FATCA compliant foreign financial institutions (FFIs), including Canadian banks and investment houses, are required to close “recalictrant” accounts or collect 30 percent Withholdable Payments made to Recalcitrant Account Holders or noncompliant FFIs.
Closing accounts would entail freezing them until arrangements are made for the disposition of the account, be it transfer or whatever, at which point 30 percent of the assets would be withheld and given to the IRS.
Now, I make the observation that FATCA is US, not Canadian, law, and that FATCA compliance is voluntary. In effect the FATCA compliant Canadian bank or other institution is purchasing access to US financial markets with the assets of account holders.
On the face of it, this appears to me actionable and would lead to perhaps the largest class-action law suits in Canadian history.
I wonder whether anyone has any thoughts on this.
@usxcanada
As to my most recent post discussing Canada’s political history and Brian Murloney I do have to recall the famous “Goodbye Charlie Brown” incident of Solange Denis. There is a video of it someplace I’ll try to find. I do agree on a media bomb strategy. I am trying to think of different ideas. I think something closer to July 4th might be a good time period. I do think if someone wanted to posting under #FATCA and #CDNPOLI on twitter that would be good idea.
@usxcanada & Blaze
I like your idea of “not messing with grannie”. I don’t think it can wait until July 4th. The FATCA regulations that were released on Feb.8th stated that they would hear comments until April 30, 2012. I think a march on Jacobson’s office and perhaps Flaherty’s office needs to be sooner rather than later. I fear that agreements with the U.S.A. will be in place by the end of the spring.
Any agreement with the US that requires changes in Canadian law requires parliamentary approval approval I don’t think they can get. I believe Flaherty is likely to send a strongly worded comment letter on the 30th of April to the US as he did with the Volcker rule unless sometype of agreement is reached before then which I don’t think is going to happen.
Here is a link to Flaherty’s most recent letter to Geithner. Lots of talk about extrateritoriallity.
http://www.fin.gc.ca/n12/data/12-016_1-eng.asp
@ saddened
I would be happy to talk to you by e-mail or even phone if that would help – I know it’s not easy to talk to people who aren’t involved in this nightmare because most people just think the situation couldn’t possibly be as bad as we know it is. Anyway I don’t know how to go about getting in touch by e-mail. Can someone help with that?
In the meantime, know that all of us on Brock understand what you’re going through.
@saddened and @hijacked2012
I know exactly what you both mean. I have noticed that my family and friends have started to look at me oddly (like maybe she is losing it!), as I go on my soapbox about this whole mess. I said this before, there has been great comfort in the IBS site.
Is there a way we could develop some kind of timeline here for who renounced, who relinquished, what consulate they went to, when they did it, when they got a CLN, etc. It’s very hard to keep track of who is doing what and when, and it would be nice to know, if and when CLN’s are issued, if there is any rhyme or reason to how long it takes and the positive or negative result.
Just a thought.
@hijacked 10.48 pm and @all
To get in touch with people by e-mail — if you join our forum site, isaacbrockforum.com you can send an e-mail or private message to any other member through the forum.
@hijacked
The idea of the timeline would be great. I am not sure how all of this works, as I have only posted on the site.But would it be possible to have a thread started where those who have already appeared at consulates could record place and date and any follow-up info.
@Tiger
Isn’t that a very limited window to submit a consultation on such a massive monster like FATCA? I would think that it would take many months and many trade and constitution lawyers, financial professionals, analysis by central bankers, and so on for a country to really understand the full impact of FATCA. Three months seems much too short for many to submit a detailed analysis or response. That being said, I am also hoping for Flaherty to submit something before the deadline – He seems like the last real force of resistance with any real chance of changing anything nowadays!
hijacked2012 and tiger – If the Brock crew sees merit in your suggestion –
some kind of timeline here for who renounced, who relinquished, what consulate they went to, when they did it, when they got a CLN, etc.
USxCanada InfoShop could offer (1) to host a distinct page for the data (2) to provide easy means of contact through the email address associated with the site – accessible on the site as a form (3) to structure and to update the information as required. Threads are good for back-and-forth communication, but not so good for information storage and retrieval.
Revising this older post again, as the Conservative government appears to be getting closer to signing an IGA, we will soon be at a point of commencing class action law suits.
I am wondering if there are any groups of people who are actively collecting names of people who are willing to join one (or more) law suits.
I think that one of the persons collecting names of people willing to join a class-action law suit would be Blaze on MapleSandbox, http://maplesandbox.ca/.
@WhiteKat
@Calgary
What is needed are people who are willing to act as a “representative plaintiff” meaning that this person’s name would be on the lawsuit.
@USCitizenAbroad,
Re: “representative plaintiff”, I have no idea how class action suits work. I thought the group would be the plaintiff, but from what you are saying apparently not.
What would make a good ‘representative plaintiff’? Someone not afraid of becoming known would be my first thought. Also, someone already ‘injured’ however you define that – everyone affected has been injured in some way.
Personally speaking, as I am still ‘hiding out’ and not intending to become compliant anytime soon (if ever), so from that perspective I would be very wary to be a ‘representative plaintiff’. On the other hand, I am as Canadian as someone can get(other than having a birthplace in USA) as I have Canadian born parents, was not schooled in US, and never worked there.
@WhiteKat, USCitizenAbroad,
Thanks, WhiteKat, for contacting Blaze. I think her detailed response on the subject (http://maplesandbox.ca/2013/whats-new/#comment-5916) is something we should all be aware of and stand up to support when / if the time comes.
Thanks, Blaze, for all of your work on this aspect (as well as tiger and somerfugal).
will the class action law suit address the violation of privacy rights of spouses who hold joint accounts with their US spouse? The need to report these accounts to the US treasury and if they don’t What about the criminalization of said Canadian spouse if they refuse to share info re the joint account??
@downtherabbithole,
If there is a need eventually for a class-action suit, it should definitely include all of the things we discuss here, including US inducing criminalization of our non-US spouses, along with criminalization of us! The list will be endless.
count me in then if money is needed. $1000 is cheap to maintain democracy and sovernty!
@downntherabbithole
$1000 pays for a tax accountant to do one year’s worth of US filing – if you are lucky. So yeah, definitely worth spending to be part of a class action lawsuit.
Also, like Calgary411 said, the list (of hurts) is endless.
The tough choice – $1000.00 to get in on a class action lawsuit, or $1000.00 to make sure that the family has a roof over their head or food. This is where the low-income US expats get shafted, yet again. 🙁
@WhiteKat
The “representative plaintiff” would likely have to have the following characteristics:
1. U.S. citizen or green card holder (it would be great to have a green card holder residing in Canada because it would emphasize that this goes way beyond the taxing of U.S. citizens) My gut feel is that having been “suspected of being a US person” is not good enough. The requirement to turn people over to the IRS exists only with respect to US persons.
2. Easier to get someone who is U.S. tax compliant to step up to the plate. The problem with a person who is NOT US tax compliant is that it is harder for them to argue that they have suffered a legal wrong (the law requires them to pay taxes). Plus a non-tax compilant person won’t want the attention.
3. Somebody who has been threatened by or suffered injury from FATCA. The injury would (I think) have to be the inability to obtain banking services or having an account actually closed.
4. Somebody who was willing to be the “public face” of the litigation. In other words, everybody knows who the person is.
The problem is that that a class action needs to be certified and there are rules that require the representative plaintiff to represent the class. I don’t know if a tax compliant person could really represent the interests of a person who is NOT tax compliant.
My guess is that this would exclude the vast vast majority of people. It might be harder to get a representative plaintiff than some think. My guess is that you are looking at retired person with no intention of ever returning to the US and who has tax treaty protection by virtue of Cdn citizenship. Also, it’s got to be somebody with the courage to live with this for a long long time.
Anyway, I am thinking out loud here. My point is that there is a lot of “leg work” to get this going.
Animal — if it’s a tough choice for your family, I will happily put in $2,000 (if the need arises for a class-action suit — $1,000 on behalf of your wife and $1,000 for me), especially that your son is another whose parents do not have the right to renounce on his behalf. I think that your family’s aspect of this absurdity of all this would be very important in a class-action suit.
@USCitiizenAbroad,
There are many people in varying situations who have done no wrong, yet are hurt by FATCA, which makes it difficult to determine the profile of the ideal ‘representative plaintiff’. This is a good thing in that it illuminates the unjustness and wide-reaching negative effects of this uni-lateral American law. In other words, ideal matters not. Lots of people are being burnt.
Regarding you points:
1. U.S. citizen or green card holder (it would be great to have a green card holder residing in Canada because it would emphasize that this goes way beyond the taxing of U.S. citizens) My gut feel is that having been “suspected of being a US person” is not good enough. The requirement to turn people over to the IRS exists only with respect to US persons.
What is a ‘US citizen’? I mean really, what does the term ‘citizen’ mean? I think that some green card holders are more ‘citizen-like’ than those who were actually born in the US (and thus legally considered to be ‘citizens’).
2. Easier to get someone who is U.S. tax compliant to step up to the plate. The problem with a person who is NOT US tax compliant is that it is harder for them to argue that they have suffered a legal wrong (the law requires them to pay taxes). Plus a non-tax compilant person won’t want the attention.
For sure, non-compliant ‘citizens’ will want to take a back seat. I am one, so I get this. On the other hand, non-tax compliant citizens/greencard holders/us persons in some ways have the most to lose. These are the people whose lives have been turned upside down, people who thought they were living a law-abiding life, who suddenly find that according to the US (and apparently Canada as a signed IGA appears forthcoming) are not.
3. Somebody who has been threatened by or suffered injury from FATCA. The injury would (I think) have to be the inability to obtain banking services or having an account actually closed.
I lived 50 years totally in the dark about US citizen-ship based taxation. Finding out at this point in my life has been a HUGE injury. I would have renounced years ago if I had known about this. Why did I not know? I am not uneducated. I am not illiterate. Why has this come out of nowhere at a point where my children are almost grown and my husband and I are getting close to retirement? Why am I faced with deciding between hiding like a criminal (which I am NOT) versus entering an amnesty program (designed for criminals) which is going to cost my family not just dollars to prepare the paperwork, but also risks potential penalties, involves big headaches to gather the data the US wants, wipes out years of financial planning (worthless RESPs, Canadian mutual funds, etc), threatens our family privacy, and never ends unless and until I renounce? That is hurt!!
4. Somebody who was willing to be the “public face” of the litigation. In other words, everybody knows who the person is.
Agreed. This is why the ‘ideal representative’ is important. The public needs to be able to identify with the unjustness. The more obviously unjust, the better.
You said: The problem is that that a class action needs to be certified and there are rules that require the representative plaintiff to represent the class. I don’t know if a tax compliant person could really represent the interests of a person who is NOT tax compliant.
I am not sure what you are saying here. Are you saying that only a non-tax-compliant person could be the best ‘representative person’? Like I said before, so many people are hurt by an IGA and FATCA; it will be EASY to find a ‘representative person’. This makes me wonder, can there not be more than ONE representative person?
You said: My guess is that this would exclude the vast vast majority of people. It might be harder to get a representative plaintiff than some think. My guess is that you are looking at retired person with no intention of ever returning to the US and who has tax treaty protection by virtue of Cdn citizenship. Also, it’s got to be somebody with the courage to live with this for a long long time.
I think that there will be a lot of volunteers from which to pick. There are too many people affected by this. Maybe the representative won’t be the ‘perfect’ one, but perfect enough.
3. Somebody who has been threatened by or suffered injury from FATCA. The injury would (I think) have to be the inability to obtain banking services or having an account actually closed.
4. Somebody who was willing to be the “public face” of the litigation. In other words, everybody knows who the person is.
The problem is that that a class action needs to be certified and there are rules that require the representative plaintiff to represent the class. I don’t know if a tax compliant person could really represent the interests of a person who is NOT tax compliant.
My guess is that this would exclude the vast vast majority of people. It might be harder to get a representative plaintiff than some think. My guess is that you are looking at retired person with no intention of ever returning to the US and who has tax treaty protection by virtue of Cdn citizenship. Also, it’s got to be somebody with the courage to live with this for a long long time.
Anyway, I am thinking out loud here. My point is that there is a lot of “leg work” to get this going.
calgary411 says
We definitely need an edit function on this site. It is so frustrating to post something, think you have it right, then reread it and find a bunch of stuff at the end from too many copy/pastes that is still there…kind of destroys the message….just sayin.