On May 30, 2013 Accidental post the following comment:
Accidental says
May 30, 2013 at 8:01 pmI read that the Eritreans had formed a group and retained the services of a human rights lawyer. Why don’t we co-ordinate as many foreign Americans as we can, spanning, say, 30 cities worldwide? We’ll need a lawyer in each city, and probably a constitutional lawyer in the US to co-ordinate the case. When we’re ready, we co-ordinate the service of 30 class action law suits at 30 embassies simultaneously. We should all challenge the ‘Saving Clause’ in the bilateral tax treaty, without which the taxing authority where we live would have precedence over the IRS; Cruel and unusual FBAR punishment; citizenship based taxation, taxation without representation etc. It seems fraught with jurisdictional and diplomatic issues, but we could at least explore the idea.
Maybe even better. Let’s try to put 1000 of us together. We all contribute according to our means, but that should give us America’s best human rights lawyer, all the way to the supreme court if need be. File in DC and make sure we’re all there for the trial. It’s not just for ourselves, it’s for all the Accidental American’s who’ll be meeting the IRS via FATCA, but most importantly, for our kids, present and future, who stand to inherit a most unfortunate ‘gene’, unless we tend to it now.
It’s time to get started. I note the following comment on June 25, 2013 from Marie:
Attn:Brockers
This afternoon I put a call into the CRA to request some info on Canada’s existing treaty with the US. They forwarded me to Competent Authority, the division of the CRA that deals with tax treaties. They are in Ottawa and can be reached at 613-957-2071. I spoke to a representative that had a great deal of info on the matter. I called with some general questions, she gave me info on the “Agreement”. Here is what she confirmed for me.
First off, the Ministry of Finance had some concerns about s.15 of the Charter of Rights and Freedoms. They concluded that Fatca reporting does not contradict or conflict with the charter.
1. FATCA is a reality. The agreement will be signed this summer. Info will be available on the CRA website beginning in September 2013.
2. All US persons in Canada are considered US residents for tax purposes according to the US, based on that, Canada considers us US residents as well.
3. Beginning in 2014, Canadian financial institutions will begin identifying US persons to report to the CRA. CRA will report individuals with bank account #’s balances, etc. to the IRS.
4. All bank accounts over $50K will be reported.
5. Registered account such as RRSP’s, RIF’s, TFSA’s and RESP’s are exempt (she did not mention RDSP’s)
6. If your bank account is held jointly with a non-US person, it gets reported as well.
7.CRA’s first wave of reporting to the IRS will take place in April 2015 and will cover 2013 and 2014. After that, balances will be reported once per year in September.
8. CLN/renounciation/relinquishment does not get you off the hook for taxation for 10 years. Your balances will continue to get reported for 10 years after issue of CLN.She recommended that I get my hands on a copy of “A Tax Guide for Citizens in Canada” by Carswell.
There are many more questions that I would like to ask her. I encourage everyone seeking answers to call the CRA for information.
This means the time has come to organize the following legal actions:
1. Class action FATCA lawsuit – A “representative plaintiff” is required. This must be a “tax compliant” (who else would do this) U.S. person who has been “outed by a bank”. I know several tax compliant U.S. persons. One of them might be persuaded to act in this capactiy.
2. Complaints to provincial human rights tribunals – discrimination based on citizenship, national origin, etc.
3. Complaint to those at the UN responsible for the administration of the Universal Declaration of Human Rights
We are going to need some central coordination of these things.
I am going to try to transfer subsequent comments to Marie’s comment (as per your request). So, I have (at least for the moment) put all subsequent comments in one long comment. The idea (as per Em) is to try to create a new thread out of this important information. I would note that some of the information that Marie received is clearly incorrect (there is no obligation to pay taxes after one ceases to be a U.S. person). Nevertheless, the gist is significant.
It will be very interesting to see where Congress goes on the question of citizenship-based taxation. I have long been of the opinion that the US will have to move to RBT in order to get FATCA. I still would renounce though. Who in their right mind would want to be caught up in the fear of this any longer than necessary.
By the way, for those who have become lover of Canada in the last couple of years:
The Government of Canada, at the request of the banks, is getting ready to cooperate with the IRS to destroy you.
As USXCanada always says:
Look out for yourself and your family first (in English).
On a practical level I think you can mitigate a lot of the effects of this by using a number of bank accounts at different banks to keep your balances low. Also, RRSPs are not reported. You should get rid of the TFSAs and carefully consider how to deal with the mutual fund issues. You do have time to organize your lives and we have time to organize the lawsuits.
But, taking the lead from “accidental” – It’s time!
I guess I can take a deep breath now. I sounds like she jumped the gun a bit by giving me the worst case scenario.
Blaze, I’m glad you spoke to Blair. My contact at Competent Authority mentioned that name. She said that Blair has more info she regarding this issue and would be the best person to speak with.
Now I’m thinking, why didn’t she give me Blair’s name YESTERDAY?
@ Blaze & Marie
This “competent authority” at the CRA may well have let the cat out of the bag as Bubblebustin said and even though Blair is more authoritative he could just be trying to put the cat back in … for the time being. After all, FATCA is a giant iceberg and the CRA cannot turn its ship around on a dime. It would need considerable lead time to implement the Finance Department’s orders following adoption of an IGA (actually a tax treaty override) by parliament this Fall. Remember the USA is insisting on a January 1, 2014 deadline for FATCA so the way I see it the CRA is preparing now, with very good reason to believe the deal is done, despite the official stamp of approval not having been applied yet. Like Petros, I think that the gist of the information this “competent authority” provided is correct. Nobody makes up stuff like that without input from someone in the know. I will not be placated by anyone saying, “There, there, nothing has been decided yet” and It is immaterial to me that Finance is the decider while the IRS is “only” the enforcer. FATCA is what FATCA does and I think FATCA is not on a simple “watch list” at the CRA, it is on the “make it so” memo. The Conservatives have that dreadful majority (thanks to dozey Canadian voters) so parliamentary passage is not much of an obstacle. If the secret, sell-out negotiators think a tiny bandaid like RRSP, TFSA, etc. exemptions will make the huge gaping wound of FATCA heal then they are very much mistaken.
I made this comment yesterday at MapleSandbox prior to the posting from Marie-
“I think the approach to take in launching a legal battle is something that should be thoroughly discussed in the near future. I’ve felt for some time that a legally registered organisation with a Board and by-laws may be a necessity, for both legal and media coverage reasons”—
More is needed besides phone calls, tweets,, emails to MPs, website postings and comments on articles, as intelligent and thoughtful as they might be.
Even though information given to Marie was incorrect, it’s certain that some sort of IGA based on Model 1 will be forthcoming.A new, strictly Canadian, organisation or an alliance with an existing organisation should be considered.
Perhaps also, a crowdfunding website could be used. After all, if $200,000 could be raised in a few days for the Rob Ford video, we should be able to do much better.
Internet connection today is wonky so I’m trying this post again (sorry if it comes up twice)
@ Blaze & Marie
This “competent authority” at the CRA may well have let the cat out of the bag as Bubblebustin said and even though Blair is more authoritative he could just be trying to put the cat back in … for the time being. After all, FATCA is a giant iceberg and the CRA cannot turn its ship around on a dime. It would need considerable lead time to implement the Finance Department’s orders following adoption of an IGA (actually a tax treaty override) by parliament this Fall. Remember the USA is insisting on a January 1, 2014 deadline for FATCA so the way I see it the CRA is preparing now, with very good reason to believe the deal is done, despite the official stamp of approval not having been applied yet. Like Petros, I think that the gist of the information this “competent authority” provided is correct. Nobody makes up stuff like that without input from someone in the know. I will not be placated by anyone saying, “There, there, nothing has been decided yet” and It is immaterial to me that Finance is the decider while the IRS is “only” the enforcer. FATCA is what FATCA does and I think FATCA is not on a simple “watch list” at the CRA, it is on the “make it so” memo. The Conservatives have that dreadful majority (thanks to dozey Canadian voters) so parliamentary passage is not much of an obstacle. If the secret, sell-out negotiators think a tiny bandaid like RRSP, TFSA, etc. exemptions will make the huge gaping wound of FATCA heal then they are very much mistaken.
I agree with Hazy and Em.
@Marie, Others I hope this post by Wondering at Sandbox will also help to calm some of the anxiety around this:
“Had a similar conversation with Blair. Very pleasant gentlemen and receptive to comments – has legal background so is aware of the human rights arguments and the Peter Hogg opinion letter specifically. As he put it: CRA has the job of administrating laws, and the laws and policy come from Finance Department. Right now there is a FATCA file being actively discussed. He promised to pass along comments and concerns to higher-ups and others working on the file, and suggested continued political outreach to law and policy makers.”
What happened to Marie yesterday is almost identical to what happened to Tiger and me about a year ago with the Privacy Commissioner. We were both given totally wrong information about FATCA by someone at the Commission. If we hadn’t followed up, we would never have been given the correct information.
I remember the Director General, Communications at Privacy Commission saying at the beginning of her call to me: “This is not the type of service we want Canadians to receive from their government.”
The only reason Tiger and I followed up was because someone (I think it was Wondering) received a letter which was very different from the telephone information which Tiger and I received in response to our letters.
Here is the letter which I received from the Privacy Commissioner’s Office–including an apology.
http://maplesandbox.ca/wp-content/uploads/2012/08/PrivacytoBlaze.pdf
I have no idea if the person Marie spoke with has inside information or if she is just speculating or thinking out loud. In any case, giving the information she did was unprofessional, which causes me to question accuracy and reliability as well.
Marie’s words “worst case scenario” probably describe it. Let’s work to make sure that doesn’t happen!
@All
The goal must be $500,000.
A centralized command post (whether legal entity or not) is needed.
It is impossible to organize this over a public blog and not desirable to do so.
We must stop the talking and start the doing.
Further to Blaze, Marie and Petros: I was going to hold off commenting on this thread, because it struck me that a lot of the reaction was premature and based on not-enough solid information. After seeing Blaze/Marie/Petros’ most recent replies, I will throw in my two cents’ worth:
I see no point in getting upset or “saddling up” over this right now; until we see a printed agreement, with dry ink, in front of Parliament, there’s nothing concrete to react to, and little point in ruining our summer over any of this. We’ve all made our positions loud and clear to Finance, to our MPs, to CBA, and to anyone else that will listen, and any more right now may just dilute what we do later if and when we have to later.
Totally agree with the CRA person: they’re just going to be following whatever orders are eventually given to them, the target isn’t CRA, it’s Finance and the Harper Government, then Parliament and finally the courts if it comes to that, but it is premature for that now. Wait until the publish the text of the agreement, then react. Until then we’re just swatting at fireflies.
Totally agree with Petros re US-source income. Anyone who has gone to the point of getting or applying for a CLN by now and still has US-source anything in their portfolio, is a few sandwiches short of a full picnic in my books. Everyone I know who has a CLN got the hell out of US everything by the time they applied for a CLN, some long before, and then people like me who had a CLN for decades dumped his few remaining US-related mutual funds two years ago in anger and solidarity with everyone else, even though I knew none of this will ever directly affect me. Keep your Canadian income and savings in Canada, and have the satisfaction that you’re doing your small bit to dry out the buggers south of the border. They want ten years of reporting on US source income? Ten years of zero reports? Not my problem, nor my wife’s. I hope not yours, and if it would be, do the obvious and get out of that economy NOW.
We can pay back the Harper Government for any treason in the 2015 election, or in any intervening by-elections. And will, or at least I sure will. I long ago pulled all my money out of CBA institutions and put it in my credit union, so there’s no more I can do to those weasels, but many of you can have an effect there too.
Blair if he is who I think he is “BIG” at CRA. Whoever Marie spoke to was almost certainly more junior. Nothing that has been said contradicts at all anything I have heard from Arrow and his contacts other than from what Arrow has said any agreement is likely to be subject to further delay.
I will also add to Em’s point even with a majority government the process of passing any new legislation is quite lengthy. The idea that this can simply be rammed through overnight is false. In fact it is even more difficult for the government is it now appears likely that the fall sitting of Parliament will be abbreviated due to a new throne speech and the Conservative Party convention in Calgary being flooded out.
When this finally his the House of Commons if ever does there will definitely be opportunities for committee hearings etc.
Even as a Canadian citizen; I’m pretty pissed off…considering that the US has ties to me through the spouse. I’ve closed my CIBC accounts (including the ones that have my wife as joint). We’re applying for her Canadian citizenship…as soon as we jump through the hoops replacing her IMM1000 and applying for her PR card so she can apply for Canadian citizenship. Hoping to hell that the credit unions can offer some sort of protection.
This decision to cave into the US demands has pretty much made not just US persons second-class citizens in Canada but ANY Canadian with any ties to them are pretty much 2nd-class citizens and that has me absolutely outraged. We should all be feeling betrayed by this “money-first” government.
I seriously think that instead of blogging…that we should be meeting as mutual support through this time. I’d be willing to get a support group together in British Columbia. Not sure what we’re going to do now. All I know is that we have to take measures to protect ourselves from this money-grubbing nation that purports itself to be a “bastion of freedom” and the enablers that would allow it to get its way.
@ Tim
How do our banks deal with the January 1, 2014 deadline if there is no guiding Canadian legislation in place by that time? We know what they are doing in Switzerland. I know what I’d like them to do here but those US investments are simply too precious to them. Will the Conservative’s new motto be “Save the banks. Skewer the people.”? Hmmm ….
@ The Animal,
I strongly agree with you about starting a local group. Here in Ottawa, we’ve been getting together periodically since late 2011. It provides mutual support and a good way to discuss research face to face. We also attended a FATCA info session held by our MP, at which the NDP Finance Critic, Mr. Mai, was a speaker. So, we were able to speak with him; and also to make sure that the accountant and lawyer speaking at the session were giving out accurate information and refute anything that wasn’t (as Bubblebustin did recently at the BMO session in Vancouver), and to publicise Brock. And of course, a local group is a base from which one can organise an activity as the need arises, such as a protest rally or whatever.
Not instead of, but in addition to blogging. I think having both a large scale “virtual” community and local “real” communities working on this is ideal.
Em, I have wondered myself how my bank intends to implement this with no IGA in place? I suppose they can just have you sign a form saying you agree to “share” your info but, then will they close the accts of those who don’t “agree” They are going to be in a sticky situation without the IGA in place. This is the time to make sure you aren’t reportable. My spouse and I are already getting those ducks in a row. He’s opened an acct at our credit union here which is local and which doesn’t have assets over the amount that subjects c.u. reporting. We can split accounts but, we do need to maintain our mortgage right now with one of the majors who jumped on board early to FATCA and who has a letter up about it.
The banks are threatened by the U.S. so they jumped on. I am sure their lawyers have figured out how they can do it without being sued.
For the life of me I can’t figure out why the trigger amt (reportable) in these accounts can’t be the same amount that would trigger tax. I.E. over the exemption for tax purposes as per our current treaty. Why so low?
Atticus, I agree with you that we need to “get our ducks in a row”…and make certain that our amounts are low enough to not trigger “reporting”. With our accounts only at $9,000 at the maximum usually happens every four months or $1,000 at payday and pretty much wiped out at 0.50 most of the months at any time on our operating accounts (the ones my wife and I use every single day) we would probably be off the radar in any case, but my wife is taking her citizenship application as a safety measure and going for the CLN. We will try to do this as “quietly” as we can and have her renounce. As a born-in-Canada Canadian born to two Canadian (1 born and 1 naturalized) citizens and not subject to US taxes; if the U.S. tries to look into my financial dealings through the keyhole (my wife as a US citizen), I’m pretty much going to tell them to “go blow” (visual being a “middle finger”).
go go go Canadian Brockers.
when the class action suit(s) get going…….Please advise how to send secure from NSA ……… GBPs, CADs, USDs………….. as my “mite” to fund the appeal.
Dream is that the same activism translates to London somehow (chances……….icecube in hot place!)
@pacifica777
I received a post seminal email from an attendant BMO Investment Advisor asking me how I liked the seminar. My response was:
Thank you Carol for asking.
I have been in contact with Mr Ahmad since the seminar asking him to clarify one of his statements. He said that some US citizens who travel to the US on Canadian passports have been asked by US border guards if they are up on their US tax filings. I am very active in these matters and asked my Canadian cross border tax lawyer and a very prominent expat group, American Citizens Abroad whether they have heard of US border guards asking these questions. I also contribute to a US persons blog, the Isaac Brock Society where we share a great deal of information. All have told me that they have no direct knowledge of anyone who’ve been asked these questions by US border guards. I am very concerned as to whether this is really happening as Mr Ahmad has claimed it has. Misinformation of this sort can be a serious determining factor in which course of direction an individual may take.
Mr Ahmad should also not allow himself to be perceived as encouraging bank customers who are US persons to hide their assets from the IRS.
My husband was not able to attend but got upset when I showed him the Nesbitt Burns investment information hand out that encourages customers to invest in things that US persons should not, such as TFSA’s.
This issue has effected my husband and I greatly both emotionally and financially. It’s important that those dealing with us make the best effort they can to get this very complex situation right as not doing so would only deal a greater blow to a group of individuals who already feel under siege.
I’m sure you understand.
Thank you,
***
When people who actually want to grasp these issues still can’t, how can we hope the average Joe Canadian will?
Perhaps in order to encourage more ‘Us persons’ to gather in person, a separate post on this topic with an IBS contact for each city would be a good idea, and maybe have it under Press Releases or somewhere more prominent so it doesn’t get lost in all the frequent posts.
Just a thought.
Only problem is: WhiteKat, with the “trolls” in Utah monitoring stuff. http://fox13now.com/2013/06/06/nsa-data-collection-turns-attention-to-utah-data-center/ Potential ex-US citizens will probably be smeared as US security risks thanks to your paranoid government – Will that potentially be a landmine for us? I was thinking about privately e-mailing each other with a Canadian based e-mail address. I need time to set up a Canadian e-mail address. Right now, I’m stupidly using Google which I should get off. I refuse to get off FB but I will reduce my political statements to nil; regarding this. a) because trying to convince homelanders about the idiocy of their government regarding FATCA is like pissing in the ocean. b) I don’t want my account flagged by UDC as a Canadian rabble-rouser who is persona non grata in the United States (despite the fact that I do not want to set FOOT in the USA at all any longer).
I still feel that it would be better if we have a central person whom we contact for info regarding other IBS contacts for our area. Of course who would be willing to maintain that kind of role? Call me a Canadian Shit-Disturber. But frankly, I am, because more of us Canadians need to quit being complacent and wake up to the fact that our fellow Canadians (considered as US persons) are getting screwed.
@the Animal
“more of us Canadians need to quit being complacent and wake up to the fact that our fellow Canadians (considered as US persons) are getting screwed.”
Thank you! I appreciate the sentiment, but do regular Canadians get it? Even the BMO representatives who held an information seminar for their US customers, handed out a “Tax Tips for Investors” sheet that was strictly for non-USP’s! Talk about adding insult to injury!
Wow. I am just catching onto to this issue. I don’t know if this is the place for my question, so please excuse if it is not. I am American born but became a Canadian citizen 10 years ago. I do not have a CLN. With an IGA looming in Canada, can I now relinquish and get a backdated CLN without penalty or exit taxes? Or must I renounce. With these recent revelations from CRA, I am getting panicky and want to make the right moves. Unfortunately I have just become aware of all this FATCA stuff. Thank you for your help.
I don’t think they get it. bubblebustin, and that’s the sad part of it. They’re selling the country down the river. I’ve never been so anti-American in my life. I’m protecting my family from what I think is a whole-sale financial slaughter and that’s probably why I’ve been researching FATCA. I’ve told my wife to stay away from her work’s RRSP so she can’t even save up for retirement. The only Canadians who would get the situation that duals and USP in Canada face are those who are emotionally invested and the sad part is that some of the spouses would rather stick their heads in the sand. I think I’m pretty much the only Canadian born, Canadian shit-disturber that you’ll find around these parts so my lungs are getting rather tired shouting about how stupid Canadians are to sell their country out to the “lowest bidder” <— read that as "appeasing the elephant" or the "ass" in this case as it is a Democrat government.
@ Em
To address your question to Tim, i believe the US-German IGA deems German FIs to be compliant until September 2015,by which time the US hopes the IGA will be approved by the German legislature and their FIs will be ready to pounce.
@Schubert
I’ll agree with you that it’s probably too late to have an effect on a Canada-US IGA prior to the IGA being published. I also agree that one should prepare oneself for the future, as I did a long time before I decided to and was successful in obtaining a CLN.
When the IGA is announced, we should be ready to make our opinions known in the most effective manner possible. I suggested an legally organised group. Others may have different ideas.