Editors note: The Progressive Canadian Party has now sent out its official press release. Let’s pull out the stops for this event–show the media and our politicians that they must not tolerate FATCA. Email your MPs and the media. Use your facebook and twitter accounts. And above all, show up for the meeting if at all possible. Speakers will include Jim Jatras of Squire Sanders and Professor Allison Christians, H. Heward Stikeman Chair in Tax Law at the McGill University Faculty of Law. One fringe benefit will be that you can meet other brockers in the area (including Petros–yes, I will be participating). Thanks to everyone in advance.
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FOR IMMEDIATE RELEASE
A Fact Finding Forum on US Tax Grab in Canada
“The American government is attempting to tax permanent residents of Canada whom they deem to be U.S. citizens.” said Sinclair Stevens, Leader of the Progressive Canadian Party. “This contravenes Canada’s Charter of Rights and Freedoms and must be challenged.”
The Foreign Account Tax Compliance Act (FATCA) was signed into law by President Obama on March 18th, 2010. Originally to come into effect the 1st of January, 2013, it has been postponed one year. Briefly, it attempts to catch ‘U.S. persons’ (which includes, by their definition, a very large number of Canadian citizens) living abroad who are not paying income tax to the U.S.A. It by-passes the usual inter-governmental agreements and imposes the reporting of income and personal information on financial institutions in all other countries directly to the U.S. Internal Revenue Service … and that for no remuneration.
“Financial institutions which refuse to cooperate in this gathering of personal financial information are threatened with an enormous penalty – a 30% with-holding tax on all income on investments coming from the US to their clients. Can you spell ‘extortion’?” Stevens continued, “This expands the impact of FATCA from just ‘US persons’ living here to all Canadians who have investments in the US and may well force Canadian banks to increase their banking charges for all their clients.”
“In addition, to recouping unpaid income tax back several years it imposes very large penalties for non-reporting on such deemed ‘U.S. persons’.” Mr. Stevens added.
Finance Canada has posted a notice on their website soliciting comments on FATCA. The Progressive Canadian Party (PC Party on the ballot) will be making a submission.
So that the submission can be as complete as possible the PC Party is convening a fact finding forum at the University of Toronto on Saturday afternoon, December 15th – doors open at 10:00 for an 11:00am start. (see directions below). We have invited ‘expert witnesses’ from the legal and financial fields to provide further details on this international “extortion” attempt and to discuss suggestions from the audience for possible corrective actions including legislation.
“All Canadians, even those who have only a bank account, should be concerned and are invited to attend and participate in the discussions with our ‘expert witnesses’, Mr. Stevens said. “The press are particularly welcome and should see this as a convenient opportunity to get comment from both experts and concerned Canadians.”
Further information on the forum, including the speakers who have accepted our invitation, will be available shortly on our website http://progressivecanadian.ca/ .
The forum will be held in Room VC115 of Victoria College, 91* Charles Street West,
[*accessed via a one-way street between 89 (Burwash Hall) and 93 (Isabel Bader Theatre) – drop off only].
For both parking and travelling by subway the target is Museum Station on Queen’s Park. Parking is accessed on southbound Queen’s Park just after the subway station. After parking you should cross Queen’s Park via the subway station. On exiting the station you will be facing Emmanuel College and will have to go around either end to Victoria College which is exactly behind it.
@Halifax Pier, what an interesting find!
@Patricia. Absolutely. And also the relinquishers wouldn’t be there. I know that in the ’06 census, 117,000 US-borns self-identified as “Canadian citizen only.” My guess is that less than 1% had a CLN in 2006, just a guess, of course, but almost no one seems to have heard of such a thing until last year (and the news started breaking in the summer, after the 2011 census as well).
But at any rate, I think it may be a pretty reasonable indicator of where US-born people tend to end up in Canada. That historical graph looks interesting too. Quite a lot of detail in these charts/maps. Quite annoyed I’m only on a coffee break and have to get back to work.
@Patricia, I think we’ll see some “uprising” when the banks will start contacting such people with a US birth place, and ask them to sign the forms to turn the information in to the IRS if they don’t have a CLN.
I wonder how far the banks will go. i.e. are they going to require documentation that a customer’s parents is not a US citizen. I think this is not going to be enforced at the second generation. People born in Canada of US parents are probably safe and won’t be reported. A lot of people are going to fall through the cracks. You can call it luck or unfairness towards the others.
And maybe it won’t be enforced at all, because Canada will finally oppose it. That would be the right thing to do.
*Christophe.. The banks won’t contact Canadians with a US place of birth because they have no way of knowing where we were born. Nor should anybody give that information . Don’t ask, don’t tell. Everyone here needs to relax a bit and remember that the primary targets are still US citizens resident in the US and whales resident elsewhere.
@Duke of Devon: To identify US Persons, UBS in Switzerland poses the following questions to its customers. For original document (in German), please also see the link below:
Bank Relationship Basic Data Declaration
Type of Bank Relationship: Single-Owner in Person’s Name
Document Status: First Declaration
Owner of Bank Relationship:
Title, Name, First Name, Street/ Nr., Postal Code/ Town, Country
Date of Birth, Nationality
Telephone Home, Telephone Business
Declaration of Status of Customer as Non US-Person or US-Person (ID)
1. Are you a US Citizen? Yes/ No
(You must answer with “Yes” in the event that you possess more citizenships including US citizenship)
2. Were you born in the USA (or in one of the US Territories)? Yes/ No
3. Are you in possession of an American “Green Card” (independent of expiry date)? Yes/ No
4. Do you have residence in the USA from a US tax perspective? Yes/ No
5. Irrespective of the above Substantial Physical Presence Test are you resident still in the USA? Yes/ No
The customer is obliged to inform the bank immediately if his status as a
Non-US Person changes per US tax law. The customer acknowledges and
accepts that the neglect to inform the bank immediately of any change in
his status as a Non-US Person, respectively, any misrepresentation in
connection with his status as a Non-US Person, is justification for the
bank to cancel the bank relationship without notification.”
http://isaacbrocksociety.files.wordpress.com/2012/08/ubs-ch-acct-opening-form-p1.pdf
*Innocente. Quite a difference, so far, between Canada and Switzerland. Presumably because Swiss banks were the first and largest targets and have paid a large price for soliciting US accounts.
*I don’t think Canadian banks will require documents to identify US citizens. I believe that is why Finance Minister Flaherty is working so hard to keep banks out of the equation by signing an IGA. From what I’ve read, it’s against the law for Canadian banks to discriminate on the basis of origin. The only documents you need to open up a bank account in Canada is something that proves your resident, like a drivers licence. If asked, I would never tell them where I was born. Nobody in Canada should!
” … any misrepresentation in connection with his status as a Non-US Person, is justification for the bank to cancel the bank relationship without notification.”
I wonder what that means? Would the bank put your money in a brown paper bag outside its door and expect you to collect it before someone steals it? If they cancel your account without your knowledge and your mortgage payment fails to reach its proper destination then who will get the blame for that? I know these are facetious questions but I do foresee lawsuits against the banks for taking actions which result in losses for their dumped customers. I wonder if they have factored these costs into their FATCA compliance?
*To Em, I guess it depends on where that quote is coming from. The Canadian government has not given us an answer yet. We will not know if our Canadian bank accounts are safe until the Ministry of Finance signs an IGA. Quotes like that are all over Canadian bank websites. In July the Canadian Bankers Assoc posted a guidance for USP’s informing them that their accounts may be closed if they refused to sign IRS disclosure forms. For me, I try to think positively and be optimistic. From what I understand, a Canadian bank cannot close your account or cancel your mortgage based on your origin, or your refusal to tell them where you were born. I’m contemplating relinquishing my US citizenship but I won’t do it until I know EXACTLY where I stand in Canada.
@ Marie
The quote is from @ Innocente re: Swiss banks and you are right we have to wait and see what Flaherty does in respect to a Canada-USA IGA. In the meantime it makes it difficult for anyone with a US connection to do any normal financial planning. I hope he doesn’t bring the hammer down days before Christmas like the infamous creation of the Federal Reserve in the USA. Woodrow Wilson admitted later to having betrayed the people of the USA but I think he did it with malicious intent. He was supposedly one of the more intelligent US presidents so it wasn’t out of ignorance.
I am a new poster to IBS (this site is so encouraging to me). I am in this dilemma like all Americans who do not live in USA, with little voting powers and no benefits from USA. I got lucky and have my first appointment to renounce March 6 2013 in Vancouver. Anyway this article is the most concise summary of us ex-pats face, it is interesting that it comes from Lebanon:
http://www.nowlebanon.com/NewsArticleDetails.aspx?ID=464465&MID=0&PID=0
@kermit,
Welcome to Isaac Brock! Based on what we have been seeing, you’ve done well to get an appointment for March 6, 2013 in Vancouver. Can I start a line for your experience on our Renounce & Relinquish database at http://isaacbrocksociety.ca/2012/03/14/draft-pdf-compilation-of-relinquishment-and-renunciation-data-as-reported-on-isaac-brock/ (not identified by your name)? If so, can you provide the month and year that you had your first contact with Vancouver / request for your first appointment? We have been told by the Embassy in Ottawa that there will be a one-appointment policy for all Canadian consulates; i.e. every renunciant or relinquisher anticipating the same experience and respect.
If you haven’t already done so, reading The Consulate Directory at http://isaacbrocksociety.ca/2012/03/24/consulate-visit-report-directory/ should be of interest and help you plan for your appointment — and your experience will make our database and the Directory even stronger. People have been reporting their individual experiences which can be a big help for someone new to this and it gives us a snapshot of how experiences differ from one consulate to another, both in Canada and worldwide.
Congratulations and, again, welcome.
A participant here mentioned the need to alert those in Quebec, but I think we are hampered by a shortage of bilingual writers here. Found this: http://journalmetro.com/actualites/national/198529/lirs-veut-obtenir-des-informations-du-canada/
Perhaps we need press releases in French also. Google translate only goes so far!
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Maybe Brockers should wear ski masks to the event for dramatic effect, and to thwart any attempts by would be whistle blowers to identify “US Persons”.
@Bubblebustin,
That was too funny!
I’m obsessing over a thought as the date of the Fact Finding Forum on US Tax Grab comes closer. What if the FATCA decisions have already been made for us? What if we go to this meeting baring our hearts and souls and find it is just a way of making it look like our goverment is listening to our concerns? Are we really being taken seriously or is our fate in the hands of people who don’t understand how our lives are being destroyed?
*There is no way of knowing whether the IGA with the US has already been set in stone. The government is aware of some of the implications for Ex-Pat’s, but certainly not all. And it’s not even our government sponsoring this event. I’m sure the Canadian government is drooling over all the info they will gather about Canadian residents with bank accounts in the US. The term “collateral damage” comes to mind. The most important thing we can do at this point in my opinion is raise awareness.
@all:
Latest info from a good inside contact on this:
1. Don’t expect a Canadian IGA this year — if one is signed it will be sometime in 2013, and no prediction on exactly when it might come.
2. Final regulations from Treasury/IRS are still not ready, and won’t be until early 2013.
3. Canadian banks are urging Finance Department NOT to sign an IGA until the Americans agree to further significant delays in implementation. Also, they insist on minimum 18 months to prepare AFTER the final rules are published.
4. CRA is a key player in this as it will determine rules and regs for Canadian FFIs complying with an IGA — and CRA can’t do that until it knows what the final rules are and what is contained in an IGA.
That’s all I’ve got — I’m trying to find out if Flaherty will — contrary to earlier public statements — unleash CRA on duals and let them do the IRS’ dirty work for them. If he surrenders on that, charges of treason should be considered.
Bottom line — if you are a US person in Canada and want to stay here my advice is to get rid of that status as quickly as you can. I have NO confidence that the Harper government will do anything to protect you. Sorry to be such a cynic, but I’ve seen these guys cave before.
No doubt, US citizenship is out the window for expats wanting a normal life.
@Arrow
This isn’t what Kevin Shoom at the Dept of Finance told me: “by end of the year”, but if true is a more measured response than from those countries who are signing before the final regs come out.
@bubblebustin:
I learned a long time ago that wishful thinking often permeates the thought processes of those involved in predicting decisions from governments. Having said that, I’d be surprised if Ottawa would jump into an IGA when the people it’s supposed to help are saying slow down and get some more time for us. I don’t see a gain for the Harper government in jumping in with both feet right now.
But, I have no illusions that Ottawa will take a stand on principle. My only hope is that before Ottawa can sign on the dotted line, something else will come along to derail it. But that’s wishful thinking on my part.
*The UK released its “draft” legislation to implement the IGA today. Nothing much to see see it simply gives HMRC(British equivilent of CRA) the power to implement reporting requirements on “specified” accounts held by “specified” persons at “specified” financial institutions in support of the IGA. No mention of “US Person” these type of terms are apparently going to be determined in regulation. This type of very broad administrative tax regulation in the Canadian context has run into legal problems in the past such as in the “Richardson” cases back in the late 1970s and 1980s. Additionally administrative regulation is much less charter proof. The courts do not tend to give the same degree of deference to the Minister of Finance and Minister of Revenue as they do to a majority of Parliamentarians. I also think “specified” vs “all” probably means in theory some institutions will be exempt from reporting think smaller credit unions maybe even ALL credit unions. (In some ways the US has created an administrative law nightmare for other countries as all of these terms at least in the UK context are going to be defined by ministerial fiat).
Arrow, there have now been several other people other than yourself who have mentioned the “US” “Final” regs won’t be release until after the new year. I tend to think for whatever its worth you are on to something. Generally the Department of Finance holds a four month plus consulation of new Canadian tax legislation so if an IGA isn’t signed soon I don’t think parliament can vote in the spring and if Parliament doesn’t vote until the fall well a lot can happen in the meantime even to a majority government.
*I will also agree quite strongly with Arrow that CDN banks want a mininum of 18 months after the final rules are published. I get the feeling that this is a hill the CBA will very much be willing to die on.
Have you tried to bring FATCA awareness to all Canadian immigrants to the US. IMO, they’re the one who might be more impacted by the enforcement regime that Canadian “homelanders”. Is there any way to reach out to your expats to let them know what await them?