This is excerpted from a post at RenounceUScitizenship.
Yesterday, I was talking to Bay Street Investment banker (think big bucks). I described the FATCA problem. His eyes glazed over and said to me:
“I am extending you a courtesy just by listening to what you are saying!”
The complexity and sheer audacity of FATCA is beyond the ability of people to comprehend. Make no mistake about it. A FATCA IGA with the US will end Canada’s fiscal sovereignty. Ever hear the saying:
He who has the gold makes the rules
If Canada allows the US to have control over its banks, and the gold is in the banks, it will give the US control over Canada’s gold. Got the picture?
Why would any country enter into a FATCA IGA with the US Treasury?
Leaving aside the technicalities of U.S. threats, there is one simple answer.
The answer is: No country should enter into a FATCA IGA with the US Not now, not in the future. Not ever. The time has come to imagine a world without the U.S and to start behaving accordingly. The time has come to gradually build a world financial system that is not “US centric”. Here are ten objective reasons explaining why Canada MUST say NO TO FATCA!
Reason 1: The Importance of Canada As A Sovereign Country
Can US Treasury Con 50 Countries Into Relinquishing Their Fiscal Sovereignty? freedomandprosperity.org/2012/blog/can-… – China not on the #FATCA list.
— U.S. Citizen Abroad (@USCitizenAbroad) November 19, 2012
Any country that enters into an IGA with the US is surrendering its fiscal sovereignty – control over its finaces – to the US Furthermore, to agree to an IGA is to become a division of the IRS in Canada.
Therefore, when Canada considers whether to sign a FATCA IGA, it must ask herself one simple question:
Do we want Canada to continue to exist as a sovereign country?
If the answer is NO, then sign the agreement. History will remember Prime Minister Harper as the man who, on the 200th anniversary of the War of 1812, surrendered Canada to the U.S. What then, would the War of 1812 have been for?
If the answer is YES, then simply tell the US that there will no FATCA agreement. Not now. Not ever!
Now, it is true that many Canadians don’t care. Few of them know about this. Of the few who do know, fewer still understand it. That said, if you don’t want Canada to become the “Administrative Region of the IRS north of the 49th parallel” you don’t sign!
Reason 2: The IGA Proposed By The IGA Is Unfair Because it Gives Everything To The US and Nothing To Canada – Furthermore, the US Treasury is attempting to offer what it has no authority to offer
RT @stopfatca US Treaushas NO AUTHORITY to offer Foreign govsanything in #FATCA IGAs. Selling what it don’t own twitter.com/StopFATCA/stat… …
— U.S. Citizen Abroad (@USCitizenAbroad) November 21, 2012
Most discussions about FATCA are complicated by detail, technicalities and the sheer complexity of the regulations. Let’s look at the part of the agreement that defines what Canada gets. It’s found in Article 7.
Article 7
Reciprocal Information Exchange
Consistent with its obligations under the Convention, the United States shall continue to cooperate with [FATCA Partner] to respond to requests pursuant to the Convention to collect and exchange information on accounts held in U.S. financial institutions by residents of [FATCA Partner]. In addition, when and to the extent [FATCA Partner] seeks to collaborate with the United States to implement FATCA based on direct reporting by [FATCA Partner] Financial Institutions to the [FATCA Partner] Government followed by the transmission of such information to the United States, the United States is willing to negotiate such an agreement [on a reciprocal basis] on the same terms and conditions as similar agreements concluded with other Partner Jurisdictions, subject to the Parties having determined that the standards of confidentiality and other prerequisites for such cooperation are fulfilled.]
A. The most that Canada can POSSIBLY get out of the deal is information on bank accounts held in the U.S. by Canadian Residents. Canada (like the rest of the world) imposes taxes based on Canadian residence and NOT BASED ON CITIZENSHIP. Hence, although Canada may have an “interest” (no pun intended) in accounts held by Canadian residents in the US, I suspect the interest is “Not Much”.
On this point see the interesting comment by Todundsteur which confirms that Canada has little to gain:
Interest commentary on why Canada has little to gain through a #FATCA IGA with the US isaacbrocksociety.ca/2012/11/22/sev…
— U.S. Citizen Abroad (@USCitizenAbroad) November 23, 2012
B. Note that I use the word “possibly”. The proposed agreement does not guarantee that Canada will even get this information. Look carefully at the wording. The agreement does NOT say that Canada will get the information. Rather the agreement states that:
“the United States shall continue to cooperate with [FATCA Partner] to respond to requests pursuant to the Convention to collect and exchange information on accounts held in US financial institutions by residents of [FATCA Partner]”
Unless there is a specific law requiring US banks to provide the information, you can bet that they won’t. Why would they? If it becomes known that U.S. banks are providing information about bank accounts to foreign governments, customers will cease to use those banks.
Will Congress be able to pass a law requiring US banks to report to foreign governments? I doubt it. The banks have a strong lobby. There is currently no existing law. Hence, any country that enters into an IGA has no assurance that it will receive any information from the US about US accounts held by their residents. On the other hand, they are still required to turn over the banking information of US Residents AND US PERSONS!
Reason 3: From the perspective of Canada an IGA with the US is a legally binding treaty, from the US perspective it is at best an an “Executive Agreement” falling far short of being a Treaty
#FATCA IGA likely considered to be a treaty by Canada, but not by US – Stop FATCA agreement with US! isaacbrocksociety.ca/2012/11/23/que…
— U.S. Citizen Abroad (@USCitizenAbroad) November 23, 2012
This was confirmed in an interesting collaborative exercise among Tim, Just Me and Jim. What is important to understand is the under the Canadian Parliamentary system, an IGA is likely a “Treaty”. A “Treaty” requires the consent of Parliament (making it a very serious undertaking and a lot of work). From the US perspective, the US Treasury is just “promising the world”. It is possible that the US Treasury does not even have the legal authority to make the promises they are.
At a bare minimum, entering into an IGA is a much more serious matter for Canada than it is for the US.
At the end of the day, an agreement is only as good as the person you enter into the agreement with.
Reason 4: The US Treasury has confirmed that a FATCA IGA will not require US banks to do anything that they are not already doing and will not give FATCA Partners the same kind of information that the US receives
US cheats under Model #FATCA IGA because whatthe US gives is not the same as what the US gets – No cost to US banks renounceuscitizenship.wordpress.com/2012/11/26/how…
— U.S. Citizen Abroad (@USCitizenAbroad) November 26, 2012
This issue is well described by Calgary411 in the following comment:
To many just learning of FATCA, the above would seem ridiculous, but not to those of us who have been following what is happening.
Should we trust the US?
We certainly see how they will wangle out of any real reciprocity with other countries in their negotiations re FATCA. From October 12, 2012 Department of the Treasury, Mark J. Mazur, Assistant Secretary (Tax Policy)http://isaacbrocksociety.ca/wp-content/uploads/2012/11/12SE001798-SIGNED-Paul.pdf“The Information that the United States would agree to exchange under the reciprocal version of the Model Agreement differs in scope from the information the foreign governments would agree to provide to the IRS.
…
While the reciprocal version of the Model Agreement includes a policy commitment to pursue equivalent levels of reciprocal automatic exchange in the future, no additional obligatons will be imposed on the US financial institutions unless and until additional laws or regulations are adopted in the United States.”Would it not be prudent for all countries into IGAs with the US to make sure that the reciprocal agreements the US offers to enter with other countries includes the statement that the US will create additional laws or regulations in the US so there is NOT different scope for the US IRS and US financial insitutions than for that which the foreign governments will agree to provide to the United States?
Reason 5: By retaining the ability to amend the definition of “US Persons” the US can use the IGA as a means to steal more and more from the Canadian economy
How the term “US person” will give the US “de #FATCA control” over the sovereignty of other nations renounceuscitizenship.wordpress.com/2012/11/26/how…
— U.S. Citizen Abroad (@USCitizenAbroad) November 26, 2012
Reason 6: “US Persons”, the injustice of Citizenship-Based Taxation and fact that Canadian citizens are included as US Persons
RT @amchamprairiesCalgary Canada, largest American City outside US – 100,000 #americansabroad live there – #FBAR #FATCA capital of world
— U.S. Citizen Abroad (@USCitizenAbroad) November 21, 2012
The law which requires U.S. Persons to submit worldwide income to US taxation must be changed. It is unfair, it makes no sense, and it has a chilling effect on commerce, jobs creation, and free trade. Perhaps more importantly, our world image has suffered enough over the last few decades. People over the world who have been on the fence about whether America has lost its mind can only be convinced with this new compliance initiative which removes all doubt.
Former IRS lawyer Steven J. Mopsick
… it is the citizenship-based taxation that is the root of all this evil, and he sees very little chance of that ever changing.
As is the case in all countries, U.S. residents are subject to U.S. tax laws. But, the US goes further. It is not just US residents who are subject to US tax laws. The US requires all “US Persons” to be be subject to US tax laws. This is true regardless of where they live. So, what’s a “US Person”?
US Persons include:
– residents
– citizens (regardless of where they live in the world)
– Green Card Holders (whether they live in the U.S. or not)
– those who spend too many days in the U.S.
It is understood that there are approximately one million U.S. citizens who are residents of Canada. Therefore, for Canada to sign an IGA is to agree to turn over the banking information of NOT ONLY U.S. residents who have bank accounts in Canada, but Canada/US dual citizens who reside in Canada (and therefore have bank accounts in Canada). If you are not following this means that under the agreement that:
– The U.S. would receive the banking information of both US residents and Canadian residents; and
– Canada would only get the information of Canadian residents (if they even will get that).
Hence, it is clear that the proposed IGA is grossly unfair and one sided and should not be entered into.
Reason 7: Effects of US Citizenship-based taxation on Canadian Sovereignty
When great powers begin their decline into eventual irrelevancy, it is rarely just one thing that historians finger as a root cause. But for the US, this may well be it.*
Although not the main topic of this particular post, it is clear that the U.S. use of citizenship-based taxation is in effect a convenient way to steal from the Treasury of other countries. The horrible details have been amply documented in previous posts.
The bottom line is that:
Through double taxation in some circumstances (example capital dividends), deeming income never received to have been taxable (Subpart F and PFICSs), and treating retirement vehicles as “Foreign Trusts”, citizenship-based taxation has disabled approximately one million Canadian citizens from investing and retirement planning. Should this have an effect on Canadian immigration policy? Does Canada want to allow immigrants who are disabled by U.S. tax laws from retirement planning? It is becoming increasingly clear that US citizenship should be viewed as a disability.
There is no other major country in the world that uses a system of citizenship-based taxation. Citizenship-based taxation presupposes that the citizen is the property of the government. This notion is contrary to modern human rights laws which clearly assumes that citizenship is a voluntary arrangement entered into with a country. Furthermore, the taint of US citizenship is transferred to unsuspecting children, who are born outside the United States to U.S. citizen parents. It is repugnant to the ideals of justice that a person should be born as the property of any country.
Reason 8: Citizenship-based Taxation As A Violation of Human Rights
Does the effect of US citizenship-based taxation on #americansabroad violate US and international law? isaacbrocksociety.ca/2012/11/19/ame… – #FATCA Hunt!
— U.S. Citizen Abroad (@USCitizenAbroad) November 22, 2012
The U.S. takes the position that citizenship-based taxation is allowed by the U.S. constitution. That however does NOT mean that all aspects of citizenship-based taxation are constitutional. For example, to arrest someone is constitutional. But to arrest someone without probable cause may be unconstitutional. To put it simply: the time has come to seriously question whether citizenship-based taxation as practiced by the U.S. is:
1. Constitutional under the constitution of the United States;
2. If so, what aspects of it may be unconstitutional under U.S. law;
3. If constitutional under U.S. law, does it nevertheless violate international law by either:
A. Violating the rights of U.S. citizens abroad? After all, if one can’t:
– plan for retirement;
– have access to normal financial services
– be discriminated against because of U.S. tax laws
there may be a problem.
B. Violating International Human Rights Treaties:
– which seem to imply that citizenship does not imply that the government does NOT have a property right in the person;
– violate specific international human rights treaties
C. Violate International Law by invading the sovereignty of other nations:
– Citizenship-based taxation steals from the Treasuries of other nations.
Reason 9: To Sign A FATCA IGA Is To Endorse Immoral U.S. Conduct – If Not For Eritrea then Not For The US
#FATCA Freedom = NOT being #americansabroad(aka extraterritorial owned lock stock and hiney by the abUSive Uncle). isaacbrocksociety.ca/2012/11/19/ame…
— U.S. Citizen Abroad (@USCitizenAbroad) November 20, 2012
The true purpose of FATCA is to enforce US citizenship-based taxation. Citizenship-based taxation may violate certain laws and/or conventions. That said, it’s impact, application and enforcement (think of the outrageous behavior of the IRS in OVDI and OVDP)) mean that is absolutely immoral. The Government of Canada took a hard line on the African nation of Eritrea when it tried to enforce citizenship-based taxation inside Canada. The time has come for Canada to take a hard line against citizenship-based taxation form the US Furthermore, the time has come to seriously consider whether citizenship-based taxation in either intent or application is legal.
If Canada signs a FATCA IGA with the US, Canada is endorsing the immorality of citizenship-based taxation!
This is part of the message that needs to be understood by the Government of Canada.
Reason 10: Canada Is The Most Important Outpost In the US Attempt to FATCAize The world!
Opposition to #FATCA growing in Canada – The True North Strong and Free –renounceuscitizenship.wordpress.com/2012/11/21/is-… – Time to stand “On guard for thee”
— U.S. Citizen Abroad (@USCitizenAbroad) November 21, 2012
In 2003, President Bush was trying to get world support for his invasion of Iraq. Prime Minister Chretien announced in the House of Commons that Canada would not be part of the “coalition of the willing”. Canada’s refusal was hugely significant in the battle for world opinion. The same is true in relation to FATCA.
If Canada refuses to allow the US to use FATCA to enforce the immorality of citizenship-based taxation, then other countries are sure to take notice.
Prime Minister Harper is in a position where he will surely impact the future of world freedom!
Canadian PM Chretien said NO to US invasion of Iraq, cbc.ca/news/story/200… #Canada PM Harper must say NO to US #FATCA invasion of Canada!
— Stop FATCA (@StopFATCA) November 22, 2012
@all, re contacting politicians in general – I’ve been thinking about how to talk with those who are not disposed to be open to hearing our concerns based on arguments we’ve made so far.
Many others (Tim http://taxpol.blogspot.ca/2012/12/model-participating-ffi-fatca-agreement.html?showComment=1355549282435 , Eric, Just Me, Prof. Allison Christians blog http://taxpol.blogspot.ca/2012/12/model-participating-ffi-fatca-agreement.html , the IBS FATCA forum http://youtu.be/R__KgHq0vRE , etc.) have all commented on this angle either directly or indirectly (sorry, can’t give all complete and proper attributions – can’t locate all the comments), but I was thinking about it in terms of what to say to the Canadian politicians we contact – <i>who might be swayed more by trade and financial interests rather than human rights, Charter, and the ethics or sovereignty angles we tend to take</i>.
They might not give a damn about the impacts on Canadian families, and tune out if they consider this as just a US crossborder tax burden we have to bear. But because FBARs and FATCA <i>are not directly about assessing income tax</i> ‘owed’ to the US, it helps to detach the discussion of a FATCA IGA from those who want to cast us as somehow ‘owing’ the US something.</p><p>
I’m thinking about another way to frame our concerns about FATCA when talking to fellow Canadians and politicians. It occurred to me that if we point out that we are being penalized with threats of potential massive sanctions via FBAR penalties and FATCA merely <b>for keeping our accounts and assets Canadian</b> (because we are Canadian permanent residents and citizens), and contrast that with the treatment by the IRS and US if we instead put our money into investing directly in the US, <b>it frames FATCA (and FBARs) as a ‘Buy American’ and US trade and Made-in-the-US subsidy approach to banking</b>.
We are usually urged to ‘buy Canadian’ ( http://www.cbc.ca/thenational/blog/2010/12/the-impact-of-buying-canadian.html). Why would our Canadian government assist with a US directive whose effect is that Canadian-made assets be sent to the US?</p><p>So a slogan could be something like: “<i>Should Canadians be punished by the IRS for investing in Canada</i>?” or, ”<i>Should the Harper government help the US punish Canadians who choose not to invest their Made-in-Canada assets to US banks</i>?”</p><p>That might help to reframe the issue.
Since FBARs are not really about assessing tax per se, but in effect, are controlling and punishing assets and accounts held outside the US, that can be effectively compared to the US applying an incentive – if not a directive, to force all those it deems to be US ‘taxable’ persons to use only US banks, or to harvest penalties from us for not doing so. That sounds like a trade issue, not a tax issue. Against ‘free’ trade agreements – in application <i>and effect</i>, even if not explicitly by design?</p><p>
The US is effectively using FBARs and FATCA to apply sanctions or the threat of sanctions against those in Canada who bank and save locally – in Canada, while <i>entrenching an unfair advantage for US banks</i> – <i>and effectively, subsidizing the US banking system at the expense of those living outside the US</i>.
Since FATCA does not promise or deliver on exact ‘reciprocity’, and does not currently require US banks spend money on the aattendant compliance costs, this ensures that US banks can continue to attract and try to corral the market for ‘foreign’ depositors (which the US admits their pre-FATCA policies were explicitly intended to do) without the FATCA compliance costs. This is an in/direct subsidy to US banks and financial institutions of substantial size considering the IT and other compliance costs being estimated for everyone else in the world – even if under IGAs.</p><p>
We need some finance and banking or commerce and trade wonks to hone this angle?</p><p>I know others here have alluded to possible challenges to FATCA under NAFTA, and the WTO?</p><p>If the softwood lumber dispute http://en.wikipedia.org/wiki/Canada–United_States_softwood_lumber_dispute continued to be a thorn (sliver?) in the side of both the US and Canada for decades (since 1982?), couldn’t the banking issue under FATCA (and FBAR in it’s current application, even if not by design) outrival that? If the Volcker rule can be seen as a potential breach of NAFTA http://www.theglobeandmail.com/report-on-business/international-business/us-business/canadian-banks-warn-proposed-volcker-rule-could-violate-nafta/article1359765/ why not FATCA?</p><p>
Another example would be the US punitive treatment of our investment in Canadian mutual funds, TFSAs, RESPs, etc.</p><p>I don’t think that we have to prove that US banks are actively soliciting our business instead – although when they start fully marketing ‘FATCA compliant’ accounts directed to expats, that will bolster our argument further.</p><p>What do you think?</p>
badger, is this an example of what you are referring to (I am not a savvy investor):
http://www.expatexchange.com/lib.cfm?articleID=3269
One of the comments:
and
http://www.expatwomen.com/expat-women-money-matters/expat-americans-beware-new-foreign-tax-compliance-law-fatca.php
So, is this, too, a function of the Canadian banks that have US branches actually offering US investments to US Persons in Canada? I don’t know. I definitely don’t want Canadian banks to offer this and thus funnel Canadian earned funds to their US branches, but hey, why not? Do they do that now? I, personally, do not want one cent of any of my Canadian-earned money invested in a US product. I want my Canadian-earned money to stay in Canada and I want to be able to use those earnings freely to invest in such things as Canadian RRSPs, TFSAs, RESPs and RDSPs, and the same with any non-registered investment accounts.
Borrowing shamelessly from RenounceUScitzenship and compressing mercilessly, here’s my version of a Letterman countdown — except it isn’t funny to anyone who is a target of the FATCA FATWA!
Ten reasons why Canada MUST say NO to FATCA and NOT SIGN an IGA with the USA:
Number 10: FATCA takes a big bite out of Canadian sovereignty and the USA just says, “Mmmmm tasty!”
Agreeing to FATCA by signing an IGA with the USA in essence makes Canada an administrative division of the IRS.
Number 9: FATCA means the USA gets everything and all Canada gets is a lousy T-shirt which says, “Kick me!”
The USA claims that the exchange of information between it and Canada would be “reciprocal”. The fact is that only the USA taxes on the basis of citizenship. Canada (and all other countries) tax on the basis of residency, so there is little, if any, information that the USA could provide to Canada that would be of much use. The current tax treaty between Canada and the USA is more than sufficient to provide whatever information Canada needs to tax “worldwide income” coming from US sources. Furthermore, the USA puts a lot of conditions of whether or not it will actually force its own financial institutions to provide any information at all to any other country after an IGA is signed.
Number 8: FATCA is merely an agreement to the USA but to Canada it looks like a treaty, talks like a treaty and walks all over Canadians like a treaty.
A treaty requires the consent of Parliament, making it a very serious undertaking and a lot of work. From the US perspective, the US Treasury is just “promising the world”. It is possible that the US Treasury does not even have the legal authority to make the promises they are making. At a bare minimum, entering into an IGA is a much more serious matter for Canada than it is for the USA.
Number 7: FATCA gives the IRS the virtual key to the bank account information of the unlucky HAVES (those with US indicia) while the HAVE NOTS (those with no US indicia) get off with just a T5 slip.
The information flowing into the databanks of the IRS under FATCA would be gold mine for anyone wishing to hack into it and use it for nefarious purposes. The IRS has not shown itself to be capable of protecting US homelanders from identity theft so there’s no reason to expect any better for its overseas citizens.
Number 6: You were born in Canada but the IRS can still claim you as a US citizen/person for tax purposes — not for any benevolent purpose — no, just for TAX purposes.
Canadian green card holders living outside the USA and even Canadian “snow birds” who stay too long in the USA in a given year are deemed US persons for tax purposes. Canadians, born in Canada, with one or both US citizen parents are taxable even if they have never been to the USA. Some of these offspring who suffer disabilities are not even given the option of renouncing their US citizenship because they are deemed incapable of understanding the consequences and will therefore remain trapped in the US taxation system for their entire lives.
Number 5: Citizenship-based taxation is a Yankee Doodle Dandy way to take Canadian earned, Canadian taxed and Canadian saved money and transfer it to the US Treasury.
US citizenship-based taxation has disabled approximately one million Canadian citizens from investing and retirement planning because double taxation can occur when regular savings vehicles for Canadians are deemed “foreign trusts” by the USA. Double taxation also occurs in some instances such as capital dividends, sale of a primary residence, unemployment benefits. Add to this the draconian penalties for foot faults on any one of a myriad of “information forms” and the US Treasury swells with stolen Canadian treasure.
Number 4: Signing an IGA with the USA would just reward bad behaviour by the USA with its unique in the world (except for Eritrea) citizenship-based taxation system.
The Government of Canada was as quick as the USA to admonish the African nation of Eritrea when it tried to enforce citizenship-based taxation outside its borders. The time has come for Canada to also take a hard line against the citizenship-based taxation of the USA which makes far greater demands on its “overseas” US citizens/persons. Signing a FATCA IGA with the USA implies that FATCA is acceptable behaviour and that would be hypocritical to say the least considering Canada’s condemnation of Eritrea.
Number 3: If the IRS ever runs a little low on FATCA FATWA victims they can always expand the definition of US citizen or US person.
The USA has a past history of reinstating US citizenship even where no reinstating was sought. For instance, US draft dodgers who fled to Canada and became Canadian citizens were at first stripped of their US citizenship and then later given it back.
Number 2: Citizenship-based taxation means never having to say, “Enjoy your life overseas, you owe us nothing while you are away and we’ll welcome you home whenever you want to come back.”
There is no other country in the world, other than Eritrea, that uses a system of citizenship-based taxation. Citizenship-based taxation presupposes that the citizen is the property of the government. This notion is contrary to modern human rights laws which clearly assumes that citizenship is a voluntary arrangement entered into with a country. It is repugnant to the ideals of justice that a person should be born as the property of any country.
Number 1: The FATCA train needs to be derailed by Canada because it is the most important outpost in the FATCA FATWA against the world.
If Canada refuses to allow the USA to use FATCA to enforce the immorality of citizenship-based taxation, then other countries are sure to take notice and balk at signing IGAs with the USA. This is a sure way to get FATCA repealed, as it should be.
@Calgary411, it looks like a lot of that ‘advice’ to those ‘abroad’, outside the US, was meant for those who originally lived stateside and had US accounts – because they were US residents who moved abroad – possibly in the shorter term. The one excerpt refers to US accounts/assets moved abroad, rather than like ours, originating outside the US.
It may very well be that Canadian banks like TD – who have more US branches than Canadian ones http://www.huffingtonpost.ca/howard-green/td-bank-in-us_b_2490354.html will try to get our business by designing some kind of US FATCA compliant accounts for Canadian residents. But I’m with you – my MADE-in-Canada assets are staying here, and I want nothing to do with investing anything in the US ever! And offering FATCA compliant accounts in Canada won’t get my business.
Canadian banks decided not to enlist broader public support to fight FATCA. They decided not to alert the public, and instead, to go around the Canadian public, and democracy, and chose to work behind the scenes to lobby for an IGA instead. They decided to pass on compliance costs to all their account holders, rather than to educate Canadians about what FACTA means, so that we could prevent Canada from signing on.
Right on, badger.
We’re being cut out of the equation in so many ways.
Besides the banks, who admittedly have a US IRS gun to their heads and are in survival mode, taking the easiest way out and leaving us as collateral damage …
I will NEVER, never understand why the silence from the Canadian government and media on telling the complete, real story to all Canadians. Where are the journalists who went into that profession with a passion to dig and relay stories like this one? Perhaps they still go into journalism with a passion, but are rendered impotent and mere puppets of corporate masters.
“But I’m with you – my MADE-in-Canada assets are staying here, and I want nothing to do with investing anything in the US ever!”
@ badger
Same for me. I won’t go shopping south of the border either. It didn’t have to be this way but the USA created this kind of blowback by its own bully tactics.
For those who haven’t seen this on other IBS threads:
http://www.theglobeandmail.com/report-on-business/international-business/us-business/foreigners-accounts-in-us-banks-eyed-in-tax-crackdown/article8207084/
……..”The Treasury Department has acknowledged that more information sharing
would be appropriate. The completed FATCA pacts include commitments “to
pursue equivalent levels of reciprocal automatic exchange in the
future,” according to an October 2012 letter from Treasury Assistant
Secretary for Tax Policy Mark Mazur to members of Congress.”……
“………The Texas Bankers Association is considering a lawsuit against the
government to stop account-holder information-sharing with Mexico, said
Eric Sandberg, the group’s president……”
Opportunity for commenting on US hypocrisy and arrogance.
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Canadian citizen expat. Worked in US with Green Card for 15 years. Have no substantial presence surrendered my Green Card. Pay taxes on my US income as 1040NR. Non resident. Scotiabank says I am US Person for Tax Purposes. I clearly am not. Offered bank a redacted 2017 1040NR. Nothing, they refused to accept facts and reality. Any ideas?
1. Speak to someone who understans American law and th Iga
2. Depending on sums involved, get a proper lawyer
3.Change banks.
4. Post this on an action thread.
.
@Robert Neun. Its possible Scotiabank may be right. If you worked in the US for 15 years and didn’t file a Form 8854 after you left to properly exit the US tax system, technically you are still a US taxpayer. If you are down there for more than 8 years, officially surrendering your Green Card only terminates your LPR status, not your tax status.
Phil Hodgen has a good explanation on his website; https://hodgen.com/green-card-received-2011-give-2017-face-exit-tax/
Having said all that,1040NR can only be filed by non-resident aliens, not US citizens (or US taxable persons), so obviously the IRS must believe you are not a US taxpayer, otherwise they would insist that you file a regular 1040. If you did file a Form 8854, a copy of that might do the trick with Scotia. Failing that, I’d go with Portland’s option 3 and not breath word one about the US to the new bank. Another option would be to go ahead and let Scotia report whatever they want to report, continue filing a 1040NR as usual, and tell the IRS that Scotia made a mistake if or when the IRS ever gets in touch (which they probably won’t).