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….
somehow from one of the links above i found this chaps website. i believe he is an american economist and he is dead set against FATCA
this link is a great read reguarding his take on the failing of americal
http://armstrongeconomics.com/2012/11/13/usa-has-peaked-as-did-britain-in-1914-the-sun-is-setting-rapidly-on-the-american-empire/
and in case anyone has missed it here is his article on the failings of FATCA
ooops missed the link
http://armstrongeconomics.com/2012/09/06/the-us-law-that-is-destroying-the-world-economy-fatca/
@Blaze Clarification: this was an investment account but it was opened by a Canadian, not a Canadian who also happens to be a USP. There were no choices made about where to invest $ so no US sources of income. The questions were explicitly linked to FATCA by the adviser.
So, all Canadians anywhere are being asked to provide country of birth and to specifically state whether they are considered a USP. It just so happened that this Canadian had an accidental USP by his side. He may choose to answer the questions if the “compliance dept” won’t let him proceed otherwise, as will most other Canadians who aren’t aware of what they are doing.
Just wondered if this might be an opportunity to test this – a Canadian with no US ties being forced to prove that in order to invest Canadian earned funds?
@mettleman
I wonder if he has updated his FATCA pronouncements from September of 2012 ? I guess I could go through the archives, but couldn’t be bothered this morning… too many other things to do…
That said, I did love this comparison…
Indeed!
Three FATCA-related on the blog:
http://armstrongeconomics.com/2012/09/06/the-us-law-that-is-destroying-the-world-economy-fatca/
http://armstrongeconomics.com/2013/09/29/bureaucrats-destroying-the-world/
http://armstrongeconomics.com/2013/02/11/usa-in-self-destructive-mode/
with this related link: http://www.japantimes.co.jp/news/2013/02/11/business/tax-rules-called-bane-of-u-s-expats/#.UpjpECeQPH1
@ mettleman
the analogy to Britain (and France) after the first world war is compelling
both countries were dominant in the world for roughly 100-125 years, and were nearly bankrupt
from the cost of maintaining empires, the expense of fighting WWI pushed both powers over the fiscal cliff. The transition from dominance took approximately 50 years, neither was 100% effective in navigating this transition
Britain tried to negotiate with its colonies, the “white dominions” from self-governance to the status of autonomous nations in their right and laid the foundations for the independence movement and the creation of the commonwealth after WW2.
France tried to retain dominance by bullying and military interventions and was literally at war with its colonies for the next 50 years. The French colonies did rally together only to fight the Nazis, both the rebellions started again immediately after the war.
The US has maybe 50 years leave a positive legacy as it declines from the position of dominance, sadly there does not appear to be any capable leadership to do so.
Hi all I was at the local credit union today and learned that all unions will have to be in compliance. The start of FATCA will be delayed until at least 2015. The credit union will not be giving names or asking which of their members are US or duals as the CRA will be sharing data with the IRS.
This search for duals and US permanent residents in Canada will take the form of some type of data base sharing of names and birth dates. The IRS will share names and birthdates with the CRA – If the date and name matches the CRA will forward your name to the IRS.
so it sounds to me if this info is accurate anyone born in the US who matches the name and birthdate in the CRA database will be given up. I suspect that as the FATCA steamroller moves along that the next search will be for the kids with a US born parent.
All accounts will be reported no matter how much is held in them. Some type of special deal is being worked with the mutual fund companies to report those who mutual funds with any kind of US assets. the discussion got too technical at this point and I didn’t understand exactly what this meant.
so it sounds to me that a way has been found around the privacy issues that the banks have.
WTF? Time to change my last name?
Just got off the phone with a man who contacted me over this issue. 77 years old. Born in the U.S. returned to Canada as a baby and never considered himself American. Found out about this, entered the Streamlined and spent over 20,000 dollars on lawyer fees and so called tax owed since he had sold a house and had other Canadian investments during his working life here.
He lives near me and the calls just keep on coming from that CBC radio interview. He’s going to drop by this site as he’s going renounce/relinquish now. 77 years old! He’s written to the U.S. ambassador, Harper and others and has only got back form letters. He also took up a petition for Mr. Hsu.
I cannot believe this is allowed to go on. Canadian seniors with ANY tiny connection to the U.S. are being taken to the cleaners. Canada’s government must put a stop to this. Now.
Does anyone know where to buy a really good safe? I’m serious. I’ll take the hit on my RRSPs and pay 1/2 in tax to the CG before I let USSA have any of it
i feel totaly sick to my stomach upon reading @ downtherabbithole’s take on the whole thing.
i don’t have much but i will be damned if the IRS is going to see any of it if i can help it.
good thing we have loads of little islands here to disappear into……..i can totaly relate to falling off the face of the earth and into a cash only world……sadly won’t probley happen….but would be nice if it could…..
@Atticus: Did he pay anything to IRS?!? Does he know CRA won’t collect for IRS for a Canadian citizen, so there is no way they could have collected anything on him.
This makes me furious. All the while Flaherty continues to “negotiate” while people like that man are going though hell and Canadian money is going to the US.
Shame!
downtherabbithole,
Thanks for your comment.
Who at your local credit union gave you this information — the head honcho; a front-line person that deals with customers? Does this person have this information straight from the Canadian government negotiating with the US? Are Canada’s negotiations with the US final?
i.e., is this speculation or what is the basis for the information? Good for you for asking for your local credit union’s information re FATCA!
Re:downtherabbithole’s comment,
Even if there was some sort of data match between US records of names/birthdates and CRA records of names/birthdates, then what? CRA does not know where a person’s non-registered bank accounts are held, and it is these non-registered bank accounts that are to be reported. From what we have heard so far (I’m thinking specifically of the CRA person who let the cat out of the bag to Marie), all registered accounts are exempted from FATCA reporting.
In addition, wouldn’t such a data match only work for certain with male ‘US persons’ who have the same last name for life. Whereas women have the option to change the last name they were born with when they marry. Perhaps we will see a sudden rush of name changes for those ‘US person’ females who kept their maiden names; that is if their non-US person husbands don’t divorce them first.
I have a feeling that what downtherabbithole was listening to was likely uninformed speculation. Time will tell.
Again, re: downtherabbithole (thank you for the sleepless night…lol), if the IRS sends names/birthdates then someone who is not in the system (i.e. no SSN ) will be missed, unless they are using actual birth records, not IRS records for the data search.
OK, I have had enough FATCA thoughts for one night….off to bed.
I think at this point, seeing all the comments from what others are being told by financial institutions in Canada. The Deal is done. The IGA has been signed. Flaherty won’t even answer questions or even talk to anyone period. Harper has him muted to anyone until the big announcement that Fatca is here. The charter means nothing along with Canadian Civil liberties. I am not trying to be negative, just realistic. Look at how we are being treated by our officials. Even the media is trying to keep this a secret. Once the announcement is made, people will be furious and most will forget about it in a month or so. I so wish I could trumpet this to everyone, but I’m reaching 50 people per day with the only media source available to me. Canada will fail me and what I trusted and believed in is gone. You can demand answers from Flaherty or Harper, lots of luck. They are liars and are selling us out. The deal is done, just go to a bank and ask………
@ Mike
Below is a response from Minister Flaherty to my most recent e-mail to him. I’m still trying to figure out how to interpret it. Did he sell us out, if so how badly? We just keep guessing until the FATCA hammer falls.
“… the Government of Canada will continue to express its strong concerns relating to FATCA and the U.S. government and advocate on behalf of Canadians on these issues.
Talks are underway between Canadian and U.S. officials to develop an approach that both countries will find agreeable, with a view towards concluding an agreement in the near future.
The agreement under negotiation would recognize the principle our Government has consistently advanced, that in seeking to meet the objectives of FATCA, greater reliance can be placed on the procedures that already exist under our bilateral Income Tax Convention for the exchange of tax information. We are pleased that the U.S. has accepted this principle.”
@Em
Maybe we should ask Allison Christians to interpret that letter from Flaherty…
@Mike,
You may well be right, and this would not surprise most people here at Brock, I don’t think.
However, that does not mean that the fight is over, not by a long shot.
The Charter might not mean anything to some people, but it means everything to ‘US persons’. Class action lawsuits are the next step, along with larger, more vocal protests. You in?
@ bubblebustin
Good idea. Politicians use “unspeak” or “doublespeak” which takes a better mind than mine to translate into plain English. Any idea how to reach Allison? I’d like to hear her take on this. My guess is that it’s the same old, same old, but I sure would like some specifics about what “principle” the U.S. has accepted or at least a wild guess as to what that means. FATCA goes far beyond and overrides the existing tax treaty. The two do not seem compatible to me so you can’t use the existing tax treaty to meet FATCA’s objectives, IMHO. The existing tax treaty exchanges the information necessary to calculate tax owing while FATCA is a forced reveal of an individual’s assets. Assets do not determine tax liability; earnings from assets do. That’s why I keep saying FATCA is not about taxes; FATCA is about control.
@Em,
Yes, Em! And this is a really good point for our protestors to EMphasize. FATCA = Foreign Attack to Control All.
@Em
Yes, Allison would be able to say what’s currently possible. I have a way of contacting her and will forward your letter for deciphering, if she can.
I can’t make any claim to know what Minister Flaherty meant in his email to you but I can tell you that the current US-Canada treaty has both automatic information exchange (article XXVII) and assistance in collection (Article XXVIA).
As to information exchange the treaty provides among other items that:
“…the Contracting States shall exchange such information as is relevant for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes to which the Convention applies insofar as the taxation thereunder is not contrary to the Convention. …”
I do not have any insight into what the CRA collects and from whom, in respect of this provision. What this provision leads to in practice is accordingly anyone’s guess, and therefore what will change under an IGA is as well. Both countries have been petitioned under access to information laws to divulge information about their information exchange practices but very little has in fact been divulged.
Following on the automatic information exchange, in the assistance in collection provision you will find as to individuals the following text:
“No assistance shall be provided under this Article for a revenue claim in respect of a taxpayer to the extent that the taxpayer can demonstrate that
(a) where the taxpayer is an individual, the revenue claim relates to a taxable period in which the taxpayer was a citizen of the requested State…”
If you swap out the names of the state you would interpret this to say that no assistance in collection of taxes shall be provided to Canada where the claim relates to a tax year in which an individual taxpayer was a citizen & resident of the United States, and conversely no assistance in collection of taxes shall be provided to the United States where the claim relates to a tax year in which an individual taxpayer was a citizen & resident of Canada.
Putting that together with the EOI provision one might infer then that each country is collecting and exchanging tax-relevant information, but if this information leads to a revenue claim by one of the governments, the other will only assist in collection (whatever form that may take) if the individual is not a citizen of the country in which she is resident.
Of course nothing in the treaty negates the unilateral imposition of taxation on the basis of citizenship by the United States and I would expect the same to be true going forward. It really is unfortunate that the international community of states has not seen fit to remonstrate against this injustice but instead is moving to help enforce it, in large part it seems with nary a comment or concern.
Sorry not to be more helpful. One can but speculate until the agreement is released, which will not occur until after it becomes a fait accompli.
@ bubblebustin
Thank you. I’m thinking the first quarter of 2014 could be even more stressful than the waiting and waiting has been for the past 2 years. I feel 10 years older than I was when the OMG moment hit.
@ Allison Christians
Thanks so much for the quick response. I thought all the CRA gets from our banks is a copy of our T4, T5 slips, etc. and that would be all it could exchange with the IRS. I suppose the CRA is also authorized to dig further into our actual account records if they have just cause but that would be in exceptional cases, certainly not the general rule. The U.S.A. deserved to be soundly denounced ages ago by all nations for its punitive and irrational citizenship-based taxation. Instead it double downed on its hubris and created FATCA. I hope that even after that “fait accompli” we will have some avenue of recourse. You’ve been a great help to all of us, especially those, like me, who get totally lost in the complexities.