Some of you are aware that I wrote to each of Canada’s MP’s expressing my concerns regarding FATCA. I’ve heard back from a few, but most importantly from my own MP, John Weston, a member of the Conservative Party and designated by Minister Flaherty to look into matters concerning US citizens in Canada. Many of us have been anxiously waiting for some indication of the stance our government will take on FATCA. I believe that we now have one:
Thank you for your letter. I share your concerns about the IRS’s actions in pursuing Canadians who also have US Citizenship.
I have taken the initiative among Government Caucus members to consolidate information concerning this matter and have worked closely with the Honourable Jim Flaherty, our Minister of Finance, who has taken our concerns forward effectively. Among other things, I arranged for prominent US tax attorney Mark Matthews to come to Ottawa on May 30, 2012 to brief Caucus members concerning these matters. Mr. Matthews not only works with Canadians who have US tax problems but he also served previously as Deputy Commissioner at the IRS.
Concerning the Foreign Bank Account Regulations (“FBAR”) matter, the IRS issued a directive in December 2011, “reviewed or updated June 13, 2012”, that appeared to acknowledge these concerns. You can find the IRS Directive [here].
However, as you will see in Minister Flaherty’s statements, which I have enclosed, you will see there is still considerable uncertainty. I join the Minister in recommending that you take US tax advice before making decisions on how to proceed.
Foreign Account Tax Compliance Act (“FACTA”)
Concerning the FACTA matter,
- FATCA has far-reaching implications as it would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians
- Since the beginning of last year, we have raised serious concerns directly with the US
- We strongly believe this is unwarranted
- Canada is not a tax haven and we already have joint arrangements in place to prevent tax evasion
- We strongly believe rigidly imposing FATCA on our citizens and institutions would not accomplish anything except waste resources on all sides.
- While we’re pleased the US has taken note of concerns we’ve expressed on behalf of Canadians by delaying FATCA’s implementation until 2014, clearly this only a first step
- As such, we have and will continue to express our strong concerns relating to FATCA with the U.S. government
- We are actively seeking a solution both countries will find agreeable
I wish you success and peace in resolving how to deal with the IRS. I will continue to work on your behalf and with Minister Flaherty to try to bring this situation to a more satisfactory conclusion for all Canadians.
I think we have cause for encouragement that the Canadian government will not just roll over. I also like how Mr Weston has the sensitivity to not refer to us as “duals”. If anyone would like me to post Minister Flaherty’s statements I will, but I believe many of us are already aware of their contents.