I’m increasingly concerned about how FATCA is affecting people on a personal level. I’ve again written to Jim Flaherty to try to appeal to him to act now because of the toll this is taking on Canadian citizens and residents.
Here’s my e-mail Subject: FATCA: Canadians Are Desperate. We Need Your Help Now!
Do you realize Canadian citizens and residents (who the US is trying to claim as “US persons”) are anxious, distraught and desperate about planned FATCA intrusion into their private financial affairs and lives in Canada?
My own personal experiences, conversations with others and social networking have shown me FATCA is seriously affecting finances, health, jobs, careers, marriages, family and personal relationships, businesses, and voluntarism of Canadians in Canada.
I very much appreciate your response to my letters to you and the fact you are “actively seeking a solution that both countries will find acceptable.” In the meantime, Canadians of American origin are living this nightmare and need this resolved now..
I am contacting you on this more personal level because I am aware of two senior women who have recently reported suicidal thoughts due to IRS expectations. I suspect they are not alone.
Many others are reporting sleepless nights, strained marriages, panic attacks, health challenges, worry about Canadian born children and difficulties at work or finding employment. . .
I realize you may be making attempts through diplomatic channels to address this issue. I also am aware you have said publicly that CRA will not collect any penalty owing by a Canadian citizen or resident for failure to file an FBAR. You have also said CRA will not collect any tax liability for the IRS on a Canadian citizen if that person was Canadian at the time of the liability.
But, US attempts to bully Canadian financial institutions into reporting on savings and investments of “US persons” is causing phenomenal stress on myriad of Canadians who had the misfortune to be born in the US or to be born in Canada to a parent born in US.
Many of us were told decades ago that we were renouncing US citizenship by becoming Canadian. I was personally told that four decades ago. Another woman was told that six decades ago.
Your efforts are respected and appreciated by Canadians of American origin or ancestry.
However, we need you to clearly, firmly and publicly tell both Canadian financial institutions and the US government that Canadian citizens and residents of US origin or ancestry have the same legal rights to privacy in financial matters as all other Canadians. We need you to further strongly advise financial institutions they cannot violate Canadian law to satisfy the demands of a foreign government.
And, we need you to tell Canadians of American origin that Canadian government will not allow Canadian financial institutions to violate their rights to manage their financial affairs and investments in privacy and with confidence.
Finally, we need your assurance Canadian law will not be changed to accommodate the demands of a foreign government.
Our Canadian citizenship certificates say we are “entitled to all the rights and privileges and (are) subject to all the responsibilities, obligations and duties of a Canadian citizen.”
Most of us have worked, earned a living, saved, invested, raised families, owned homes, volunteered, contributed, been active in our communities, voted and paid taxes in Canada—many for decades.
I hope you will immediately see the urgency of this situation and make a public statement to ensure our rights as Canadians are protected and enforced. .
The Americans are instilling terror in their former and present citizens living in Canada and around the world. In this way, they are no different than Eritrea, which was sanctioned at the UN–including by the United States.
We need you to tell the Americans: “Canada does not negotiate with financial terrorists”
Mr. Flaherty, Please Act Now!
@Petros, very eloquent! Might I suggest you send it also to Leona Aglukkaq, minister of health? I am in the process of writing a similar letter to her, but focusing on the health and cost to our health system.
@outragec: It was actually my letter, not Petros. Good suggestion about Leona Aglukkaq. I sent it to some of the NDP, Bob Rae and Elizabeth Mae.
I will send it on to Aglukkaq, but my experience with her on another issue has not been impressive in the least.
@Blaze, I apologize, wrote the wrong name! I’m sorry to hear about your prior experience. Although I didn’t have much hope she’d take a stand on our behalf, now my hopes are further reduced. However, I’m still going to write her. I’m still so darn mad about all this that I feel like I could/should write every darn member of our government!
Citizenship based taxation should really be illegal internationally, that’s why almost no other country in the world does it but the United States.
I’m wondering if Canada should issue a Cease and Desist letter to the United States on behalf of all Canadian citizens who are caught up in this mess.
I had a person harrassing me a long time ago claiming he had a right to income from my business even though he had nothing to do with it. My lawyer said all I needed to do was get a Cease and Desist letter to make him stop. I decided to get call blocking instead.
There are people out there who think they have a right to your money when morally they do not. The IRS is in this category and they need to be stopped the way you would any thug through the legal system.
Is there such a thing as an international Cease and Desist Order?
@Blaze, Excellent Letter!! Thank you for sending it..We all appreciate it!
@Blaze, Didn’t he also say Canadian Resident as well as Canadian Citizen.. I am hoping!
Saddened: Mr. Flaherty said the same thing to me in his March 6 reply as he has said elsewhere:
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“Please be aware, we have also been clear that penalties imposed by the IRS under FBAR will not be collected by the Canada Revenue Agency (CRA) on their behalf. While the Canada-United Sates Income Tax Convention contains a provision that allows for the collection by a country of taxes imposed by the other country, this does not apply to penalties imposed under laws that impose only a reporting requirement. Furthermore, the CRA does not and will not collect the US tax liability f a Canadian citizen if the individual was a Canadian citizen at the time the liability arose (whether or nor the individual was also a U.S, citizen at that time.”
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My understanding of this is that CRA will not collect penalties or fines owning for failure to file FBAR forms of either Canadian citizens or residents. They will not collect taxes owed for a Canadian citizen, but a resident may not have that latter protection.
Saddened, before you panic, it,s probably unlikely that you owe any U.S. income tax, therefore, there would be nothing for CRA to collect. They will NOT collect penalties for failure to file FBARs, whether you are a citizen or resident.
In terms of FATCA, Mr. Flaherty said
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“A related piece of U.S. legislation causing similar concern is FATCA, which is proposed to come into force on January 1, 2014.
“To be clear, Canada respects the sovereign right of the U.S. to determine its own tax legislation and its efforts to combat tax evasion–the underlying objective of FATCA. In fact, our two jurisdictions co-operate to prevent tax evasion.
But FATCA has far-reaching extraterritorial implications, as it would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians.
We strongly believe this is unwarranted. Canada is not a tax haven and people do not flock to Canada to avoid paying taxes. In addition, we have existing ways of addressing these issues with the U.S. through our bilateral Tax Information Exchange Agreement. We strongly believe that to impose FATCA on our citizens and financial institutions would not accomplish anything except waste resources on all sides.
As such, the Government of Canada has and will continue to express its strong concerns relating to FATCA with the U.S. government. We are actively seeking a solution that both countries will find agreeable.”
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Saddened: Presently Canada’s Bank Act does not allow Canadian financial institutions to request information about citizenship or place of birth. Therefore, there is no reason for your bank (or anyone else’s Canadian bank!) to be aware that you were born in U.S. In addition, current privacy laws prevent them from releasing personal financial information to a foreign government (or anyone else!) without your consent. The one exception, of course, is they report on money you contribute to registered plans (RRSPs, RESPs, TFSAs, RDSPs) and income you earn to CRA.
No one in the government has indicated they have any interest in changing Canadian law to allow banks to gather information about place of birth and report to a foreign government. Considering the large number of Canadians of American origin throughout Canada and how Canadians of all backgrounds love politicians who stand up to Americans, I personally think it would be political suicide for the government to change the law to make the Americans happy.
If, however, the government does change Canada Bank Act and Privacy Act, we may then have grounds for a lawsuit, depending on what the change is. If government doesn’t change the law, but banks decide to comply with FATCA in contravention of Canada’s Bank Act and Privacy Act, that is when we may have grounds for a lawsuit against the banks.
The huge issue will be if Canadian government agrees with US suggestion that our banks report to CRA, which in return would report to IRS. So far, we haven’t seen much interest from Flaherty in that arrangement, but we have no way of knowing what “seeking a solution” means.
Even so, CRA gathering and reporting such information, would require a change in law to allow banks to ask for place of birth. Otherwise, as I understand it, they would be violating existing law to ask for that information.
Saddened, do you have reason to travel to U.S.? If not, I would just stay on this side of the borders, remain calm and enjoy life in Canada. If you do travel to U.S., is it likely the border official is going to pull over a senior woman and demand to see your tax returns and FBAR?
I know you have applied for Canadian citizenship and you should have it by the time banks are required to report (January 1, 2014). Even if you don’t have citizenship by then, as a permanent resident of Canada, you have the same rights and protection under Canada’s Bank Act and Privacy Act as other Canadians.
Whew! That’s a very long answer to what was a Yes or No question! I hope all of the information I have given is accurate. If anyone thinks it’s wrong or incomplete, please feel free to correct or add whatever information you may have.
@Blaze, Bless your Heart I didn’t mean for you to have to write such a long reply..Thank you very much!!
I am always in a Panic lately it seems!! I got to calm down I know..Thanks for your time Blaze!!
I agree. On this side of the border, its like being in Australia. Nobody is going to come after you, arrest you, or take your money.
@Blaze
Wonderful letter to James Flaherty, Blaze. We all want answers sooner rather than later and of course, we want the “right” answers. At least we know that Mr. Flaherty, at this point, is not just “rolling over” for the Americans. I suspect the 5 EU countries did “roll over”.
@saddened123 – my personal experience is that it’s going to take some time, and I still have days when I swing from panic to being fine. When I start getting anxious I come on here and start re-reading these heartfelt letters and posts and rediscover those nuggets of information that ease my panic. I’ve been dealing with this only for about 6 weeks, unlike some people who have lived with this for years, but every day I get a bit better. Personally, for me, what helps is to do what I can – writing letters, trying to educate anyone who shows any interest in the situation, trying to get Canadians who don’t have to deal with this to write letters in support and to bolster our case. Hang in there, calm is attainable, I truly believe that. Yes, it’s a nightmare, but you are absolutely not alone and there are a lot of people working on this.
@outragec: You’re Canadian, right? Based on that, CRA won’t collect any tax liability that you may have. Nor will they collect FBAR penalties for simply not filing a form.
Is it you who has a mother who was a Justice of the Peace in Canada? How is she doing now? Do you personally have a need to go across the border?
P.S. to outragec: Were you born in Canada to a parent born in U.S. or were you born in U.S?
@Blaze, yes not only did she become a citizen in the 70’s but also took the oath again to become a justice of the peace a year later. That should put her solidly into the Canadian-only category – however, she is still filing because it’s the LAW. We just can’t get her to listen to us. She lives in a constant state of near panic because of the potential penalties, and frankly, her already poor health is failing much faster than it was before all of this. Her only way to deal with it, for her, is to become compliant immediately and just not talk about it. Me, I was born in the states to US parents, we moved up here when I was 6, and I became a Canadian citizen at 16 as a minor (hence my ongoing bit anxiety that my relinquishment won’t count, but I’m working on that). I am absolutely counting on no collection by the CRA. My biggest fear is down the road, what could potentially happen to us non-compliant people. I worry about my credit rating and ability to keep my house, for example. Or how all of this is going to play out with the huge intermingling of Canadian banks and US bullying. My fear is that FATCA is just step 1. Anyway, they’re not HUGE fears, but just a constant niggling that I just don’t know what the repercussions may be…
@Outragec, Thank you for the kind words. I have always been the type that worries about every little thing. It is a terrible way to be, but it is just the way I am.. But this stuff puts me over the top, I guess because of the unknown, not knowing what will happen next. I have bad days, and sleepless nite’s. It has gotten alittle easier but such a pain in A@@!!
Outragec, I think our mother is safely out of the US system. The huge mistake she’s making is by filing she’s bringing herself back into the system when there is absolutely no need. By filing she’s actually reclaiming her US citizenship when it is likely already lost. Any competent and ethical lawyer would tell her not to do it.
Sorry meant to say your mother.
@omg.. it pains me beyond belief that she’s doing this, but really it comes down to which has the most negative impact on her health – filing and hoping for the best re: penalties, or having her children tell her she’s no longer competent to handle her own affairs which is likely what it would come down to. I never thought about the lawyer angle though, maybe I can jump on that, it would absolutely be worth the money to get a legal opinion if I can get it before her files actually get submitted
@Blaze – oh, and I forgot to say – I have no reason to ever go to the US again, nor do I ever intend to, no matter how this turns out. I used to take an occasional vacation down there, but no longer. I’m also trying to winnow out the US companies that I was unthinkingly supporting. I choose local coffee shops now (Second Cup, not Starbucks). I know it’s a pathetically tiny protest, but it FEELS good to do it….
Outragec said: “She lives in a constant state of near panic because of the potential penalties, and frankly, her already poor health is failing much faster than it was before all of this. Her only way to deal with it, for her, is to become compliant immediately and just not talk about it.”
I think she’s suffering from panic attacks. When I was having them I tried to do all sorts of stupid things like redo my will etc. After I got medicated I realized what a dumb idea that was. Maybe she needs to see a doctor and get medication for anxiety before she ruins her life by filing US tax returns.
@omg… believe it or not she IS on anti-anxiety medication, it’s the only way she makes it through the day. Thank you for your support and comments in this, it gives me renewed energy for trying to convince her that it will, indeed ruin her life, if she files. She is of another generation and mind-set, gov’t is always right! It’s hard to fight.
When I went on anti-anxiety meds they worked fine for a while but later they had the opposite effect and I became even more anxious.
Boy I’m going to get real personal here… but I want to try to help.
My psychiatrist decided that in addition to Ativan I also needed an anti-depressant that really helped with anxiety as well. Having taken anti-depressants in the past with no success I was hesitant but took them because I had alot of faith in this particular psychiatrist. He put me on a mild dose of Ativan (1 mg a day) and 30mg a day of Remeron. Remeron is a very cool anti-depressant, it really helps with anxiety and makes it easy to get to sleep at night.
I’ve offered way too much personal info here but I wanted to let you know that your mother can find peace if she has the right meds. Her personality sounds alot like mine.
I think your mother sounds like a normally intelligent person whose anxiety has got her into overdrive and she is about to do some things she will really regret.
You should try to find an experienced (preferably older) lawyer who she will listen to. It’s probably also a good idea to see if she needs a different type of medication than what she is taking.
Do whatever you can to keep her from filing those tax returns because if she is in fact not a US citizen, it’s the worst thing she can do.
@outrage: She’s can show she is not still a US citizen based on when she became Canadian and probably based on her position as J.P!!! Is there anything I can do to help? Would it help that I am closer in age to her than you are? I’m sure Tiger would be willing to help too (I missed my calling–I should have been a Volunteer Coordinator. I’m really good at volunteering other people for things!)
If she files, she is reclaiming her U.S. citizenship and then she may be caught up in the nightmare Calgary411 is in.
Would it help her if she formally relinquished and got a CLN backdated to the date she expatriated? Would she feel more comfortable about the IRS then? If she files income tax returns, she will have to renounce rather than relinquish.
Is she planning to file FBARs? That could be a disaster. I hope she’s not planning to go into OVDP.
CRA will not collect anything for IRS on her behalf. Does she have a need to go to U.S.?
As much as we worry about FATCA, reporting is still two years away and I don’t see any sign that Flaherty is going to capitulate easily. (I hope I’m right about that!).
@/Blaze: Excellent letter. I hope you get an appropriate response.
@omghe’sstillanamerican: I agree totally. Citizenship based taxation should be illegal. The cease and desist letter is a great idea. I don’t understand why the rest of the world is not pressuring the US to put a stop to this ridiculous US law.
My husband was born in Denmark, but has been a Canadian citizen for decades. if Denmark was like the USA, my Canadian- born daughters would have to file Danish, US and Canadian income taxes (There was a post about this on this site with they mythical guy who had to file with several countries if all countries had citizenship based taxation.)
@omg, thank you so much for sharing your personal story so openly, I can’t tell you how much I appreciate it. I will raise this with her (delicately – doctors are also demi-gods, you know :)). Perhaps her anxiety has gotten worse but she’s not mentioning it, and perhaps a change of medication would help. And I really like the idea of an older lawyer. And yes, she is a very intelligent person, which is why we’re maybe a little frustrated in dealing with her on this.
@Blaze, oh yes, the full meal deal. fbar’s as well. I know, I know. I am going to cut and paste all of your comments into an email to my brother, he’s the only one, I think, that has a chance to get her to listen, because he’s the male and his opinion carries a bit more weight. With her poor health she couldn’t go down to the US again anyway. I so very much appreciate your offer of help, I’m going to get a confab going with my siblings to see if we can find a way to get her to listen (if it’s not too late).
Again, thank you Blaze and OMG, I can’t say that enough.
Well done, Blaze! I believe your subject line goes right to the heart of the matter: “Canadians are desperate!” I’m sure Mr. Flaherty has received many letters by now, including my own (written over a month ago) making respectful pleas for him and the Canadian government to do the right thing about FATCA and the other related issues we’re dealing with. I am still waiting for a response to my letter and am hoping that the time lag in receiving a response means that he has been inundated with similar letters and he and his staff are giving thoughtful consideration not only to what to say to us, but to what stand they must take with the U.S. on this issue. I do hope and suspect that there are serious negotiations going on now behind the scenes.
Your letter points out some of the raw details of how U.S./Canadian citizens and residents are being affected on a very personal, daily basis and it should help clarify to our government that it is time to focus on the immediacy of the problems that are taking their toll on those affected and that there is no time to waste.
In fact, our government may be talking to the wrong people. Perhaps Canada and all the rest of the governments of the world should be conferring right now about how they as a solid force should be responding to the U.S. Government on the FATCA issue. If they all agreed, they could provide a powerful message in one loud and clear voice, “No thank you!”