We have one more indication of FATCA causing problems for U.S. citizens in Canada. The first involved a bank account with the Royal Bank. In this case the RRSP account of a Canadian resident was frozen because she was suspected to be a U.S. person. We now have more indications of trouble …
What follows is a comment that appeared on July 9. It is significant because it demonstrates how serious the hunt for “U.S. persons” will become. Look around they are everywhere. Who knows, maybe one of them can be your retirement plan.
Here goes:
“Why is it that local banks are totally unaware of FATCA?”
I can tell you (as I am a recently retired investment adviser from a Major 5 bank)..
They haven’t built it into their compliance yet as they are not operating officially physically as an entity in the US (they have subsidiaries like BMO Harris, which wouldn’t backtrack up to the parent). However over the last decade compliance departments have been gradually requiring Passports or 2 forms of Photo ID as a measure of Identification…some forms I used to see are now requiring Passports where none was there before and all ID’s need to be updated every 5 years…
Where I ran into the problem of FATCA personally was when I retired last year and moved my personal Investment accounts to TD WATERHOUSE as I also had bank accounts at TD and wanted to use their self-service investment trading systems…Because TD Waterhouse is registered IN THE US…It’s compliance department seized upon my Canadian Passport showing a US place of Birth…That it turn triggered them to FREEZE my accounts until I signed a “W9″ and a “Limitations of Benefits” form.
The W9 is a Taxpayer Identification Number form TD Waterhouse Form 2 – Have a look at these forms.
The Limitations of Benefits is a Waiver of Client Confidentiality TDWaterhouse form1
I immediately told them I had no SSN and wasn’t a US Citizen and they had no right to provide any information on my accounts (now affecting my banking accounts,as well, as they were tied to the trading accounts for cash transfers) to the US as this would be a breach of the client confidentiality act…(besides it would include my CANADIAN born wife’s affairs as well)
They explained to me that the TD Waterhouse was required to do this as they were REGISTERED in the US and were subject to substantial US penalties under FATCA…
I had them transfer my accounts back to my original bank…and only allowed them to deal with my Canadian-Born wife’s “personal single named accounts”…Meanwhile, they are waiting for me to provide proof of my Loss of US Citizenship before they will happily transfer in my accounts…Thus my journey into the CLN search to which I had to educate myself and my Lawyer…
————————–
Why is this significant? What are my fears?
If and when FATCA is implemented, I would be worried about having my accounts frozen…(or being forced into signing the WAIVER of CLIENT CONFIDENTIALITY which is just one step closer to being a “recalcitrant”)
If my accounts were frozen; besides the ability to pay bills from pension payments and other resources, I would have my RRSP and TFSA frozen from trading (increasing market volatility risk), lack of access to funds, and possible forced redemption which would incur immediate taxation with Revenue Canada as the RRSP proceeds distribution would be considered Taxable Income in the year incurred.
These repercussions would be significant. Until such time of acquiring the necessary CLN to prove non-US Citizenship, one is exposed to a status of being in LIMBO as well as additional Canadian taxable implications. So far the process has taken from Nov 5th, 2012 to the present and still waiting resolution/delivery of a CLN.
A CLN is priceless! For everything else there is Mastercard.
A CLN – Don’t leave home without it!
For anyone who has had banking issues in Canada related to “US personhood”, you need to get your stories to Minister Flaherty, Kevin Shoom and your local MP.
Hi
Is there anywhere on the TD website where these forms are posted? Are the forms posted on the IBS website scanned copies of print?
Thanks
This is why the major Canadian banks must be forced to spin off their US assets. It is shameful and illegal behavior for them to violate Canadian law with the excuse that they are an American bank subject to rules passed in DC. The big banks in Canada enjoy special status in Canada. They should be regulated by the Canadian government and only the Canadian government. We need to do what we can to make them accountable.
I presented my valuable CLN to TD Waterhouse when I opened my new accounts. If, despite my “get out of jail free card”, they ever treat me like an American person for any reason, they won’t be speaking to me but to my lawyer.
Before I was a Canadian and before I had relinquished my US citizenship, I asked my TD branch manager if they would treat me as a Canadian only, once I became a Canadian. The response from legal was that they would obey the Bank Act of Canada. Requiring these extra forms are not legal requirements enshrined in that law, but a form of nationality discrimination condemned by the Canadian Charter of Rights Article 15. It is obvious that this behaviour is a violation of Canadian law and the universal human rights of those who are persecuted. This is the new world order established by Nobel Peace Prize winner Barack Obama.
You should also contact the Office of the Privacy Commissioner of Canada. They are monitoring the situation:
http://www.priv.gc.ca/
I would also contact the Canadian Civil Liberties Association.
http://ccla.org/
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Don’t miss this article: ”
FATCA: ‘Simple premise’ gone terribly wrong
By Lynne Swanson and Victoria Ferauge – 07/28/13
Read more: http://thehill.com/blogs/congress-blog/foreign-policy/313775-fatca-simple-premise-gone-terribly-wrong,
http://thehill.com/blogs/congress-blog/foreign-policy/313775-fatca-simple-premise-gone-terribly-wrong#disqus_thread
http://www.youtube.com/watch?v=FgJ-tsijWbQ&inf_contact_key=c3271aee8e7761ce9531bb5db26c1df4c32b570e62b81c36879c5cb165925fa9
From Simon Black, the Sovereign Man
What was his crime? He was born a US person.
@thomas,
Where have you been? That article by Lynne and Victoria is all we have been talking about the past few days!
I think this is Thomas’ first visit to the site. Welcome! And thanks for the tip — though we knew about this (Lynne and Victoria are two of our regulars here), we don’t want to miss anything.
Here’s a link to the thread about the article, with quite a lot of good comments.
http://isaacbrocksociety.ca/2013/07/28/fatca-a-simple-premise-gone-terribly-wrong-thehill-s-congress-blog/
And Lynne also made a thread about it on Maple Sandbox, also with lots of good comments.
http://maplesandbox.ca/2013/fatca-a-simple-premise-gone-terribly-wrong/
@thomas,
Welcome to the battlefield!
They are already gearing up for FATCA. I discussed it with the woman who has handled our banking at SB for over ten years. I told her that I wanted to take my name off our accounts as I was in the process of obtaining a CLN. I didn’t want my name on there during this process because I wasn’t sure what “gotcha” the U.S. had in store for my spouse should the CLN not arrive before they went completely FATCA. She told me “You can’t do that” Meaning I couldn’t take my name off the accounts. Since when?
I’ve been trying to get an answer from them about this as I’m unclear if this is a new tactic? Are they going to stop you removing an American spouse from your accounts if you wish to do so? At any rate my bank already knows one person on the accounts is a “U.S.person” even though I AM Canadian too.
Do the banks know what they are even doing? I think the woman at the bank was wrong that I can’t take my name off but, she seemed SO paranoid about FATCA and the imposition of the “rules” or violating any. I”d love to be a fly on the wall at their information sessions as to how they plan to implement FATCA. We know their going to ask you to waive your privacy rights. They have to or they can’t do it. If you don’t sign then your accounts can be frozen? The Canadian Bankers Association didn’t answer my question to them. “Will I be asked to waive my rights as a Canadian when you implement FATCA?” No answer.
Atticus
A possible solution: your wife opens an account in the same bank under her name alone. Then transfer the funds from joint account to sole name account.
@atticusincanada
It depends on the type of account. You can take your name off a simple chequing or savings account. If it’s a securities account or mutual fund it’s different. You can’t simply remove you name from this type of account because it is not cash. You and your husband will have to sell all the securities and mutual funds within the account, then your husband re-open a new account under his name only.
Help
I receive a letter from the IRS requesting to apply for a TIN for Withholding on Disposition by Foreign Person This condo had a loss from the time I was put on the deed and my total proceeds were $23.000.
but I do not want to file all these forms W7 and 1040 NR as it would get me in more problem regarding old green card etc and not filling closer connection. I would be broke between Canadian and US taxes. Most of my next worth is unrealized capital gain. I have minor CPP.
I made the mistake of depositing my check at TD Canada trust branch. Where most of my money is and there is electronic agreement with other Financial institution with the rest of my money.
Can the IRS contact TD Canada trust and raise the issue of US persons if I do not respond. Can TD then inform TD waterhouse and freeze my assets.
Does anybody know
Money:
A couple of things
1. The IRS cannot directly attach a levy on a Canadian bank. This was attempted back in the 1980s and was thrown out by the courts in Ontario.
2. Canada Revenue will not provide an assistance in collection order on behalf of the IRS to a Canadian citizen if the tax liability arose during the period the aforementioned person was a Canadian citizen.
Thank you for the responses. It’s a checking account and a mortgage. That’s it.
@Northern I wish I had a wife sometimes! LOL! I’m female and it’s my husband’s accounts I want to protect from all this mess. He WON’T go along with FBAR reporting on his accounts nor will he pay any fines out of his income to the Americans. Nope. I tried to use the edit function..didn’t see one so sorry for the double posts.
@money…here we go, I am sorry you are caught up in this mess. Is TD already turning over information?!
I am asking can they try and inform the bank that I could be a US person? They really have no evidence just my name and address. I have dealt with TD Canada trust for 40 years. I just do not want to have assets frozen. I wish there were some Canadian only bank and brokerage firm.
@money, do you have a local credit union that would be available. Some of them aren’t part of FATCA if they are below the asset threshold. We are going to our local only credit union now.
I have one credit credit union that will have to report but if you have stock and bond where do you hold them Transfer agents may demand info and ask if you are a US person. Check the UK model agreement if I didn’t 2008-2011 snowbird I would not worry. They check for US indices 5 year back. You must get under limit.
When I was snowbirding in Florida an agent at a Bank put me down as an American and froze my assets. I check on line, brought my Canadian passport and was fine the next day. Some direct brokerage ask if you are a US person, some ask if you a US citizen. National Bank direct ask if you are a US resident. They will not deal with them. You have a provincial driver license or health care card and you are fine.
@Money
I am a little confused. Without giving personal details, was the condo you sold in Canada or US?
Do you reside in Canada or the US? If you reside in Canada how did the IRS find you? You mentioned that you did not want to file a 1040NR. Assuming you have not been filing your 1040, how did the IRS contact you?
Atticus,
Sorry for the confusion over gender! My Latin isn’t good, but had you called yourself “Attica” I would have drawn a different conclusion!
Hello all,
In the context of the original posting, may I suggest it might be useful to collectively work to get data on just what is happening. For example, I have accounts in two of Canada’s five (maybe six) major banks. I am thinking to go into a branch of each of these and attempt to open an account using a small amount of money, say $100, in cash. What identification will they ask for? What forms will they ask me to complete? What information will they want?
One possibility is that there may not be consistent action at the front desk level, due to employees not being fully informed of current bank policy.
The information on the various banks might then be compiled and compared.
Any opinions?
Apologies for the ambiguity in my previous comment.
What I mean is to attempt to open an account in a bank with which I at present have no dealings, to see what questions they ask, etc. By using cash, the transaction would be insulated from my accounts at other banks.