Am I dreaming? Could we open our internet browsers some morning soon and see this headline? Northernstar talks about the ripples of anti-FATCA sentiment spreading throughout the world. We are seeing it in increased media reports like this one that JustMe pointed out: http://www.freeenterprise.com/economy-taxes/fatca-trap-opposition-builds-can-intrusive-foreign-tax-compliance-law-be-stopped, and this one that describes Ruth Freeborn’s FATCA nightmare: http://www.mcclatchydc.com/2013/11/27/209810/new-tax-law-driving-expats-to.html.
Maybe, just maybe….
Au contraire, Pierre. I checked my own comment and I certainly didn’t do any Conservative bashing, although I know people here in Canada and in the USA use comment sections to take their digs at whatever is the other side of their political spectrum. I think the article itself gives a good boost to the anti-FATCA cause and I could find no sign of Conservative bashing in it. Maybe my sensitivity meter is not calibrated as finely as yours. I can remember when we rarely found an article anywhere about FATCA and I have to say I’m delighted each time a new one pops up these days which doesn’t put the EMphasis on “tax cheats”.
What needs to be said to the CBC and other media outlets is simple. Even if there were no fines or penalties, which is hard to believe once they have you, the filing fees will be around 2000 to 3000 dollars and you better get a good lawyer to approach it properly with the IRS. Multiply that times 1 million….that is a lot of money gone from the Canadian economy. That is presuming a 1 yr old who happens to be a “US Person” finds a good lawyer…..
@Em,
Which CBC article are we even talking about here?
Apparently the CBC article in which many, many Canadians show their outrage. Sorry, I don’t agree. Our current government and all parties need to stand up to the US on this.
But then, I’m reading this online and by the time I get to the end, I guess my thinking about all FATCA will be even more skewed: http://isaacbrocksociety.ca/2013/11/25/the-best-fatca-video-yet-american-empire-and-the-most-important-law-youve-never-heard-of/comment-page-2/#comment-720620.
I want Canada standing up for us.
Not according to these guys. Apparently we’ve given up the fight and will amend our constitution to comply with FATCA!
http://www.iexpats.com/canadian-banks-throw-towel-fatca-fight/
From the fine article:
I literally burst out laughing when I saw this.
The writer of the article is obviously clueless re the history of Constitutional amendments in Canada.
Who is feeding iExpat? The beginning was obviously a ploy and spin by the CBA. Curious about the line about the Constitution.
I suppose on the plus side, we got an upgrade from protesters to “lobbyists”. 🙂
@tdott, LOL I guess that makes us more legit eh?
@ WhiteKat
I was talking about this one, maybe Pierre D was talking about a different one? It gets confusing with so many articles out there … and yet it is oh so good to have so many articles out there.
http://www.cbc.ca/news/politics/canadian-banks-to-be-compelled-to-share-clients-info-with-u-s-1.2437975
Pierre D was, I believe, commenting about the previously linked CBC radio article. He accused the CBC in this particular broadcast of being critical of the Harper government. That fact in itself isn’t any more of a surprise than Fox News being critical of Obama.
What I found interesting was journalist Harvey Cashore’s apparent lack of basic understanding of the difference between tax avoidance and tax evasion. He implied anything “offshore” must be illegal tax evasion. All of us ordinary taxpayers regularly engage in “tax avoidance”. For example when we claim our personal exemption, contribute to an RRSP or TFSA, receive income in the form of dividends or do year-end tax loss selling to offset previous gains. All of this is perfectly legal tax avoidance strategy and we would be fools to not take advantage of it!
For wealthier people (not a crime, yet, so far as I know) so called “offshore” investment vehicles may be a perfectly legal, prudent investment strategy. And yeah, they can afford to hire expensive lawyers to help them arrange their financial affairs to minimize tax. But until the line is crossed into illegal evasion , merely having an offshore account is not evidence of wrongdoing. To the best of my knowledge, the Canadian government has not made investing outside of Canada illegal. Harvey Cashore basically accused James Love of aiding and abetting clients to illegally evade tax, an allegation which is verging on libelous. And then, because the man was appointed head of the Canadian mint, somehow the Harper government must be in favor of tax evasion for the wealthy. This is not the first time the CBC has engaged in this sort of questionable reporting. If Harvey Cashore doesn’t understand the basics, little wonder he doesn’t get the implications of FATCA. Unfortunately, they disallowed commenting on that radio interview.
Don’t get me wrong, I still watch the CBC. They’re pretty good at reporting the weather, traffic accidents, and “only in Canada” articles. But as far as in depth, factually correct, unbiased reporting goes, I take everything they say with a healthy dose of salt. It’s not surprising that they have a hard time reporting accurately about a complex issue such as FATCA; it’s not sensational, doesn’t bleed and the effect on most Canadians is indirect.
I’m sorry, this is long: but it is my email to Harvey Cashore at CBC:
From: calgary411
Sent: Thursday, November 28, 2013 11:30 AM
To: Harvey.Cashore@cbc.ca
Subject: Imminent US FATCA Law in Canada
Dear Mr. Cashore,
There are many so-called ‘US Persons’ in Canada (many of whom do not even know yet of FATCA and thus the need for our Canadian media to make more of them aware).
A segment of those one million persons, 3% of Canada’s population, plus depending on the family members and even business partners who will be affected by having their financial information sent to a foreign country, have been doing our best to have this story before ALL Canadians. The James Fitz-Morris article http://www.cbc.ca/news/politics/canadian-banks-to-be-compelled-to-share-clients-info-with-u-s-1.2437975 and
Anna Maria Tremonti’s http://www.cbc.ca/thecurrent/episode/2013/11/13/fatca-under-fire-from-tax-experts-canadian-citizens/ encouraged us to think that finally this was going to be the news story it should be.
Two more examples that I hope you will take time to read are below. Coverage of this is so important as it is reported that our Canadian government is soon to announce the results of their negotiations with the US regarding a Canadian intergovernmental agreement which may waive the rights of US-defined ‘US Person’ Canadians under the Canadian Charter of Rights and Freedoms.
1) Here is a link to the egregious story of one Canadian in her submission to the US Ways and Means Committee: http://waysandmeans.house.gov/uploadedfiles/patricia_anderson_daddario.pdf; and
2) This is the message that I sent to Anna Maria Tremonti regarding my family’s situation:
Thank you for your segment on extra-territorial FATCA, Anna Maria. My comment is long and best given in my latest correspondence with my Canadian government representatives. The plight of minors and the disabled deemed incompetent was not raised – that the US ALREADY asserts that their disability income is taxable, and their Canadian Registered Account RDSPs are taxable ‘foreign trusts’. And that for them there is NO remedy – the US prevents them from ever renouncing/relinquishing. This is the already egregious harm that FATCA will just pile on to them and their families. Same for our children and their RESPs. And our TFSAs.
QUOTE:
From: calgary411
Sent: Wednesday, November 06, 2013 11:23 AM
To: Minister James Flaherty ; Michelle.Rempel@parl.gc.ca ; Prime Minister Stephen Harper
Cc: Kevin.Shoom@fin.gc.ca
Subject: Canadian Registered Disability Savings Plan
My Canadian Government Representatives,
You have heard from me many times regarding the concerns that I have that the Canadian registered accounts that Canadians are encouraged to save in, the TFSA, the RESP and the Registered Disability Savings Plan (RDSP), which is as well considered a “foreign trust” so not an advisable investment for Canadians with a disability or for those who are Holders of the RDSP (like me for my adult son) who have a ‘mental incapacity’ disability. (As well mutual funds for US Persons are PFIC’s according to the USA.)
Can you explain to me why there is NOT a “warning sticker” of some type on these investments for anyone who may have a ‘US indicia’ and, in this case especially, for the RDSP? I have just gotten this email which encourages Canadians with disabilities to be ready to open their RDSP:
http://rdsp.com/tutorial/checklist-to-make-sure-you-are-ready-to-open-your-rdsp/
Checklist to make sure you are ready to open your RDSP
Complete the following checklist to see if you are ready to open your RDSP.
Do you live in Canada?
Do you have your Social Insurance Number? (Remember to bring it with you along with another piece of valid picture identification.)
Have you been approved for the DTC?
Have you chosen your financial institution?
Do you know who will be the holder of your RDSP?
You do not need to bring a copy of your DTC or income tax returns—the financial institution and government will take care of this. The financial institution will ask you to fill out a bank form as well as forms for the grant and bond. If you do not want to receive the grant or bond, do not fill out those forms.
Again— no mention (warning sticker) that this is not a good investment for your family member if he/she or the Holder has any ‘US indicia.’
I have also gotten the following information. Is this the understanding of all Canadian MP’s about the RDSP – that it is ‘hardly likely that anyone disabled, with those types of disability benefits and assets and income would even have $50,000 in savings (the amount our Canadian banks are to search for in account information to be handed over to the US IRS) and thus would not be affected by FATCA reporting? If that is the case, then the purpose of the RDSP is misrepresented in all I’ve read it to be.
…that in the context of FATCA and registered accounts like the RDSP, that it was hardly likely that anyone disabled, with those types of disability benefits and assets and income would have $50,000. in savings, and thus would not be affected by FATCA reporting.
I signed up as the Holder of my son’s Registered Disability Savings Plan at the inception of this CANADIAN REGISTERED PLAN and have been making the maximum monthly payments to receive the Canadian grant and bond — this is for my son’s benefit should the Alberta Assured Income for Severely Handicapped go belly up for any reason. Actually, making this $125 monthly contribution has precedence before all of my other monthly expenses. That is the value that I put on using the RDSP, a Canadian savings vehicle; it gives me some peace of mind that there will be adequate funds for my son to be looked after — after I am no longer here. The greatest fear of parents of a child with a disability: that their child will not be looked after OK when they are gone.
I hold the RDSP account for my son and the balance is a hair under $50,000 and growing — he will be the beneficiary at the earliest age 62. When I am gone and the sale of my house, my RRSP is what I will leave my two children, that ‘inheritance’ will deem my son no longer eligible to receive provincial AISH. I believe it is part of the responsibility I have for my son to see that his needs are met when I am gone, and a lot of that need comes under “financial.” He will have greater expenses and less income than will my able daughter.
From the statement above, does this MP’s office and do other MPs maintain, then, that anyone with a disability must live in relative poverty, that their Parent, their Guardian, their Trustee should not responsibly take advantage of this Canadian Registered Disability Savings Plan, especially if a supposed ‘US Person’?
Mr. Flaherty, this is in the RDSP history. You were the Finance Minister to preside over the creation of the RDSP and said:
The RDSP is part of our government’s commitment to help Canadians with disabilities save for the future.
A bit of history
The Registered Disability Savings Plan (RDSP) is a savings plan designed specifically for people with disabilities in Canada. The first of its kind in the world, this new tax-deferred savings vehicle will assist around 500,000 Canadians in planning for long-term financial security.
The federal government implemented the RDSP on December 1, 2008. This was the result of many years of advocacy by Planned Lifetime Advocacy Network (PLAN), families, and supporters. PLAN worked with the provinces to accommodate the RDSP by raising asset limits and eliminating claw backs.
The Honorable Jim Flaherty, Minister of Finance, championed the RDSP concept within government. Employees in Finance Canada, Human Resources and Skills Development Canada, and Justice Canada, worked long hours at breakneck speed to make the idea a reality.
But no one has attached the WARNING STICKER that registered Canadian accounts are not advisable for Canadians with a US indicia, are only for first-class Canadians, not those deemed second-class by virtue of their ‘US nationality.’
I “protested” outside the Stampede Grounds of Calgary on October 31 and November 1, talking to those who cared to listen to my plea that the Canadian Government come out from behind closed doors and tell us what our fate is to be according to the negotiations with the USA on an Intergovernmental Agreement to force FATCA on our Canadian banks and on US Persons in Canada, whether they be also Canadian citizens or US Persons who are legal residents of Canada – that foreign US law is allowed to be implemented in our sovereign nation. It was amazing to me how many of the delegates to the Conservative Party Convention did NOT know what FATCA was (and of course the many who did not bother to ask). Why is this? Why doesn’t every Canadian know what FATCA is, its US extra-territoriality into their country? The US tax evaders are unlikely resident in Canada – they are resident in the US where they send their untaxed monies offshore – everyone else is more US collateral damage. The US is one of the world’s largest tax havens in states like Delaware and Nevada. There will be no meaningful reciprocity for Canada or any other country that taxes on residency. The combination of US citizenship-based taxation and FATCA is bad, in fact immoral, law.
I have officially renounced my US citizenship and have my Certificate of Loss of Nationality at significant cost to my health from stress and to my retirement savings for US tax, accounting and immigration / nationality professional assistance. I have paid the US slightly about $1,500 in tax due over the eight years of US tax compliance – entirely because of gains in my Canadian Tax Free Savings Account and the Registered Disability Savings Plan I hold for my son with a developmental disability. He was born in Canada, raised in Canada, never registered with the US, never lived in the US, never had any benefit from the US. Many families with a family member like my son will not have the luxury of having retirement savings that they can dip into for the compliance industry of FATCA.
How much longer will you not be letting the Canadian victims of this absurdity know what their fate will be with USA FATCA and their Citizenship-Based Taxation – and to give appropriate warnings on Canadian registered investment plans? When will you either advise they have the same rights as any other Canadian no matter where they may come from or that US Persons are, indeed, second-class Canadians by virtue of their ‘US nationality’? Will our rights be waived under the Canadian Charter of Rights and Freedoms?
I would like my questions answered, not just another acknowledgement letter which is in itself appreciated.
Sincerely,
calgary411
Calgary, AB, Canada
UNQUOTE
Not only is the US FATCA law bad law — it is immoral law. I have now officially renounced my US citizenship (which I was WARNED I was relinquishing when I became a Canadian citizen in 1975). All I want for my son and other like him is a way that he can be released from his ENTRAPMENT into supposed US citizenship (never claimed — but that doesn’t matter). He would never owe tax to the US but none of his Canadian or Alberta disability benefits should go for the cost of compliance for filing US income tax and Foreign Bank Account Reports year after year after year, for $0.00 owed to the US. IT IS IMMORAL.
I hope you will have time to read these to further your knowledge of FATCA’s unintended consequences. This is entirely different from the story you worked on, “Jim Love, Canadian Mint chairman, helped run offshore ‘tax-avoidance scheme’ for clients”.
Regards and my thanks,
calgary411
Calgary, AB, Canada
@maz57
Je concur
Lol! I just turned on the TV (BNN) and what do I see on the bottom of the screen banner? A story about the CPPIB (Canada Pension Plan Investment Board) investing 200 million of our dollars in an Indian real estate joint venture. The CPPIB has some of the (fortunately for us) brightest investment minds in the country. We should all hope that we could get the same sort of investment returns in our personal portfolios that the CPPIB has consistently managed to get for all of us collectively. Wonder what our CBC guy Harvey Cashore would have to say about that “offshore” investment? Turns out the CPPIB has also invested in Australia, Spain, Sweden, and the UK.
I very much doubt that our guy Harvey gets it that the US government has labelled our mundane Canadian accounts as “offshore” and therefore evidence of tax evasion.
@All,
I wish there was a way we could get 50+ angry Canadians together to have a big (relatively speaking) anti-FATCA protest! The small protests have definitely been worthwhile, but we need to go BIGGER NOW.
I wonder if Mike could help us out with that?
@ maz57
Thanks, now I get it. Trouble is. I couldn’t listen to the CBC podcast because it doesn’t play on my computer. I think it’s just as well considering what I can glean about it from other comments here. I do notice that they didn’t allow anyone to comment about that hit piece.
@ calgary411
THAT was an outstanding e-mail you sent to Harvey Cashmore. Apparently he can can talk a lot but will he be able to listen too? I hope you get a response and IMHO it should include an apology to all FATCA victims.
Calgary411. Mark Twain said very few sinners are converted after the first 5 minutes.
.
…and my five minutes are up, I know.
The real Mark twain that is.
Dm over at Sandbox posted this directed at Blaze:
“I was at the financial planner’s today and my Canadian only husband opened a new account. The questions about place of birth and are you a US person were highlighted in yellow. I asked my husband not to provide the info and discussed with the planner the lack of IGA re: FATCA and potential Charter challenge. She said she would ask the compliance department whether the info had to be provided now or not. She mentioned W8 and withholding if the questions were not answered. I said that this could not possibly be required since the IGA was not signed and said I thought the FI would be on very shaky ground in insisting on this at this point. Thoughts?”
WhiteKat, at this point they are proceeding as though they have to comply directly to the IRS, so imo, yes, they are on shaky ground. Legally they can’t ask you or automatically deem you non-compliant b/c that would put them in violation of the Charter. That’s why the IGA is necessary for them in the first place.
My guess is though that they are trying to be ready for July and that they are hoping that most people know nothing about the IGA and the Charter issues.
Also are you on the account or is it your husband’s? He is Canadian and shouldn’t have to prove he is subject to the US. Just being married doesn’t make him a USP all by itself.
@YogaGirl – It was my comment this was an account opened solely by my husband, in response to concerns about FATCA and having to report joint accounts. The FI already had his citizenship listed but had specifically highlighted place of birth and the question about whether he was a USP. This is not to prove that one is Canadian – it is to prove that one is not a USP.
And, yes, it is to prepare for July but the financial planner was not sure if the compliance dept would accept declining to provide that info now, even in the absence of an IGA
I’d like to see them try to close my account because of my wife…. this might be interesting. For the need for more protestors, let me say that I am working 8 hrs a day for my job, 3 hours with my family, and 2 hours to help this cause. I’ve offered to drive from London to Ottawa for an interview if they ask, and have got the word out as best possible to the Native people’s of Canada. There is still a lot to be done, count on it and count on me…….. Mike.
You can see my reply to DM at Maple Sandbox. For some reason, investment accounts have been subject to this type of question since before FATCA.
I think it’s called “Qualified Intermediary” and I believe it only applies if one is purchasing U.S. investments.