegiances – I lived in Canada for decades believing I had relinquished my US citizenship when I took my Oath of Canadian Citizenship in 1975 – not so.
· I have lived in Canada since 1969, have lived my life as a Canadian, raised my family in Canada, worked in Canada, paid my taxes to Canada, been a good citizen of Canada and have always intended to be only Canadian.
· I do not wish one penny of the money I have earned and saved in Canada to go to the US Military Industrial Complex.
· I do not wish to continue the stress and expense of administration of compliance with responsibilities of citizenship in two countries.
· I do not want to pass on to anyone in my family or to any executor the stress and expense of administration of compliance with responsibilities of citizenship in two countries.
· Because of health concerns (I have Crohn’s Disease / am an ileostomate), why would I ever want to live in the US where I would have no health care insurance or benefits because of pre-existing conditions?
8. Discuss renunciation of adult son with US Consulate
Reasons:
· Besides being born in Canada, raised in Canada, schooled and worked in Canada, received disability benefits given by Canada, never registered with the US, never received any benefit from the US, he cannot carry out the responsibility of a citizenship in the US (by reason of perceptual capacity) nor will he ever have the funds to comply with the responsibilities of US citizenship. Absurdly, for him to have the RIGHT to renounce his US citizenship if he did indeed have the perceptual capacity to make the important decision of renunciation of citizenship, he would have to apply for a US social security number, back file at least five years of US returns (for which he would owe $0.00, plus Foreign Bank Account Reports (FBAR) as his financial accounts are over $10,000 with his RDSP and for which there are potential huge penalties,. (I, as his mom and the Holder of his RDSP, am taxable to the US for the Grants and Bonds that the Canadian Government has contributed to his RDSP since it was opened in February 2008.)
· He is already discriminated against because his benefits to the Canadian Registered Disability Savings Plan are negated from that of a Canadian without a US connection.
· Because of health concerns (besides developmental disability, he has asthma and hereditary hemochromatosis), it is makes no sense for my son to ever live in the US where he would not have the health care insurance or benefits he has in Canada.
9. Department of State will approve the renunciation made at US Consulate if there’s no reason to believe it isn’t my own decision and I know what I’m doing,
10. DOS will inform the IRS of my Oath of Renunciation,
11. File Form 8854 with Department of Treasury
12. Comply with the IRS by filing all final tax returns (if renouncing in 2012, the portion of the year before renouncing)
13. Wait for Certificate of Loss of Nationality (can take 2 months to 1 year)
Calgary411: Your story should be on the front page of the New York Times as an example of the unmitigated gall the US has in enforcing its extra-territorial tax policy on innocent victims.
But a question: why don’t you go the relinquishment route rather than the renouncing route? I think at the end of the day you still get your CLN, but it will be dated as of the time you became a Canadian citizen and you might have a good argument for the IRS that they have no hold on you after that date. I know there’s a suggestion out there that the IRS will look at the date the CLN is approved, but your legal p;osition to fright that might be a lot stronger with a r5elinquish than it is with a renounce.
That’s the route we will go, and our dates are very close to yours (in Canada since 1969, citizens since 1974). We have no intention of sending so much as a nickel to the IRS, nor will we spend tens of thousands on lawyers/accountants to prove we owe the US no tax. If that means no more trips south, so be it.
@Arrow. I’ve considered it, really, but:
I have placed myself back into the US tax system; have applied for, obtained and travelled on a US passport; I have (oh so foolishly) voted (first and only time) in the 2008 election because of my naive idealism that “America Could Be Changed to a Respected Country” by change of its administration.
When FATCA comes to town, I don’t want my son’s Registered Disability Savings Account closed because he is an “accidental American”. I also don’t want my son subjected to any of this — AT ALL. I’m an easily intimidated retiree who doesn’t know how my life got so complicated. I want a simple life in my remaining time with my husband and I want to spend some of my time doing things of some value to society, not this. I don’t want to leave any of this mess as legacy to my children. I know that I’m playing it safe (I’d never be a good gambler), but it’s what I feel I have to do and I, fortunately, have some retirement savings that I can draw on to do this. Because I’m at the end of my savings years, with my RRSP, TFSA, defined benefit work pension and the house that I bought in 1991 in inflated real estate Calgary, I have to make sure, with the help of a tax lawyer that I have some confidence in, I am not being as a ‘covered person’ and then have to be taxed excessively on the capital gain in my personal residence and these savings I’ve worked so hard for — all for the Exit Tax I’d be then be subject to when I fill out IRS Form 8854.
When I am completely on the other side of this and my family is safe from all of this nonsense, I intend to better advocate for those who don’t have a voice — similar to those in the same situation as my adult “accidental American” son. In my gut I know I am not the only one in this situation. I want our Canadian government to help us their fellow Canadians who happen to be US persons. I continue to hope something is being done behind the scenes. In the meantime, I want to make sure I’m OUT.
Arrow, I should let Calgary reply for herself, but I think US border officials told her she must get US passport, which she did. DOS then considered she had reclaimed (or some such word) US citizenship. I think her accountant also told her she must file returns, including FBAR, etc, which got her back into the system.
So, that seems to make her situation different from ours. .
I hope I have those facts right, Calgary and that I haven’t confused folks further.
Why can’t anyone see the insanity of this? Where in the world is the common sense or compassion? Of wait, I forgot–this is the U.S. we are dealing with. There isn’t any. I truly believe if it was Canadian Foreign Affairs or CRA Calgary was dealing with, someone at some level by now would have stepped in to resolve it. Of course, these insane problems wouldn’t have developed in the first place!
How bizarre is this? Canadians on this website praise CRA for being reasonable, fair and professional. Other Canadians love to bash CRA, so they proabably think we’re nuts. In reality, CRA does not treat us as tax cheats, but respects us for diligently and faithfully payng our taxes. If we make a mistake, they accept it as a mistake and we pay what we owe. A few years ago, they found a mistake that worked to my credit and sent me payment immediately. What a difference!
Calgary, have you spoken to the Herald or CTV, CBC or Global about this? Or even New York Times. This needs attention now.
@Blaze, @Arrow
I have a small quote in the Calgary Herald piece, http://www.calgaryherald.com/business/crackdown+American+citizens+Calgary+scrambling/6071901/story.html. Yesterday I spoke for about 45 minutes with another wonderful journalist (that Petros put me in touch with) who is doing a piece on “Citizenship”. I admit that I am not brave, instead very gun shy to be totally out in the open before I feel more confident about resolution of my family’s situation. These journalists have respected where “I’m at”.
I also this morning sent an email to Calgary CBC Eye Opener as they had a piece on this subject. They cited another site as ” outragedcanadian.ca ” but I can’t get to it so must have jotted it down incorrectly. I’d like to converse with the person who was talking about her mom who came here decades ago (and is now in her 80’s). (I’m getting dangerously close to blowing my cover!)
If it helps, you can ask the journalist to not use your real name in the story. They are able to do that, as long as they state that. Or, they can just use a first name.
I don’t know if that would help or not, but your situation is such a nightmare, I don’t know how it could get any worse. Oops–again I need to remind myself this is US we’re dealing with.
Blaze: Thanks for that. I can see now how Calgary’s situation has been inadvertently worsened by a couple of steps she took. Isn’t it ironic that the people who end up in the deepest dodo are those who try hard to live a good honest life and follow the rules.
I’m now so furious at the US I can hardly see straight. But — Calgary’s story should be told, and if she’s willing to come forward I can see the NYT thinking it’s worth doing. There’s no question that the Calgary Herald would have a go at it — and the Herald is part of the Postmedia group, so their article would be available to the rest of the chain.
@Blaze and @Arrow.
Thanks. I really do appreciate your encouragement. I’m just not there yet. I am anxious to sometime soon see the piece by the second journalist I referred to, if my part is included, and I’ll rethink where I’m at after that.
In the meantime, I cannot tell you how much backbone the Isaac Brock site has given me. And the support is absolutely essential to so many of us — witness the comments above from Wowthissucks and Babbs (and how many others?).
And, our really don’t want this to be “my” story — I want this to be “our” story.
Not sure if this has been discussed elsewhere, but Hoang Mai seems to have submitted a written question about FATCA in the Canadian parliament last week. It’s on today’s Order Paper.
@Eric
Interesting. Very Interesting. I don’t know how quickly the government will respond back. Its good to see the issue is still alive. Perhaps this is the day I need to start my anti FATCA campaign on twitter. Look for #CDNPOLI(which is monitored by all the party strategists in Canada(I am pretty busy today so this may have to wait until tommorrow).
@ Eric, @Tim
We can thank Hoang Mai (NDP, Brossard-LaPrarie, QC) for his questions to Canadian Parliament: Hoang.Mai@parl.gc.ca
And, thanks Eric for finding this and Tim for acting upon it. I will too, with further emails to government representatives.
Specifically, his questions (and ours!) in in Eric’s link above are:
Q-4132 — January 26, 2012 — Mr. Mai (Brossard—La Prairie)
— With regard to the Canada Revenue Agency’s (CRA) response to the provisions of the Internal Revenue Service (IRS) regarding the Foreign Account Tax Compliance Act (FATCA):
(a) according to the government’s analysis, do the FATCA provisions comply with the provisions of the Convention Between Canada and the United States of America With Respect to Taxes on Income and on Capital and its amending Protocol (2007);
(b) how many citizens from the United States of America will be affected by FATCA,
(ii) are there specific Canadian exemptions to FATCA;
(c) has Canada negotiated with United States Treasury officials or the IRS following the announcement of FATCA provisions,
(i) at what time was the government made aware of these provisions,
(ii) how long did it take Canada to respond to the initial creation of FATCA and its implementation,
(iii) are there ongoing negotiations in this regard;
(d) will Canada inform dual citizens about FATCA and, if so,
(i) how,
(ii) at what time,
(iii) what department or agencies will be responsible;
(e) has the government conducted any studies or mandated a task force to look into how much FATCA will cost Canadians and, if so, what are the cost implications resulting from the additional regulations and demands,
(i) for the government,
(ii) for the CRA,
(iii) for Canadian banks,
(iv) who will absorb these costs,
(v) are there other types of non-financial costs such as efficiency or fairness reductions;
(f) which Canadian civil liberties associations or other types of association has the government met with to discuss the privacy implications of FATCA and what actions will the government undertake to protect the fundamental civil liberties of all Canadians in this regard;
(g) according to the government’s analysis, do the FATCA provisions comply with the provisions of the Privacy Act or the Personal Information Protection and Electronic Documents Act, and if so, which department undertook this assesment;
(h) in order to discuss the implications of FATCA, who within the government has met with
(i) Canadian banks,
(ii) other financial institutions,
(iii) insurance companies;
(i) how many complaints has the CRA received regarding FATCA,
(i) what are the main complaints,
(ii) what has the CRA done concerning these complaints,
(iii) what department at the CRA is in charge of dealing with complaints of this nature,
(iv) will the CRA cut Full-Time Equivalents from that department or reduce its funding,
(v) has the office of the Taxpayers’ Ombudsman looked into the matter;
(j) has Canada ever studied the development or implementation of a process similar to FATCA to improve tax compliance involving foreign financial assets and offshore accounts;
(k) who will be most affected by FATCA and have concerns been raised by entities such as, but not limited to,
(i) interests groups,
(ii) stakeholder groups,
(iii) hedge funds; and
(l) will FATCA affect different saving vehicles such as, but not limited to,
(i) Registered Retirement Savings Plans,
(ii) Registered Education Savings Plans,
(iii) Registered Disability Savings Plans,
(iv) Tax-Free Savings Accounts?
@ calgary411
Thank you, calgary for all your hard work with our issues. Your plight is particularly sad for me. I am faithfully following all of your posts.
I am not sure that this is where I should be asking this question. In a much earlier post, you stated that sometime after you had started to file U.S. tax returns and had applied for and received a U.S. Passport, that you were told by a Calgary immigration lawyer that: you should not have done so, as you had absolutely relinquished your U.S. citizenship when you became a Canadian.
And therefore, I assume by filing and applying for a U.S.passport, you had negated the “relinquishment”. Was this immigration lawyer telling you that had you not performed above actions, you would not be considered a U.S. person by the State Department and the I.R.S.? Or was he just saying in the eyes of Canadian law, you would not be considered a dual citizen but the Americans would still consider you “one of them” and therefore obligated to file?
Thanks, Calgary for any insight into above. Perhaps, since I received Cdn. citizenship in 1972 and have never shown any intent to keep my U.S. citizenship ie no tax returns, no U.S. Passport etc, I need to talk to your immigration lawyer.
Tiger:
You are wrestling with the same issues we are, regarding my wife’s relinquishment. My understanding, based on a conversation with an immigrations lawyer some months ago, is that an application for a CLN using reqlinquishment (rather than renouncing) has a good chance of working if you have had NO formal connections with the US since your expatriating act.
In my wife’s case, she gained Canadian citizenship in 1974, never had nor applied for a US passport, never lived or worked in the US (since 1969), and has made no application whatsoever for any US benefit. Of course, she has also never filed a US tax return since 1969.
All that supports her argument that she attained Canadian citizenship with the full intention of relinquishing her US citizenship, and if you can believe the regulations in the US INA, her application should be a slam-dunk. Oh — lawyer also said to swear out a statutory declaration stating what your intentions were at the time of the expatriating act, and submit that along with the form at the consulate appearance.
The problem is, the State department and the IRS are interpreting the rules to suit their goals. 40 years ago, their goals were to yank citizenship away from any “traitorous” person (e.g. draft dodgers) who had the gall to become a citizen in another country. Unfortunately for all of us, they were taken to court on that one in 1973 and they lost. Now, of course, their goal is to finance the astronomical US debt with whatever money they can suck out of ANYONE abroad who had the remotest connection to the US — so they will interpret the INA words in a way that magically reinstates all those expired citizenships back to about 1973.
Our dilemma is this: do you apply for the CLN, and put yourself squarely on the US radar screen (the State Department will forward your application to the IRS) and hope that they’ll give you the CLN regardless? Or do you stay below the radar screen and hope that fairness and common sense eventually make them fix this (the risk being, of course, that this will never happen).
I’m at the point where I think whatever way this goes, trips across the border will be be more and more risky as time goes on. If you get the CLN but the IRS still wants you to file tax returns, you’ll get nabbed at the border anyway (because eventually the IRS data base will be integrated into the border data base).
We are ready to go for the CLN (all the documents are now in order) but we will likely hold off making the appointment until I hear of someone who has done this within the last two years and got the CLN before they dealt with the IRS. There are several people on this site who are now in the process and I want to see how they fared.
@tiger
I know you have been on the Relinquishment and Renunciation of US citizenship thread here and that is where you can learn from what those in your circumstance are saying and deciding. There is a section on the Isaac Brock Forum, http://isaacbrockforum.com, where this is being discussed as well.
When I consulted with an immigration lawyer (well before I discovered the defunct part of the ExpatForum that discussed this and then became part of the Isaac Brock site), it was essentially to determine for me that I was not crazy, that I had indeed been warned when I took the Oath of Citizenship for Canada in 1975 that I would be relinquishing my US citizenship. Hearing confirmation of that, I proceeded on other avenues of what I should then do. At the same time by that lawyer, I was told that by my subsequent actions, I would have to renounce.
The next thing I wanted most to determine was just what do the instructions mean for Form 8854 – would I be subject to the Exit Tax?
Of course, I have since determined that I had not even mentioned to the CA doing my US taxes for the past three years that I had opened a Registered Disability Savings Plan for my adult son. As the US considers this a “foreign trust” as for Canada’s Registered Education Savings Plan, our Canadian Tax Free Savings Account, etc., I know that I have not filed the correct “foreign trust” IRS forms for my son’s RDSP, nor for my and my husband’s TFSA, although I did identify them on my Foreign Bank Account Reports (FBAR) and the TFSA on the US tax returns. With the help of a US tax lawyer, I am in the process of making necessary amendments for these years and when this is accomplished, I will rebook my appointment with the US Consulate to renounce my US citizenship.
You, though, have not taken the actions that I have (which the US considers my wish to have US citizenship – WRONG!), so I would say you have a better case for relinquishment. Do the “drudgery” and learn all you can so you can make the decision on next steps for yourself. No one should do as I’ve done – I’m the model of “here’s what happens if”. (I also have to determine the course of action for my son, an “accidental American”.)
I’m rooting for all of you smarter people who may be able to pursue relinquishment instead of renunciation!!!
@ arrow and @ calgary411
Thank you both for your posts above. It clarifies my situation. Arrow, I too worry that by applying for the CLN at consulate, I put myself on the IRS radar. I am getting my info together (have applied through “Access” for a copy of my citizenship file which should contain both the Oath of Allegiance to Queen plus the Oath of Renouncement to foreign state). Once I have that I will have to decide whether I want to apply for CLN. As I understand the U.S. State Department site, a copy of the CLN would not be sent to IRS until it is also sent to you. If so, an option is to get the CLN and then ignore any inquiries from IRS. In that case, the CLN would probably not be enough to get you across the border as the IRS would have you in the data base, but it should be enough to have your bank not treat you as a “U.S. person” under FATCA.
Thanks Tiger. Yes — I too wonder if the real value of the CLN will be in convincing banks not to send info to the IRS and to let me keep an account. But — since the IRS can ‘t reach across the border and steal money, maybe none of this really matters very much. We have absolutely no intention of dealing with the IRS. I suspect that if Canadian banks start closing accounts for people like us — who have been here as law-abiding, tax-paying citizens for more than 40 years — there’d be a news story or two written. I mean, there’s nearly a million of us here, right? That would create quite a media firestorm, and I’d be in there pouring gasoline on it.