The exact text is:
NEGOTIATION OF AN INFORMATION EXCHANGE AGREEMENT WITH THE UNITED STATES
November 8, 2012
Negotiations are being held between Canada and the United States on an agreement to improve cross-border tax compliance through enhanced information exchange under the Canada-United States Tax Convention, including information exchange in support of the provisions enacted by the United States commonly known as the Foreign Account Tax Compliance Act (FATCA).
The purpose of this bulletin is to inform persons whose interests are affected by the provisions of FATCA that the Government is actively seeking a solution to issues raised by such provisions. The Government of Canada has received input from many individuals and groups in relation to the implications of FATCA.
Persons wishing to offer additional comments concerning the negotiations may send their views to:
Department of Finance
17th Floor, East Tower
140 O’Connor Street
Ottawa, Canada
K1A 0G5For further information contact:
Kevin Shoom
Business Income Tax Division
613-992-2980
I strongly suggest that the Isaac Brock Society make a formal submission. I am happy to volunteer my contribution to this – and I hope others will too. I note the following comment on this topic by Jim Jatras.
Canada seeks public input into #FATCA negotiations with Form Nation fin.gc.ca/treaties-conve…
— U.S. Citizen Abroad (@USCitizenAbroad) November 8, 2012
Note this Press Release out from Treasury today… More spin about the IGAs…
U.S. Engaging with More than 50 Jurisdictions to Curtail Offshore Tax Evasion
So, if they want a targeted and efficient operation, then just focus on US homeland Evasion, and not every friggin’ US person living around the world.
@just me. The IRS has bought an around the world ticket for Billary Clinton and Geitner—I guess they must have missed out on their Eurail days. They can’t take care of their own business, so they need to find something more fun to do. Obviously, there are cash-rich farm-equipment dealerships in Kansas and sophisticated crime syndicates on the south side of Chicago that are shipping their assets to South Africa and Burma to hide it from the IRS.
These guys are just totally infatuated with the idea that there is 1.6 trillion someplace for the operation debt, laying in a treasure chest. They have maps and clues. After they find the first treasure chest, then they will go looking for the next trillions needed for the similar amounts for social security, medicare, and finally ObamaCare. And they have the blue-staters convinced that they will find it.
Jim jatra’s comments are valuable, as well as Rep Reichert’s, about the necessity of a cost benefit analysis of FATCA. In the absence of one by the US, how could the Canadian government even contemplate negotiating anything?
*@Bubblebustin
Have you sent this to John Weston yet. Any response back.
@tim
Last correspondence I had w Weston was to send him the Jatras comments about why no government should enter an IGA. No response. I surprised he didn’t send me notification of the request by the Finance dept for input, considering he suggested I make a budget submission to same.
*We also have this posted at Maple Sandbox.
For months, I have been trying to get Canadian Civil Liberties Association to take this issue on. Eight weeks ago, their Director of Public Safety said she would advise me “tomorrow” what CCLA might be able to do. To date, she has not advised anything further, although I have followed up with her almost weekly.
I would encourage others to contact Abby Deshman, CCLA Director of Public Safety at adeshman@ccla.org, as well as contacting the government. Perhaps the government will take CCLA more seriously than they take us–if CCLA will get moving on it.
*Am I surprised? No. Frankly, the Canadian government will sell us down the river if it helps keep the US satisfied. Disgusting. Why don’t we just give up our nationhood and just raise up the stars and bars?
@The_Animal
“Raise up the stars and bars”? I live in Virginia (work in Washington). It was before my time, but I believe the locals tried that. To the best of my recollection, the results were less than optimal.
Hi, Blaze.
I have contacted Abby as well, moreso for my particular slant concerning my son. Unfortunately, not something they could take on according to Abby.
*Yeah, Jim, I’m being extremely sarcastic. Just told Jim Flaherty just what I thought of him. I’m sure I’ll probably be on Canada’s no-fly list pretty shortly.
*The phone number given is real and does work. I just tried it a few minutes and recieved the voice mail of Kevin Shoom. I recommend if Ottawa is not in your local calling area to get a Skype Account for $3.00 a month(There is also a certain degree of anonymity with Skype). I would look at this from a Canadian standpoint as not the end but just the begining. As James could probably describe better you couldn’t fight the takeover of several major American ports by Dubai Ports World UNTIL Dubai Ports World had actually publically announced they were going to try to takeover such ports. At this point don’t call up the number given and be real nasty. For now call the number given and simply ask as to what is the best way to comment on the issue(Even if you aren’t going to comment and this is a key point).
Have your spouses(with different last names) and kids get their own Skype accounts and then have them call Kevin Shoom too. Have neighbors call and simply ask what is the best way to submit a comment on the issue. The goal for now is volume of calls. The goal should be that be early next week that individual is simply getting inandated with calls and their phone keeps ringing off the hook and they are simply unable to any other work other than field calls related to FATCA.
Interesting timing.
Did they deliberately wait until the US election was decided?
This is horrific.
So what about Flaherty’s words: “I should also note that penalties imposed by the IRS under FBAR will not be collected by the Canada Revenue Agency (CRA) on the IRS’ behalf.
While the Canada-United States 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 U.S. tax liability of a Canadian
citizen if the individual was a Canadian citizen at the time the
liability arose (whether or not the individual was also a U.S.
citizen at that time)””
And how will that work with FATCA?
Is it that the design of FATCA removes the need for the US to rely on the FBAR – and gets to work around its limitations on FBAR collection under the Canada/US treaty as it stands – because FATCA is under Title 26 vs.? Tim or Eric know?
And of the IBS readers out there who are not yet Canadian citizens – get in line immediately – the average wait time is now 21 months (up from 19 months posted earlier in 2011, and spring of this year) according to the Citizenship and Immigration website http://www.cic.gc.ca/english/information/times/canada/cit-processing.asp
The sooner you’re a dual, the sooner you can plan to rid yourself of US status shackles. Better let anyone else you know who isn’t a reader here, but who is a US person, so they can protect themselves, and also get them to start writing and calling Ottawa.
Sorry, important correction to my comment above: FBAR under Title 31, FATCA under 26?
(Couldn’t edit it).
@Badger I would look to the Treaty here. Even though Form 8938 is under Title 26, I am not sure that would make it a tax issue. Regardless of what Title FBAR is under, it has nothing to do with taxes. Hence, I believe the it is not covered by the tax treaty even if it were under Title 26. Title 26 could easily include things that are tax related and things that are unrelated to tax.
So, I would expect some hard thinking on this and NOT presume that the title it is under is determinative.
@jim jatras and all
As you noted, Jim, The Investment Funds Institute of Canada and The Canadian Life and Health Insurance Assn both supported Canada entering into IGA’s in their Pre-2013 Budget Submissions. I think we should assume that the Canadian Bankers Assn would do the same. How can we persuade them to back off the Canadian government to do so?
Others we should contact should be the Canadian Medical Assn. Tim posted this back in April:
Canadian Medical Association position on FATCA and FBAR(Must Read)
I have made this post sticky at the top and labeled it “top priority”. Now I propose writing tract for this subject which I will title “Don’t feed Canadian residents and citizens to the IRS Beast”.
Summary: The premise will be that we already know that the United States ambassador has lied to Canadians and has thus negotiated in bad faith; we already know that the IRS is feeding off of Canadians living in the US and residents of Canada. Therefore, we must stop FATCA from affecting two sorts of people: (1) Canadian citizens (no matter where they live in the world, whether US or elsewhere; (2) Canadian residents.
Ambassador Jacobson has lied: I spoke with a grandmother on the phone yesterday that said while she (Lioness) owed no taxes the IRS has however sent her a bill for tens of thousands on the basis of failure to file on time and correctly. The Honourable Jim Flaherty has written: “The December 7, 2011 guidance states that U.S. taxpayers who owe no U.S. tax are not subject to any penalties for a failure to file a U.S. tax return, while other taxpayers may be eligible for reasonable cause relief.” This is not true. I’ve seen with my own eyes the fact that the IRS pays no attention to the December 7 guideline when assessing penalties. Furthermore, “reasonable cause” is a nebulous term with no definition–but the IRS has an idea what it isn’t: it is not, “I’ve been in Canada for 43 years paying my Canadian taxes and I had no idea that the United States required that I file in the US even though I owe no taxes in the United States.” What is unreasonable in this situation is not the reasonable cause of the Canadian-based taxpayer, but rather, the extra-territorial tax demands of the United States.
The IRS is feeding on Canadian citizens and residents: we have multiple examples of fines and tax bills from multiple Canadian residents who have Canadian only income. Canada must protect her interest and her citizens. Canada promises to protect her innocent residents as well, even if they are only landed immigrants or refugees. If FATCA information is given to the IRS it will only be food for more of the same. Canada cannot offer an intergovernmental arrangement because Canada does not feed on its expats living in the United States. There is no reciprocity, only loss of Canadian sovereignty.
Canadian citizens who have savings in Canada but have left for the United States to work in the US market under NAFTA provision should not become beast food either. Canada must not agree to allow FATCA regulation as means of ratting out Canadians’ accounts for the IRS. Canada must protect her interests in all these matters.
The Canadian government must understand one thing: Canadians who pay little taxes in Canada will not be very interesting food for the IRS beast. Those Canadians who are the most interesting to the IRS are those who pay the most taxes in Canada. Thus, Canada must protect her own tax base and not allow some foreign animal, even if it is the great and might beast to the south, to feed on her taxpayers.
This is the 200th anniversary of War of 1812 on which occasion our predecessors protect this great country from an incursion from the the United States. Canada must rise to the occasion for surely, FATCA, constitutes a foreign invasion into the bank accounts of Canada. We must protect our accounts in the same manner that we fought and protected our freedom from the United States tyranny in 1812. If it was not for the heroism of Isaac Brock, Canada may not have become a sovereign nation in 1867 but would have remained a satellite of subject to the whims of Washington D.C.
A further consideration: The honourable Jim Flaherty also wrote:
The annual tax filings required of every Canadian citizen is fraught with penalties that may apply even if the person owes no taxes. Lioness case is a perfect example.
Also, Canadian residents pay taxes in Canada, for which their is no foreign tax credit in the United States: HST. Furthermore, Canadian residents receive a tax break for certain things for which there is no corresponding break in the United States: e.g., the sale of one’s primary residence. This creates a situation where “US persons” in Canada may be subject to very large tax bills where no tax is owing in Canada.
TFSA, RESP, and RDSP are not protected by the Canada/US tax convention.
This open invitation is prime time to send a letter outlining your dissatisfaction and extraterritorial reach by the US Government relating to these ongoing negotiations.
I implore anyone and everyone to write to the supplied address and express your distaste!
There is only one solution to this problem and it is called a resident based taxation system.
IMHO
*I have suggested previously call the contact person on the press release first to indicate you are making a submission.
Looks like the rush to an IGA may be on in Canada.
I likely missed this (Operational Risk & Regulation | 11 Oct 2012) in my reading here. http://www.risk.net/operational-risk-and-regulation/news/2216468/ffis-facing-legal-conflict-with-fatca-compliance-experts-warn
@renounce, I was preoccupied by the differences in the Titles that FBARs vs. FATCA fell under because of the discussions here previously and because of http://isaacbrocksociety.ca/2012/09/24/fatca-and-fbar-reporting-by-individuals-enforcement-considerations-from-a-canadian-perspectivective-andrew-bonham/ “FATCA and FBAR Reporting by Individuals: Enforcement Considerations from a Canadian Perspective” by Andrew Bonham Canadian Tax Journal, Vol. 60, no. 2, 2012 whose author focused on mechanisms/potential for collection of FBAR and FATCA penalties in Canada under the current iteration of the treaty. I had thought that the titles were significant as to what/how the treaty applied (re distinctions made between actual tax returns vs. ‘information’ reporting requirements). The conclusion of the paper briefly speculated re the design of FATCA vs. FBAR and collection potential in Canada. Have also seen other materials comparing FBAR and FATCA reporting for individuals – and saying that the FATCA reporting was designed to get around any limitations inherent in FBAR (ex. statute of limitations, what title it was under, relationship to the 1040 itself, etc.).
I’m re-reading it now, and recommend others do so as there are several good arguments (apart from the very technical ones) phrasing, and sources which might bolster submissions.
It addresses privacy concerns, potential that Canada would be acting against it’s own best interests and the interests it has in its own taxpayers, etc.
If the Canadian firewall against FATCA falls, then we only have China to be our recalcitrant hope! Just remember, this is about a GATCA, which most IBS members know, but just to tie it together, I remind everyone of the previous conversations on this subject.
A Global #FATCA in the future
There are still things that don’t make sense. OK, the US want to get every single tax penny that is owed to the IRS, from all of its citizen. Then I don’t understand why the requirement of FFIs is to provide not only the interest/dividends paid to the accounts (which is what matters in this case), but the full balance of the account. Why is the full balance of interest to them?