Posted on June 9, 2012 by Just Me Posted in Issues regarding US persons abroad 35 Comments Thanks to the International Revenue Service, there is now a new service you can subscribe to to get the latest instructions on what you are supposed to do to be GATCA compliant. We are reaching out to you! Subscribe here. Share this:TwitterFacebookEmailLike this:Like Loading...
@just me…I just subscribed. Understandably there may be some of us who won’t, so I suppose those of us who receive notices should repost them here for everyone’s viewing pleasure.
It is a sharing world! I subscribed too. Now you know the source of all those journalist scribe stories. Cut and paste from the press release! 🙂
@just me, excellent. Thanks.
Does anyone know what the IRS is dictating to the FFI’s what they consider ‘indicia’ or is that to be revealed when the final regulations are released?
I found some speculation here as to what FFI’s will need to do, but there are more questions than answers.
click next chapter about vetting new customers. I don’t see any mention of how the banks will check for US citizens born outside the US. How would they know short of asking for the customer’s parents birth certificates or proof that they never were naturalized in the US? It’s not stated otherwise that it will be sufficient to use existing customer files, but I would think that the IRS would expect more in order to satisfy them that no US persons are getting away without detection.
On page 8, of this document, is a flow chart showing what
indicia might be used. Note: it is over a year old, so I am not sure that this is relevant to either the draft regulations and who knows what the final will have, but it gives you an idea of the thinking then. They speak of strong (US citizenship), medium (born in the US or customer address there) and weak (e.g. standing order to the US or submission of instructions from the US) indicia, but don’t really define any of them further that I can see. I do not see an indicia that implies accidental Americans (someone born outside the US but to US citizen parents.) Maybe it is left up to the FFI? I am not sure.
Of note: Any accounts with no such indicia can be classified in the interim as non-US accounts, but according to the current state of knowledge they have to be reidentified by 2017 (“repapering”).
@justme, thank you for the link. The absence of evidence is not evidence of absence. Isn’t it a fatal flaw to FATCA that some who are just as much as a US citizen as I am, because of a lack of indicia will be allow to fly under the radar? It makes a sham of the whole program, and sacrificial lambs of those who are overtly US citizens if there is not an infallable way of detecting ALL US persons.
@bubblebustin, from February:
For this purpose, U.S. indicia include: (1) identification of an account holder as a U.S. person; (2) a U.S. place of birth; (3) a U.S. address; (4) a U.S. telephone number; (5) standing instructions to transfer funds to an account maintained in the United States; (6) a power of attorney or signatory authority granted to a person with a U.S. address; or (7) a U.S. “in-care-of” or “hold mail” address that is the sole address the FFI has identified for the account holder.
@outraged, thank you, but this will not detect all US persons. Personally, being outed is not my issue as our banker already knows we are US persons and we are working on compliance. I guess we’ll have to wait for the final regs to see how serious the IRS will be in flushing out all US persons. It is SHAMEFUL that the US government is offloading and outsourcing their compliance enforcement and take no responsibility for their lack of effort in facilitating compliance.
@Bubblebustin, You’re right, for those that were born outside of the US and inherited US citizenship through their parents, I don’t see how they can be ‘caught’ by the banks. For anyone born in the US, I think they are relying on the new account process, where every single person will have to prove they are not a US person. I do think that when banks start asking every single Canadian who wants to open an account if they were born in the US, or if they are a US citizen, that’s when there will be a public outcry by Canadians who have no ties to the US and it will hit the public consciousness. Or maybe that’s just my naive hope. FATCA says that banks will have to withhold 30% US source income on anyone who does not prove they are not a US person, whether they have US indicia or not. If that actually happens I think the fur will fly.
*Regs state that for balances less than $1,000,000 only electronic searches of existing documentation will be done.
@Joe Smith, perhaps I’m reading the regs wrong, but I didn’t think that was true for new accounts.?? I hope I’m wrong…
@Joe Smith, also, now I’m concerned that I’m reading the wrong regs. I’m following links that say they are the revised as of February 2012, and in those, they say that it’s only a manual search required above $1M for individual existing accounts. $50,000 or less, no search is required, from > $50k to $1M, then an electronic search. Can you provide me with the a link that says specifically searchs only over $1M? I read they raised the limit to $250K for entity accounts, which I interpret as not being a personal/individual account.
*I used this link from above..see XX below…
I am focusing on the up to $1,000,000 and since my credit union says it has me on record as a Canadian with no paper record of me being anything else, I rest easy, though I will never be crossing the border again, which I hardly did anyway.
[I cannot imagine that Canadian authorities will allow the sending of Canadian citizens’ bank information to the USA. It is just inconceivable to me.]
XX. On page 8, of this document, is a flow chart showing what
indicia might be used. Note: it is over a year old, so I am not sure that this is relevant to either the draft regulations and who knows what the final will have, but it gives you an idea of the thinking then.
@ outraged and Joe Smith,
This is Roy Berg’s take on it and may help, from Moodys Tax Blog, http://www.moodystax.com/blog/21-us-taxation-services/143-new-regulations-clarify-how-non-us-banks-will-find-and-report-us-customers-to-irs.html
I guess the point I’m trying to make is that to have a program that is inadequate in being able to identify all US persons is, is…discriminatory? ineffective? token, for lack of a better word?
I’m sure that there are many millionaires born in Canada of US born parents who aren’t filing their US taxes. It would be like invading Iraq but not checking every spider hole.
Yes, you are right. The only fair way is a complete real one-time amnesty for those who want it — as Petros so eloquently puts it, getting our asses and our assets out of the US in all ways — if that is what we want.
If we want to retain a dual and whatever else US citizenship, fine — but then, going forward, those choosing that path need to be advised of and held to their responsibilities of their wanted US citizenship.
I do not want US citizenship; I do not want US citizenship for my (developmentally delayed) son. US citizenship in no way has benefit for me or my family; quite the contrary. I would like to be able to visit the US, but I can forego that for real freedom from all this wasted energy for little benefit to anyone.
I hope no one misreads what I’m saying here. I don’t wish ANYONE to be subjected to the aim of the IRS through FATCA, unless one is of course a whale. Emphasizing how FATCA is of token value in exposing all US persons is to expose it as unworkable, a sham.
I don’t think that anyone here wishes that, bubblebustin. What we wish is common sense and a way to get where we need to be, without so many friggin’ Just Me-defined LCU’s, an utter waste of our health, our savings, our opportunity to do things of worth in the countries we now reside in.
Amen. Would I have been happier if I took one of the other options suggested by my lawyer, to ‘do nothing’, to be an ostrich? Somehow I doubt it. Outing myself has allowed me to raise my voice. If there are those who’d like me to speak on their behalf, I’d be happy to do so in my name, as long at it doesn’t land me on a no-fly list 🙂
I’m sorry I’m not ready to post in my own name, but some of you already know who I am. I still have a bit of business to deal with before that can happen.
Oldie, but still entirely accurate…http://www.theglobeandmail.com/commentary/help-im-on-the-irs-hit-list/article627365/comments/
6:36 AM on September 20, 2011
My aunt was born in US, but lived in Canada as a Canadian citizen most of her 60+ years. She was scared of being arrested by American agents or losing much of her retirement savings to this US cash grab. I made it my research project and read case law, the tax treaty, and reports from international tax firms. I learned:
– US has no power in Canada to collect taxes, take wages, or seize Canadian bank accounts. These are “extra-jurisdictional” tax claims, very difficult to collect, and our courts favored Canadian defendants.
– in 2006, less than 40,000 US people in Canada filed US tax returns. In 2006 there were maybe 600,000 of them here.
– Under Tax Treaty, Canada Revenue cannot collect US tax from Canadian citizens born in US, unless the claim was from before they became a citizens. And CRA told Don Cayo at Vancouver Sun they would not collect any US bank reporting penalties.
– My aunt’s bank has no record of her US birth. Treating a Canadian bank customer differently because they were born in the US is discriminating based upon “nationality or origin”. This violates our Charter and Human Rights law. Sending customer bank records to a foreign state, or closing an account because of where they were born, is discriminatory.
It’s sad that the US – 14 trillion in debt and borrowing money madly to keep the lights on – wants part of my aunt’s life savings. They can’t tax billionaires and GE, so now they want her money! Sadly, she will never vacation or visit the US again. Considering all the guns and how things are falling apart there that’s OK with me 🙂
Also a relevant comment:
8:42 AM on May 9, 2012
the Canadian government render US-born Canadians second-class citizens
in their own country? This violates the Charter of Rights and Freedoms
and Human Rights Act, along with well-established principles of
sovereignty, Canadian bank laws, and Canadian court judgments regarding
banking and foreign tax revenue claims.
enforcement of the foreign law FATCA would adversely affect US-born
Canadian citizens who earn, bank and invest solely in Canada – long-term
Canadian taxpayers with no US economic ties or presence. This includes
Canadians who were simply born there while parents were visiting, or
through cross-border hospital arrangements, and Canadian-born children
of US-born Canadians.
If Canadian financial institutions, with
the complicity of the Canadian government, single out certain customers
by birthplace, irrespective of actual economic activity, location of
assets, residence or physical presence, it’s discrimination based on
nationality or ethnic origin. And it exposes these individuals to harm.
Canadians born in the US have no exemption from Canadian law. All
Canadians are equal under law, regardless of place of birth.
be clear. Whether this involves our banks getting away with a
soft-pedaled, half-hearted, less-than-diligent electronic search for US
birthplace… or tagging US-born Canadians with a red, white and blue star
on their garments… the principle is the same.
When I wanted to get out of US equities my investor person figured out that I was a “Us person” and said that he would be reporting me to the IRS. Of course I moved my money out of there – but the next financial person asked specifically about being a dual citizen. It is hard to get away from it now. I can’t wait to relinquish!!!!!!!!!
I actually met financial advisor today who dropped by in the company of a friend, works for Dundee Securities and says they’ve been asking clients for some time what their nationalities are when opening accounts.
That must be under the existing Know Your Customer rules. (KYC). But he isn’t asking for place of birth, is he? Or digging hard to assertion that you are NOT a US person.