Excerpt:
There was one side of Freeland, in particular, that McQuaig kept poking: Her supposed un-Canadianness. “Toronto is my home, I’ve lived and worked here all my life,” McQuaig noted in her opening remarks. It was a clear side swipe at Freeland, who’s been abroad for years in Russia, the U.K. and the U.S., and settled down in Toronto Centre only recently. Later on came McQuaig’s straight-out jab: “You’ve been there in Manhattan, hanging out with the rich,” McQuaig told Freeland, speaking, for those in the know, about her competitor’s former gig in New York and her recent book on the ultra-rich.
I suspect Freeland chose not to respond in kind. Because if she’d wanted to, there was an obvious line of attack. For all her fondness of being a true Canadian and disdain for hanging out in Manhattan, McQuaig has publicly praised a controversial U.S. law that might end up encroaching on the constitutional rights of a good many Canadians, including, possibly, Freeland and her family.
@ bubblebustin
That’s fine but I would never have thought of FATCA Canada. More likely: FATCA horror, FATCA outrage, FATCA evil, FATCA pain, FATCA victims ………….
The guy on CBC didn’t get it quite right. Nobody ever get’s it quite right. If your FI doesn’t have it on file now that you are ‘Murrican, then you won’t show up in their electronic search for US ‘indicia’
Existing accounts under 1 million are subject only to electronic search of the FIs database.
Accounts under 50K and RRSPs will be totally exempt.
@ KalC
The responsible officers (ROs) at the banks might get so paranoid about missing a USP (remember those penalties?) that the electronic search will be ditched for a questionnaire sent to every single client, no matter what size the account. I know, I know — don’t worry, be happy!
I kind of used to be a democrat but I am not not a member of USA and do not believe in either Harper or Ford (both are more conservative than American democrats). Democrats abroad have finally recognized FATCA. I copied page 6 below from their newsletter sent today. After reading this, I am proud to be a democrat although I am no longer American.
The other thing is that I have fond memories of JFK but I was at a naive age of 8 when I did not have gfs.
I cannot post the document so I just paste what dems abroad now say about FATCA:
As most Americans living abroad are aware, there has been a long-standing requirement to report accounts held in foreign financial institutions (the FBAR report), but starting in 2009, new and more invasive US reporting requirements were imposed with the passage of the Foreign Account Tax Compliance Act (FATCA). This act is the result of Congressional and IRS efforts to improve
tax compliance among U.S. citizens with foreign financial assets. In other words, the IRS wants to catch
people who are hiding assets to evade taxation; but as all of us who live and work abroad and comply with tax obligations know, living and banking offshore does not equate to tax avoidance!
In response, Democrats Abroad created the FATCA/ FBAR Task Force in 2011 when it became clear that the additional reporting requirements imposed by FATCA were beginning to have serious impacts on the personal affairs and privacy of Americans living abroad. The Task Force has been working to communicate those adverse impacts to the government committees and agencies responsible for implementing FATCA—and has made numerous recommendations to reform the regulations in
order to provide relief to law-abiding citizens living abroad. Thus far, our efforts have met with some
success, including raising the threshold of foreign income required to be reported. But we still have much work to do.
Because of FATCA, law-abiding Americans living abroad now find their financial lives exposed to a degree of scrutiny–under threat of severe fines and penalties and fines–to which Americans without foreign financial assets are not subjected. The impact on the personal affairs and privacy of overseas Americans has, in many cases, been very serious and financially burdensome, including an increase in cost to file taxes, the forced closure of existing accounts and inability to open new accounts, extra scrutiny of assets shared with a non-American spouse, exorbitant penalties for non-compliance, and the unjust assumption that Americans living abroad are tax cheats and/or money launderers. These are the issues
that the Task Force is working hard to address.
There are some things that every American abroad can do to help us and help themselves. First, you can call or write your congressional representatives (frequently) to let them know how the regulations affect you. The more they hear about it, the more they are likely to appreciate the gravity of the problem. Second, when filing your taxes from abroad, you should seek professional tax advice. Usually the American Citizen Services webpage of your nearest US Embassy or Consulate will have a
listing of US tax advisors in your area, but you should assess advisors very carefully before hiring (and note that the Task Force does not and cannot provide professional tax advice). Third, you can be informed. The IRS has recently developed web-based resources focused on overseas Americans (one of our recommendations), with new resources added regularly. The IRS resource page can be found by clicking here. The IRS still largely leaves it up to the individual taxpayer to sort through the
process, but there is a lot of useful and practical information and advice on their FAQ, found here.
In our next update, we will bring you a few more useful resources and a report on our discussions with our
contacts on the Senate Finance Committee, and in the interim, we will be finalizing the content of our dedicated space on the Democrats Abroad website, which will consolidate information and detail our efforts.
The Democrats Abroad FATCA / FBAR Task Force is
composed of Joe Green, Chair (Canada); Carmelan Polce
(Australia); Stanley Grossman (UK); Maureen Harwood
(Canada); and Joe Smallhoover (France)put it on my website:
From: Democrats Abroad [da_intl_emails@democratsabroad.org]
Sent: Tuesday, November 19, 2013 3:26 PM
To: Ritland, Kermit
Subject: November Newsletter: JFK, FATCA and DA news
Dear Kermit,
We are pleased to announce the relaunch of the Democrats Abroad newsletter, which you will find attached to this email.
The articles include recollections of JFK’s assassination in Dallas, information on FATCA, and news about Democrats Abroad events around the world. We hope you will find this newsletter informative and interesting.
As always, your questions and suggestions are welcome.
This message is paid for by the Democratic Party Committee Abroad, Democrats Abroad,
PO Box 15130
Washington, DC 20003
United States
It is being sent to you because you are a member of one or more of these Democrats Abroad group(s): DA International and DA International.
If you have moved back to the US , please click here to send an email letting us know and we will remove you from the membership list. If you have moved to another country abroad, or to another region in your country, please click here to email us your new address, and we will transfer your membership.
If you want to receive only Voter Information emails, please click here.
If for a reason other than those above you want to completely remove your membership from ALL groups in Democrats Abroad, please click here to send an e-mail letting us know, and we will completely remove your membership from Democrats Abroad.
What if?
from Deloitte Frequently Asked Questions: http://www.deloitte.com/assets/dcom-unitedstates/local%20assets/documents/tax/us_tax_fatca_faqs_061711.pdf
39. We have some non-U.S. clients who will not give us the documentation needed for FATCA. For example, in the smaller towns we have customers who do not have a passport or drivers license. It seems that under FATCA they will be classified as “recalcitrant” and subjected to withholding. Is there a process to exclude these people from the documentation requirement?
Deloitte: No. Generally, any account holder whose account is at least $50,000 that does not comply with reasonable requests for information necessary to determine whether its account is a United States account will be a “recalcitrant account holder” and will be subject to 30% withholding on withholdable payments and gross proceeds from the sale or disposition of U.S. assets which can produce interest or dividends.
46. Are other FFIs planning to use the $50,000 de minimis rule?
Deloitte: We understand that a number of FFIs are not going to use the $50,000 de minimis exception due to difficulties in changing multiple systems to calculate the value of its depository accounts.
@calgary411
Thanks for that post from Deloitte…
That has been my position all along, that those that think the $50K de minimis rule is somehow a safe harbor for them are just being terrible naive and taking undue risks. Of course, I have been accused as scare mongering, but the reality is, it is just easier to give the IRS everything, and ignore the de minis rule..
@ Just Me
I think you have been right all along. The banks will do what is easiest and what will expose them to the least risk. They don’t want to incur the wrath of the IRS. It’s those penalties they fear AND the potential of losing their ability to play in the US markets.
I would like to start with the following disclaimer: we have no idea what the banks are going to do, and we won’t know fully for another 12 to 36 months.
I agree with Just Me, I don’t believe the banks will ultimately limit reporting to those accounts over $50,000. This isn’t meant to be scaremongering, but it is being pragmatic (IMHO, I could well be wrong).
The guidance from HMRC for the UK/US IGA makes clear the banks may utilize 3rd party contractors for both searching out US Persons.
Let’s take a big leap of the imagination and consider what we would do if we were the bank official in charge of FATCA for a FFI. Would we tie up a large number of our local bank staff investigating and maintaining US Person accounts, or would we farm the work out to (less expensive?) contractors (located who knows where)?
There is also an assumption being made by some that the search will be a cursory electronic one. That’s true for the initial go (July 2014), but according to the IGA, in 2016/17, the searches will continue and will at that time be manual (whatever that means). In other words, as time goes on, the search for US Person accounts becomes more involved. Also, by 2016/17, we are in to reporting all transactions in the account as well as balances throughout the year.
As for being that bank official, what would you do?
1) Have local dedicated bank staff searching and maintaining US Person accounts (forever).
2) Send only the search work out to a contractor, and isolate ‘ALL’ US Person accounts within the FFI, handled by local bank staff, for easier control of monitoring daily activities.
3) Isolate ‘ALL’ US Person accounts and have the contractor handle searches and monitoring of all those accounts.
Whether it’s 1), 2), or 3) wouldn’t it be easier (and more cost effective) to just include all US Person accounts in the reporting? Remember, no matter what we think of the banks or their actions to date, in reality they would prefer not to be dealing with any of this altogether.
Again, we DO NOT know what each bank will do at this time. I would doubt many of the banks know exactly what they are going to do at this time.
For those who are compliant, including the filing of Form 8938, there should not be much to be worried about. But I am. I really, really am. Our financial data is going to be on how many computers located who knows where and being shared with who knows who? Forget bullying, sovereignty, and CBT versus RBT for a moment. As a US Person living in a country that has already signed an IGA, this is my biggest concern. But then, I’m a luddite by nature.
@OAP, I totally agree. Identity theft will probably rise significantly. Wasn’t it some Canadian banks who were already subcontracting some work to India?
@OAP and Chris,
I too agree with what is pointed out.
The idea of “Identify Theft” in the probability would resonate with most Canadians: http://www.cbc.ca/news/canada/british-columbia/rbc-replaces-canadian-staff-with-foreign-workers-1.1315008
@Calgary411
Getting back to your post referencing Deloitte, I believe that quite a few people will be classified as recalcitrant, not because they are taking a position of refusing to cooperate on FATCA, but because they just don’t like filling out forms. I certainly know a lot of people like that who are challenged by even the simplest form. And, if the form is something devised by the IRS, well, we know what’s that’s like.
The net result of all of this is that the IRS will end up with info on persons completely outside their scope of reference.
Reminds me a bit of the first draft FATCA regs that included any account in the world with a P.O Box address as a possible reportable account.
Hazy,
I believe you are absolutely correct!
… and there was that Michael Young article brought to our attention by Eric:
http://isaacbrocksociety.ca/2012/12/07/fatca-facilitating-attacks-by-terrorists-on-citizens-abroad/
@OAP
Could you send /post a link to the info that indicates by 2016/17 all transactions to the account will be reported? At our protest last week, I had a long chat with a banker who was not part of the conference, he was just passing by. When I mentioned that at some future point, all accounts with possible US indicia would be singled out, regardless of balance, he said it was not so. I wonder if that stipulation only applies to accounts over $50k that were originally tagged and that I misread the info at the time. I told him I had seen this on one of those slide-type presentations that various firms post and he said who ever it was had it wrong. TIA
@Tricia
It may or may not be in the IGA itself, but may be in the either the IRS regs., the additional regs, or the guidance issued by HMRC. That’s about 700+ pages, so give me some time.
New commenter Stephen Smith, calls the article a “hilarious conjectural smear job” against Mcquaig.
Tricia and OAP,
Will this help / what is asked? Page 4, Final FATCA Regulations Timeline, and other parts of this, again, Deloitte document: http://www.deloitte.com/assets/Dcom-Switzerland/Local%20Assets/Documents/EN/Tax/FATCA/2013/ch_en_FATCA_Indepth_Analysis_24042013.pdf
This interested me: Draft Form 8966 http://www.irs.gov/pub/irs-dft/f8966–dft.pdf, the individual form / information for each of us ‘US Persons’ to be submitted to the IRS by our foreign financial institutions? http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Tax/us_tax_FATCA_IRS_Releases_Draft_Form_8966_FATCA_Report_081313.pdf
RBC site also discusses “The Road Ahead” (but only up to that time period). RBC Royal Bank website: http://www.rbc.com/aboutus/fatca.html, including “The Road Ahead.”
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@Tricia, Calgary411
I have only looked at the UK IGA and HMRC guidance notes, so the following will only pertain to a participating FFI within a Model 1 IGA. An FFI within a Model 2 IGA, or a participating FFI in a country without an IGA may have completely different regulations. (As we know, the positives of an IGA for an FFI is much reduced regulations.)
As with everything associated with the IRS, the wording of the IGA is very open to interpretation in many areas.
To simplify, I’ve narrowed my comments to include only individual accounts (which I believe include joint accounts), that are pre-existing accounts, and that are depository accounts. I’ve also looked at pre-existing ‘low value’ accounts ($50,000 to $1 million). There are different account types and these can be confusing. For example, on Victoria’s blog on the Flophouse mention was made of the reporting of the sale of property being reported by the FFI for the French IGA. The same exists for the UK IGA, BUT it is limited to deposits into custodial accounts (not deposit accounts) only, after 2016.
As to reporting: from 2014 onwards, the account balance (along with all account information) is reportable. Starting for 2015, “the total amount of gross interest paid or credited to the account in the calendar year or other reporting period” becomes reportable. (HMRC Guidance, page 136) This agrees with the chart in the Deloitte link. How will this is handled by the FFI? One assumes it will be a yearly figure, but many accounts pay interest monthly (will it be I figure or 12 figures reported). In the Deloitte link, reference is made (in the chart on page 4) to additional “gross proceeds” reporting by the FFI’s starting for 2015. It’s uncertain to as to what these are, and to which accounts this applies.
Additional reporting (account transactions, etc.) may be in Model 2 IGA’s, or non-IGA covered participating FFI’s. I agree with Tricia, I’m sure I’ve read it somewhere.
As for the threshold of the accounts to be reported, in the UK IGA, Annex I, Article II, paragraph A, it reads “Accounts Not Required to Be Reviewed, Identified or Reported. Unless the Reporting United Kingdom Financial Institution elects otherwise,….” This indicates the FFI can determine the reporting threshold, and it appears to be confirmed in 5.1 (page 102) of the HMRC guidance.
My eyes are swimming at this point, so I’ll stop for now.
UK IGA:
http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-UK-9-12-2012.pdf
HMRC Guidance Notes:
http://www.hmrc.gov.uk/fatca/130531-guidance.pdf
Again, the Deloitte doc.:
http://www.deloitte.com/assets/Dcom-Switzerland/Local%20Assets/Documents/EN/Tax/FATCA/2013/ch_en_FATCA_Indepth_Analysis_24042013.pdf
(I’ve just noted that the Deloitte doc is on a Swiss web site, so I don’t know if this Swiss-centric [Model 2 IGA] or not.)
I will add one other comment, and it may seem silly. It’s not. When reading the IGA, guidance, or comments, be sure to distinguish whether what you are reading applies to the regulations for ‘Reportable Assets’, or the regulations for ‘Specified US Persons’.
Thank for your further comments, OAP. Reading and interpreting any of this is obviously entirely over my head.
Here is another Deloitte resource that may be useful: http://www.deloitte.com/view/en_US/us/Services/tax/930c9948e681a210VgnVCM100000ba42f00aRCRD.htm?id=us_dcom_gif_tax_fatcahp_banner_092811
@OAP
Thanks. I shall have to spend time doing some very slow reading.
I don’t know how to copy/paste on my phone but if you click Calgary’s link and click on 2016, the last item deals with a date to report “non-high value accounts.” I believe that is exactly the same thing I have read before. Maybe I am not understanding correctly? And thanks for that Madame Calgary! Boy sounds cold out your way. Brrrrr.
Tricia, lots to try to understand there.
Weather is warming slowly. We have frigid snaps but they usually don’t hang around too long before a “Chinook” blows in warmer weather. As long as we have a lot of the beautiful sunshine we’ve had today and low or no north or southeast wind, I can get through the cold snaps, even with required dog walking (both the Lab and I need boots).
@OAP & Calgary
I think there is a slight clarification. What that seems to mean, after reading it in three different places, is that by December 30, 2016, the FFI will have to search for US indicia for the low-value (i.e., less than $50k) accounts.
Calgary, I love it when we get your chinook winds. And I know what you mean, I can take the cold when the sun is out but when grey, winter/cold totally depress me. Enjoy your walks!
Thanks for taking the time to study it more, Tricia. So, eventually, they’ll be looking for it all?!?