This was proposed by Just Me and seconded by a few others so I thought we could take a shot at it together.
The basic idea is to create a one page (maybe two) tract that could be used as a template – something that could be adapted to the local circumstances. It could be sent to journalists, passed out during demonstrations or just emailed to people we know who are still very confused about what FATCA is, what it means, and why they should care.
Here are the latest updates as of September 17, 21:51 Paris time.
What is FATCA?
The Foreign Account Tax Compliance Act (FATCA) is an extra-territorial U.S. law that demands that all financial institutions in the world report to the United States’ Internal Revenue Service (IRS) the confidential account information of millions of people it classifies as “U.S. persons”.
What is a U.S. Person?
A U.S. Person can be a U.S. citizen, a Green Card Holder, or the citizen of another country who has a connection to the United States.
Here’s how you may have a US connection:
* born in the USA
* born outside the USA with one or two American parent(s)
* lived in the USA for a number of years
* visited too long in the USA in any given year
* married to a US person
* share signing authority on an account with a
US person
Chances are very good that you, or someone you know, is a U.S. Person. That means FATCA affects you personally. Millions of people worldwide who do not consider themselves to be U.S. citizens are still considered U.S. Persons by the U.S. government even if they have never lived or worked in the U.S., are citizens of another country, and have never held a U.S. passport or Green Card.
But I’m not a tax evader or a U.S. citizen or Green Card Holder!
Under FATCA you are presumed to be guilty until proven innocent.
If your local bank suspects you are a U.S. Person, they will require that you prove you aren’t.
If you clearly are a U.S. Person, and your country has signed an agreement with the United States (called an “IGA”), then your local bank will send your account information to your local government who will then turn it over to the United States.
Under these agreements, this will happen even if your country has strict laws protecting personal privacy. So far the following countries have either signed these agreements or have agreed to do so: UK, France, Germany…..
What will the United States do with that information?
Under American law U.S. Persons are also U.S. taxpayers. Those who live outside the United States are required to file tax returns, bank account reports and pay American taxes. This is true even if the U.S. Person earns no income and has no assets in the United States.
You might consider yourself a responsible tax-paying citizen of another country but the United States sees it differently. If they think you are a U.S. Person then they feel they have the right to add you to the American tax base.
There are others ways they could use that information. If enough countries are bullied into complying then the United States government will have a master list in their databases of all the people (and their assets) in the world who have any connection however innocent to the United States of America. That sounds a lot like the recent NSA scandals where the United States spied on citizens of other countries.
FATCA is spying by other means.
But I thought FATCA and all those reporting rules only applied to the rich?
Not true. FATCA impacts ALL U.S. Persons: rich, middle, or low income .
The filing threshold for one form, the FBAR (Foreign Bank Account Report), is only 10,000 USD. This threshold is the total of all that person’s accounts (checking, savings, and retirement) combined – not the value of any one account. This means that even very low-income U.S. Persons must file and face stiff penalties – up to 500,000 USD and 5 years in jail – if they fail to do so. The American IRS can impose these fines even if the U.S. Person is too poor to file a tax return and doesn’t owe any tax.
I’m not a U.S. Person and I don’t have any connection to the United States. What does FATCA have to do with me?
FATCA impacts ALL citizens in ALL countries in three ways:
1. All financial institutions worldwide are affected by FATCA. The billions they will spend in compliance costs will be passed along to customers in all countries through higher FEES.
2. Local governments and local taxpayers will bear the cost of the staff and information systems required to implement FATCA in that country.
3. Existing privacy and anti-discrimination laws will have to be downgraded in every country in order to facilitate FATCA. This means that citizens everywhere can expect less protection of their privacy from their local government.
Part IV (What they can do about it)
Some ideas for this section:
Here I would point them to Isaac Brock first as a resource. As them to join us or pass the link around to people they know who are affected by FATCA.
Then we can list the other sites we think they would find useful: Maple Sandbox, ACA, AARO and so on.
@northernstar,
For certain they can’t deport you. You are a Canadian citizen. This is in any case not a deportable event – merely being a dual living in Canada with legal local Canadian accounts.
Why jump the gun and tell the bank anything? Currently, FATCA is NOT law in Canada. Currently, the bank has no right to ask you about your national origin and you are not compelled to tell them. There was some discussion of a reported incident at a major Canadian bank regarding a certain type of account:
http://isaacbrocksociety.ca/2013/08/01/td-waterhouse-begins-fatca-hunt-let-the-expatriation-games-begin/
nothernstar, my husband gets dividends from theUS owned company he works for in USD from the US. They automatically withhold at the source because he hasn’t bothered setting it up so they don’t. Periodically, he has to file as a Non-resident alien to get the refund and it upsets Turbo Tax to no end when he is doing Canadian taxes. I think though if you are getting something from investments or pensions that you probably set up a withholding percentage or something like US workers do with their W2’s. Just paperwork and no big deal. Your banks wouldn’t be involved as this occurs on the US end of it.
Or, for your consideration, one more One Page version (with ‘Stop FATCA’). I didn’t have the margins and the font you used, Em. FATCA OnePageFactSheet (I can’t put this into pdf format until I get some more ink for my printer.)
@badger…I will not be volunteering anything but the worrywart I am I look ahead at what if?
I have no mutual funds…just RRSP GICs…most in a savings one earning very very little interest. When the others come due that is where it will go. I have no US social security or savings or investments. I have never received a cheque from the US government, except in the 80s when the IRS sent me a $2000 k refund which I sent back immediately by registered mail.. I called them and said I had not earned any money in the USA since January 1969. I guess the IRS person who did my US taxes got confused at my high paying Canadian taxes that I paid of only Canadian earned income.
@YogaGirl
I don’t get US anything.
So the bank can’t withhold anything? I can co-operate when I am asked but they can’t kick me off my accounts? I can’t deported. I just won’t go to the USA,, which I have no desire to anyway.. so life even without a CLN can go on for me. I am just curious because there may be another Canadian ex American who has not filed taxes nor renounced and has not got a CLN..
northernstar, since money is withheld at the US end, if you don’t have source income from there they can’t do a thing and Canadian banks are not legally bound to help the IRS get tax money from you. In fact that would be pretty much stealing if they did.
And there is no way the Canadian govt is going to deport you for being a US citizen who isn’t tax form compliant. I believe Flaherty has stated that the CRA doesn’t collect taxes or fines for the US from Canadian citizens.
Are you eligible for a CLN? You can get one without bothering to back file. If the US is not a place you visit, you can get your CLN and simply go on with your life. The State Dept has nothing to do with the IRS stuff. You haven’t been a taxable US person since 1969. I wouldn’t be losing sleep over this if I were you. Get your CLN. It will be fine and then put this behind you.
@yoga girl.
I went to the US counsel in July for the CLN…I am waiting. With IBS help I found I didn’t have to file FBURS and US Income Taxes. I just worry alot. because it has been said before on IBS..the US government can suddenly change the rules.
Great editing work, Yoga Girl.
I personally prefer the use of the word chequing vs checking, as not to Americanize any of the handbill to regular Canadians.
I know you’ve already achieve the laudable goal of getting it down to one page and no further tweaks are really necessary, but would others consider rather than use:
“FATCA requires financial institutions to report annually to the IRS on a variety of financial accounts like checking, savings, retirement and investment accounts.”
to say:
“FATCA requires our financial institutions to report annually to the IRS on everyday bank accounts and more.”
…perhaps better persuading the reader that the US intends to spy on us? what is that “more”?
bubblebustin, works for me. The goal of a fact sheet should be “as simple and easy to relate to as possible”.
And I do like the emphasis on spying and inventory taking (because I think that is the true purpose) as it is more likely to stir up people’s sense of injustice. One thing I have learned about people in general (although in Canada it is much stronger than in the US) is that most of us don’t outgrow the grade school idea that everything must be fair and that people who follow the rules as they understand them, shouldn’t be punished if they make mistakes or are caught up in “gotcha” type rules whose design seems arbitrary and mean-spirited.
The more we can hit on the latter – the better.
I don’t own the sheet. I merely revised. Tweaks should be made even for things that seem small when the end goal is making the info as accessible as possible.
northernstar, I can understand worrying but it looks you are well out of this. Once you have your CLN in hand, they can change the rules all they like but they’ve already let you go. Rest easy.
em, yogagirl, bubblebusin and northerstar and everyone who worked on this.
Wow, great GREAT work!. It is perfect – short, simple and to the point. This is going to be soooooo useful. 🙂
@ Victoria
I worked on it yes but it went from being a “fat sheet” to a “fatter sheet”. It was Yoga Girl who made it a “fact sheet” and it was your groundwork that made that possible. Now, how do we keep it from being buried in the archives? Anyone coming to Brock for the first time will never find it.
What I would like to take credit for is offering the 100 LCU challenge which Yoga Girl accepted. 🙂
Yay, em. I hope the condensed version gains you more than you wagered!
@victoria
I can not take any credit , only as a cheer leader.. 🙂
It took a lot of work on the others to do it.
It was quite a job but they came through with magnificent work…Like Jack Webb always said, “Just the Facts, Mam, just the facts.” They came through.
A group effort – the BEST kind. The 100 LCU challenge was inspired. 🙂
Just an idea for keeping the fact sheet accessible. Maybe we could put something like this up at the top on the right side:
Want to know about FATCA, “the worst law most Americans never heard of?” Click here for the Isaac Brock Society FATCA Fact Sheet.
Ever wondered what really happens at a U.S. consulate when a U.S citizen goes to renounce? Be prepared and read the Isaac Brock consulate report first.
Do you have questions about renouncing/relinquishing US citizenship? You came to the right place. Click here for everything you need to know before making that appointment.
Or something like that. 🙂
I think there are a couple of errors in the Fact Sheet, being:
1.) Who is a U.S. Person?
“* visited too long in the U.S.A. in any given year (180 days over 3 years is the maximum time allotted)”
I believe the correct number of days over 3 years is 183 based on a weighted calculation NOT 180.
2.) What will the U.S.A. do with all that information?
“The IRS uses it to verify its own tax records and is authorized to hand over the information collected from other U.S. agencies including the NSA and the FBI.”
I believe it should read “…is authorized to hand over the information collected TO other U.S. agencies…”
@only a canadian
I’m glad you brought that up. Is the IRS authorized to exchange info with the NSA and FBI?
Just to throw a spanner in the works, I’m tweaking it some more but I’ll have to send to someone as a PDF. Who can I send it to?
@ bubblebustin
I believe information type forms can be shared with other agencies like NSA and FBI. The FBAR certainly can be. It says so right on it. Remember FATCA isn’t about tax calculations or taxes due, it’s about account details. For some reason that type of information is “fair game”, although there’s nothing fair about it in my mind.
I found a spelling error in the last line – should be “Abroad” not “Aboard” but as my husband always says, “That’s close enough for government work.” I did a little fix anyway and made a corrected PDF — so easy to do on a Mac, so I found out.
Still tweaking I see. Excellent.
One thing about the pdf form that made it hard to work with is that it was “read only”. You couldn’t make changes without converting it to a word doc (at least I couldn’t).
There is room to make the sheet more country specific by changing the “contact officials” thing to the terms used in your country like in Canada, we’d contact our MP’s.
Em, or whoever has the sheet for final copy, is there a way to make the pdf revisable for specific tweaks? Those that would make the sheet read more locally and not world generic? Just a random thought.
Victoria, I just like to edit and revise. No incentive is really necessary to get me to do that. Thanks for the initial work! Very valuable.
Once we have a workable fact sheet. We could think about sneaking it in to comment sections on FATCA related articles as well as handing them out at public meetings and demonstrations.
Admin, can we have a dedicated page for the fact sheet, so no one has to hunt through the comment sections to find a link?
I’m emailing to someone who can post it as a word document. I would like it if everyone would have a look at it. I’ve added a few things, like mentioning that the accounts have a specific threshold and the need for some accounts holders to have to prove that they aren’t USP’s (prove a negative).
I also cleaned it up a bit, added some emphases where needed and test printed it to be sure it printed with the narrow margins I gave it.
@Em and @bubblebustin, re the data mining and dissemination intent of FATCA: I found this http://www.acfcs.org/by-taking-certain-steps-the-irs-may-share-bank-data-it-gets-from-foreign-banks-under-fatca-with-other-us-agencies/ and although I can’t remember exactly where I saw it, there have been other discussions of the intent to use the FATCA data for sharing outside of the IRS, at IBS and elsewhere.
I found these very valuable nuggets in some of Just Me’s comments elsewhere http://americanexpatchiangmai.com/is-fatca-doomed/comment-page-1/#comment-29250 . Read the whole letter by Levin.
http://www.bsmlegal.com/PDFs/Carl Levin.pdf
See the section starting at;
“…7) Treating FATCA Disclosures As Non-Tax Return Information 11
Finally, one additional issue is critical to successful implementation of FATCA’s disclosure obligations: treating FATCA offshore account information as non-tax return information to ensure its accessibility
to law enforcement and national security communities combating crimes other than tax evasion…” FATCA guidance and implementing rule should create account FATCA forms that are not designated as tax return information but, like FBARs, may be provided to law enforcement, regulatory, and national security communities upon request. FFIs are not,after all, U.S. taxpayers, and will not be supplying tax information on behalf of their U.S. clients; they will instead be providing information about accounts opened by U.S. persons. ….”
….”Foreign account information is too important to a wide range of civil and criminal law enforcement and national security efforts to be designated as tax return information bound by Section 6103’s severe restrictions on access. FFI forms, like FBARs, provide account information rather than tax return information, and should be made available to the larger law enforcement and national security communities. Similarly, FFI Agreements,
auditor verification forms, copies of actual account documentation, and similar materials should be treated as non-tax return information available to the larger law enforcement, regulatory, and national
security communities.In addition to giving FFI forms the same status as FBAR forms, the implementing rules should construct those forms to ensure that they collect and produce account information in a standardized electronic format that will enable efficient analysis of data. …”
Here is the link to the FATCA FACT SHEET
Thanks to everyone who worked on it!
And to everyone who will be passing it out, too!
I think that’s a good suggestion to put the link in a permanent place so it doesn’t stayed buried in a thread. I’ll do that tomorrow. Meanwhile I’ll put it here.
@pacifica777
Cool!
One question: is that supposed to be something that is to be still worked on, or is it meant as a “final” version to be used to tell others about FATCA (e.g. emailed to MP, family, etc)?
If the latter I’d suggest converting it to a PDF. Would make it more likely that people would be able to read it without hassle.
My 2 cents
@tdott,
Sorry, I dunno, as I’m just the person who put it online — but one of the authors will be able to answer your question.
tdott, the fact sheet is in a “final” version but nothing is so final that it can’t be improved upon if someone sees a way to do it. Keep in mind that it really needs to stay at one page. Most people won’t read anything longer, wordier or without bullet points to aid scanning. Oh, and you can always convert it to pdf yourself if you have the software. Barring that, you could link to it if you are sending it by email – which is why it would be great if it had a dedicated page here at Brock.
@Pacifica777
Thank you for posting my latest input on the one-pager that we’ve been working on. As it is another rendition of Yoga’s Girls one-pager, it should be reviewed before anything is finalized. That’s why it’s not in PDF. Opinions? Should we run a disclaimer at the bottom, that it’s not legal advise, blah, blah, blah?