This is my third post discussing the decision of Sun Life to throw its clients “under the IRS Bus”. The first two posts were:
Sun Life Prepares To Turn Clients Over To IRS for Processing – Bitter End to a company with a proud history
The Sun Life Betrayal Part 2 – The Possible Consequences of Pension Plans Being PFICs
Today I continue my discussion of the friendly message from Sun Life. Part of the message says:
According to the latest information beginning January 1, 2014, FATCA will require Sun Life Financial to collect and report certain information on accounts held by U.S. persons to the IRS.
This means that we may require plan sponsors or plan members to provide us with information or documentation to determine if a plan member is, or is not, a U.S. person (a term that refers generally to a U.S. citizen or U.S. resident in this context). It should be noted that the term “accounts” includes life insurance policies with a cash value and annuities.
It is likely that the vast majority of U.S. citizens abroad do NOT know about their tax and reporting obligations. By asking whether people are U.S. persons, and giving the reason why:
Sun Life is providing notice to U.S. persons that they have U.S. tax obligations.
Once the person is contacted and asked whether they are a U.S. person, it will be harder from that point for people to claim lack of knowledge about their U.S. tax obligations. “Willfulness” is defined as:
“the intentional disregard of a known legal duty”.
By actively hunting “U.S. Persons” Sun Life and other institutions who participate in the great “U.S. Person Hunt” are:
creating conditions where from the point of the “notice” (providing knowledge of the “legal duty”):
1. It will be harder for people to argue ignorance of the filing and FBAR requirements and therefore “reasonable cause”;
2. It will be easier for the IRS to prove willfulness dramatically increasing the magnitude of the fines. Non-willful penalties are brutal. Willful penalties are “life ending”.
This is another example of Sun Life NOT providing “protection” to its clients. The Canadian financial institutions may be the best penalty generators that the IRS could ever have!
It is becoming increasingly clear that U.S. citizens abroad are lambs going to a particularly brutal slaughter.
The U.S. under the leadership of the Obama administration has:
1. Invented a whole new class of criminal. It has then deemed honest hard working Canadian citizens (with U.S. connections) to be members of that new class (their greatest crime is attempting to live a responsible life outside the U.S). Imagine having a pension plan in the country where you live? Imagine trying to save for retirement?
2. Enlisted the aid of Canada, at a cost to Canada, to find those “newly invented” criminals (most of who are Canadian citizens) for the benefit of the U.S..
3. Through the application of punitive fines, PFIC penalties, and various other penalties: extracting wealth generated in Canada to the United States. Incredibly, the Canadian financial institutions are actively participating in this looting of the Canadian Treasury!
Note to the Government of Canada, to all political parties, to all members of the House of Commons, and to Canadians in general: Wake up!!!!!!!!!!!!
Do NOT enter into a FATCA IGA with the U.S.
As Phil Hodgen says:
Renounce U.S. citizenship while the getting out is semi-good.
While you are at it, you might spread the message to:
Stop Citizenship-based taxation and repeal FATCA.
A Message To Homelanders:
It is absolutely clear that the U.S. has gone absolutely out of its mind! If you are a “Homelander” reading this blog post, try to imagine what it would be like to be a U.S. citizen abroad! Do you really believe that the people targeted by FATCA are tax evaders? Do you realize that hard working U.S.citizens are so terrified of the United States that they are desperate to renounce their citizenship in order to protect themselves from the U.S. government! Is this really in the interest of the U.S. Think about it!
Hint: the answer is NO.
FATCA not only ensnares US persons with over $50K invested in foreign financial institutions, but also new customer on-boarding will require that all new customers declare if they are US persons.
This isn’t going to be helpful for companies that use SunLife and employ Americans overseas, but I think the days of Americans working abroad are numbered.
Just an aside: Bill Moyers website is looking for input on most under reported stories of 2012. Here’s the link:
Not clear where you send the info. Probably by email.
Thanks for the information on Bill Moyers website looking for input on most under reported storie of 2012. An easy cut & paste for me.
Boy, you make a VERY good point. The FFIs become the IRS messaging arm to turn ‘Nonwillful’ behavior into ‘Willful’ behavior and increase penalty collection. Lambs to the slaughter, indeed. It will be harder and harder for Americans abroad to keep their heads in the sand and claim lack of knowledge, when you have all the FFIs of the world spreading the IRS message. That is some educational outreach, eh?
I think this adds to @Blaze’s 12 reasons for Canada to reject the FATCA IGA