397 thoughts on “The Canada United States FATCA Intergovernmental Agreement”
The US banks being forced to comply with information sharing under FATCA may be faced with failure, since they have to report on 20-odd different country’s citizens’ bank accounts (and with MORE to come!), whereas other countries only have to report on ONE country’s citizens’ bank accounts (USA). That might well be the best reason that FATCA WILL be repealed in the US, since it could well cause another banking crisis (I sure hope so!!) Add to that, the giant numbers of renunciations rendering expats an endangered species and there will eventually be “reciprocity” only in one direction (the USA to everyone else!). Even though everyone else in the world practices RBT we should all DEMAND reciprocal information “just cuz we can” 🙂
“This agreement will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada.” – – Kerry-Lynne D. Findlay, Minister of National Revenue
So this agreement acts to shield us from citizenship based taxation? Are we supposed to turn the clocks back to our pre-OMG moments with this statement? Just what kind of kool-aid are they drinking in Ottawa?
GwEvil….Brilliant comment! The part about US banks having to report to 20 different countries.
I’ve just decided that I’m going to go back to a sane, logical investment plan within my RRSPs and TFSAs and screw the yanks. By the time they catch on to me, they’ll have realized the self destruction that’s happening and won’t bother chasing me, nor anyone else. Actually, the more I read, the less I’m angered at this IGA. Our CDN gov’t did what it could, without the pipe dream of actually getting the USA to change it’s own idiotic laws (they’ll find this out for themselves).
What’s the worst that can happen to me? I never cross their border again? Boo Hoo! Is that supposed to be my loss?
@kermitzii
your timeline parallels ours. Registered our three kids at Vancouver in ’88, so they all have SSN’s as well. We spoke to all of them about FATCA, and the reactions were dismay. The youngest, techie generation, said, ‘don’t you think the IRS knows where dad is already? The older ones are angry and overwhelmed at present with Cnd tax filing coming up, so not a good time to talk to them about it. So, we’ll see at our end what the least costly option is for them to cut free from USC, and still researching what option for my spouse.
@PierreD
I’d like to know what compelled the US to agree to these carve outs (TFSA’s etc) under the IGA.
From: caroltapanila
Sent: Friday, February 07, 2014 10:39 PM
To: Roy Berg
Subject: Who’s delusional…
The Canadian Government or me?
“This agreement will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada.” – – Kerry-Lynne D. Findlay, Minister of National Revenue
If this were true – is it true? – why would we have to even file US tax returns and FBARs?
As I read it, the CANADIAN “foreign financial institutions” do not report specific Canadian registered accounts, including the RDSP as they are now exempted.
I presume that doesn’t mean that income tax returns and FBARs, 8938’s, 3520 and 3520A do not include these accounts. My assumption is (and who am I to interpret?) there would be a form like the 8891 to file each year for these Canadian registered accounts????
MPs seem to think there is no problem for us – really???
Do you know; does the Canadian government know; we need to know.
Thanks and regards,
Carol Tapanila
The minister of Revenue appears to be dissembling. She can’t be that dumb. (or can she?) I thought she must have said “….will not impose any new taxes….” but no- I checked the government news release website and she did indeed say “will not impose any taxes….”.
This is an open invitation to Canadians, by the minister of national revenue, to ignore the IRS.
@Calgary411
Thank you for writing to Mr Berg.
I talked to my lawyer today, and he confirmed that tax filing obligations and reporting do not change with the IGA.
The fact that the IGA specifies that these accounts are non-reportable may actually serve to encourage people to not report them to the IRS, especially when the Canadian government is telling people that the IGA doesn’t impose tax and penalties on USP’s in Canada. Why did the the US agree to this? Why is the government of Canada encouraging people to be US tax evaders? This gets more bizarre by the moment.
Eagerly waiting Mr Berg’s response.
@Duke of Devon
I had to go back and check the wording too. This is absolutely reckless on the part of the Minister of Revenue, but is consistent with a couple of responses that a couple of Brockers have had from their MP’s – that the IGA gets us off the hook to the IRS.
Huh? Of course the FATCA/IGA does not impose taxes. The IRS and the US Tax Act imposes taxes. FATCA neither adds nor removes from the taxes imposed by the US on USCs abroad. Our feds just put those words there so people wouldn’t think that US taxes are now due just because they signed an IGA. The imposition of taxes was already there.
It sure doesn’t make sense that RESPs, TFSAs etc are exempt from FATCA reporting without at the same time removing the punitive handling of these Canadian accounts (3520 forms etc). If I were to waste my time with wishful thinking, I’d wish for that. Mutual funds as PFICs can go too.
At last a bit of support in the Canadian media for our position – from the Windsor Star: http://blogs.windsorstar.com/2014/02/07/the-stars-view-ottawa-shouldnt-be-in-bed-with-the-irs/
‘The Star’s view: Ottawa shouldn’t be in bed with the IRS’
……it seems Canada intends to become the middle man — essentially doing an end run around privacy laws that prevent banks from sending customer information to a foreign government….”……
….Perrin Beatty, a former federal revenue minister who is now president and CEO of the Canadian Chamber of Commerce, has warned that the agreement is “intrusive in terms of people’s property.”…”….
….”The new agreement will obviously have far-reaching implications for many Windsor-Essex residents. Cross-border marriages and dual citizenship are common here.
There’s really no reason why the government has compromised privacy rights when there’s no evidence we’re a magnet for tax cheats. As the Canadian Bankers Association has pointed out “Canada is not a tax haven and Americans do not move here to evade taxation.”
Allison Christians, the Stikeman chair in tax law at McGill University, perhaps summed up the tax deal best: “Canada gets virtually nothing out of this deal. The U.S. is attempting to do what it has tried to do for over a hundred years, which is impose a tax base that cannot be imposed without the help of other countries.”
We completely agree with that assessment….”…..
@GwEvil
I have thought for a long time that IGA reciprocity, or DATCA (D for domestic) as I call it, would be the Achilles heel of FATCA implementation. Congress would NEVER agree to that….BUT…. I am beginning to see that the strategy of the fATCAnatics is to create as many agreements as they can, and evolve this into a Global GATCA via the OECD as fast as they can, and then go back to Congress and say, well, we have no choice but make our banks do this, as these ” phony treaties” we have signed are binding on you and besides, look the rest of the world is doing GATCA! So, you too must comply! It could be a brilliant strategy or a disaster. I am of two minds as how it will play out…
I’m pretty sure that the treasury dept never imagined that US banks would *actually* have to reciprocate, so I believe that this will be an unforseen and unmitigated disaster for the US. The Treasury’s and the IRS’ s hubris will be the downfall of the US economy. GATCA won’t really matter because no other country practices CBT. It’s FATCA that is the problem because the outlier US practices CBT.
We really need to know! Is this (to me) bizarre statement taken out of context? Is it, then, US tax returns and all their necessary and complex additional forms (based on different criteria) duly attached must be filed each year, as well as FBARS (which must be filed electronically)
= actual taxes owed, plus data collection of private Canadian financial information for, to me, a foreign country, but:
“…will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada.”?
People will be making life-changing decisions (or not) based on the information. This is not a game.It damn well better be easy to understand and we must be getting CORRECT information. Every Canadian MP — and the Prime Minister — needs to understand this subject thoroughly and the media must report it well. There are lots and lots of people affected.
Damn right, Calgary411!
Every one of those FATCA exempt accounts (except RRSP’s) creates more potential tax revenue for the US! The Canadian government is encouraging USP’s to invest in toxic assets – all to the benefit of Canadian banks, of course.
bubblebustin,
I’ve had no reply from Roy Berg yet (email received out-of-office notification).
From my correspondence with NDP MP Mike Sullivan (and my cc on emails to “My Canadian Government Representatives), I have now also received a response from NDP MP Murray Rankin, Opposition Critic for National Revenue, and am setting up a phone call with him. I will also talk with Patrick Cain of Global News on Monday — he is also talking with others regarding renunciation / relinquishment of US citizenship. Y’all know the story I’ll tell him about those who cannot do either.
I am so concerned at the lack of knowledge on how this will affect ‘US Persons in Canada’ as we have reports of concerned persons reassured by various of their MPs that they essentially should have nothing to worry about! This is so dangerous as vulnerable people will make life-changing decisions or disregard based based on information that is not correct.
It seems to me that the statements we’ve seen in the media and the ones unknowledgeable MPs are going on pertain to only how the IGA Canada has signed with the US will affect Canada’s foreign financial institutions, not how it will affect the actual victims of this, US Persons in Canada, however they are defined.
I’m cynical enough to believe that the Canadian government got the carve-outs for RDSP’s, etc so that Canadians like us will feel comfortable enough to keep buying them – even though the US taxes us on them. I also think that the US only agreed to it because it mean more tax revenue to them when the banks finally turn us in. Look at the FAQ that relates to this:
“16. I am a U.S. citizen living in Canada and was not aware that the U.S. wants me to file tax returns. Will the Agreement mean that I now have to pay U.S. tax?
The Agreement is strictly an information-sharing agreement and does not involve any new or higher taxes.
Unlike Canada, the U.S. taxes its citizens who reside in other countries on their worldwide income. The U.S. citizenship-based tax regime has been in place for many years and is not altered by the Agreement. For more information, please refer to the U.S. IRS Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers.”
They could have been a little less vague, don’t you think, like maybe responding directly to the question as such:
For those previously unaware of their US tax filing obligations, YES.
Yes, bubblebustin, pretty unscrupulous, vague on purpose.
Consider:
Lying by omission, otherwise known as exclusionary detailing, is lying by either omitting certain facts or by failing to correct a misconception. In the case of the former, an example of this would be a car salesmen claiming a car to have amazing fuel economy while neglecting to mention that it has no engine and is completely immobile. In the case of the latter, it could be a situation in which a misconception exists that the claimant is aware of but fails to correct, such as a person who wanders around a hospital dressed as a doctor, offering treatment while failing to mention that she is in fact just getting a kick out of pretending to be a doctor.
So, another example of lying by omission would be:
The Agreement is strictly an information-sharing agreement and does not involve any new or higher taxes.
Unlike Canada, the U.S. taxes its citizens who reside in other countries on their worldwide income. The U.S. citizenship-based tax regime has been in place for many years and is not altered by the Agreement. For more information, please refer to the U.S. IRS Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers.”
OK, so what is about FATCA that that outrages people?
Is it that you don’t want your account numbers and dollar amount balances going to the IRS? OR, is it really that you don’t want the IRS to even know you _exist_, period?
How many people here believe that if your account balance with each FFI is less than $50,000, the FFI won’t report you to the CRA and in turn to the IRS?
Look at this link by Grant Thornton that calgary411 posted:
One of the most important pieces of the IGA is the phased-in reporting of the required information on each US account holder.
— In 2014, Canadian FIs will need to report the name, address, and US Taxpayer Identifying Number (TIN) of each US person that is an account holder.
— In 2015 and 2016, Canadian FIs will need to report the name, address, US TIN, the account balance, gross amount of interest and dividends credited to an account of each US person that is an account holder. Gross proceeds from the sale or redemption of property credited to an account will be required starting in 2016 reporting.
It seems to be saying that effective immediately (2014), the FFI must report all US account holders: name, address and TIN. Account balances are not due until starting next year.
What does that mean? It seems that the account holders are to be reported regardless of the account balances. What if you only have an RRSP with the FFI? Sure, the RRSP _account_ is non-reportable, but does the above say the account holder is reportable regardless of what it is they hold?
Looking at these two points:
4 New client on-boarding procedures must be in put in place for all new accounts opened on or after July 1, 2014. Canadian FIs will need to change their new account procedures to determine the US status of new clients. Canadian FIs can adopt the self-certification/documentary evidence approach in verifying whether the account holder is US citizen or US resident for tax purposes.
Later steps:
As the FATCA implementation is phased in over the next few years, Canadian FIs will need to consider how to report the information on their US account holders, required by the CRA. This reporting will commence in 2015. Canadian FIs will also need to begin a due diligence process on their pre-existing accounts (accounts maintained by the FI as of June 30, 2014) to determine which of their current clients are US persons.
There is a conflict above. In the first quote it says to report on US clients in 2014. The second quote says the starting in 2015 the FFI “will also need to begin a due diligence process on their pre-existing accounts (accounts maintained by the FI as of June 30, 2014) to determine which of their current clients are US persons.”. So, which is it?
At that moment, I believe the following statements are true. Does everyone agree?
1) If you close an account by June 30, 2014, the CRA and IRS will never be notified about the account.
2) If you open a new account by June 30, 2014, the information requested of you will not include the new requirements of determining if you are a US person.
3) How hard the FFI tries to determine your US personage after June 30, 2014 for new and existing accounts, remains to be seen.
I think FATCA is nothing more than a tool to dig up willful FBAR and tax filing avoiders so they can be hit with maximum penalties.
As Roy Berg and others have been saying for a couple of years now, as time goes on it will be harder and harder to argue reasonable cause that you didn’t know you had a US filing requirement.
FACTA does not report anything to the CRA and IRS that a US person is not already required to report through FBARs and tax returns (in fact it’s less: TFSAs, RESPs etc are not reported). Why the outrage about the Canadian FATCA agreement? Were people expecting that the Canadian FATCA negotiations (or refusal) was going to protect them against US citizenship-based taxation? That was never going to happen.
What pisses me off about FATCA is that my bank will be a spy for the IRS. As far as the US law requiring me to file, my attitude hasn’t changed. Forget it!
The fact that the CRA is willing to facilitate the transfer of information that they themselves don’t require from Canadian taxpayers is disgusting.
Worse case scenario.
1. move non-excludable assets to spouse OR.
2. open up numerous investments funds with differing banks. make sure you do not over over $50,000 in any.
3, Re: #2. Use multiple credit unions. They will not go of their way to screw you.
4. Do not visit USA ever again.
WhatAmI,
I think FATCA is nothing more than a tool to dig up willful FBAR and tax filing avoiders so they can be hit with maximum penalties.
…and Finance Minister Flaherty and the existing US / Canada Tax Treaty say Canada will not collect penalties for FBAR and will not collect tax and tax-related penalties on Canadian CITIZENS from the time they became a Canadian citizen. Next step for some: If you don’t yet have Canadian citizenship, you either get that and claim it as relinquishment or you, as a dual from birth, must instead renounce — with no Exit Tax unless you fail to complete Form 8854 in an on-time manner.
As most of us know, none of this will be fair for US Persons Abroad unless/until the US, with good old-fashioned common sense, changes to Residence-Based Taxation as all other countries. And, right, how many can now claim ‘reasonable cause’ for not knowing all this?
The US has stepped up its continuing education program for their wayward chattel (see: http://www.viewzone.com/collateralx.html “Legally, you are considered to be a slave or indentured servant to the various Federal, State and local governments via your STATE-issued and STATE-created Birth Certificate in the name of your all-caps person. Birth Certificates are issued so that the issuer can claim exclusive title to the legal person created thereby. Sleep well, fellow slaves.”
Now we have choices: go forward as a US/(other country) citizen, knowing and complying with all the US CBT absurd tax law (as we have been admonished: the law is the law is the law, especially if you want to keep the US Person tatoo on your butt); move back within the walls of the homeland forever more; get affairs in order at whatever outrageous cost and get out of Dodge.
In the meantime, I struggle with which of those choices apply to my son and others like him. Answer: none of the above apply for persons ENTRAPPED. Too bad my son’s country, Canada, cannot say he has Paramount Allegiance to the country he was born and lived in all his life, Canada. But the, hey, life ain’t fair and I and others will have to live with this distraction for the rest of our days.
There is another option: renounce and don’t file a gattam thing! Then never cross the border again.
Absolutely, for those who, especially, have no family in the US.
The US banks being forced to comply with information sharing under FATCA may be faced with failure, since they have to report on 20-odd different country’s citizens’ bank accounts (and with MORE to come!), whereas other countries only have to report on ONE country’s citizens’ bank accounts (USA). That might well be the best reason that FATCA WILL be repealed in the US, since it could well cause another banking crisis (I sure hope so!!) Add to that, the giant numbers of renunciations rendering expats an endangered species and there will eventually be “reciprocity” only in one direction (the USA to everyone else!). Even though everyone else in the world practices RBT we should all DEMAND reciprocal information “just cuz we can” 🙂
“This agreement will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada.” – – Kerry-Lynne D. Findlay, Minister of National Revenue
So this agreement acts to shield us from citizenship based taxation? Are we supposed to turn the clocks back to our pre-OMG moments with this statement? Just what kind of kool-aid are they drinking in Ottawa?
GwEvil….Brilliant comment! The part about US banks having to report to 20 different countries.
I’ve just decided that I’m going to go back to a sane, logical investment plan within my RRSPs and TFSAs and screw the yanks. By the time they catch on to me, they’ll have realized the self destruction that’s happening and won’t bother chasing me, nor anyone else. Actually, the more I read, the less I’m angered at this IGA. Our CDN gov’t did what it could, without the pipe dream of actually getting the USA to change it’s own idiotic laws (they’ll find this out for themselves).
What’s the worst that can happen to me? I never cross their border again? Boo Hoo! Is that supposed to be my loss?
@kermitzii
your timeline parallels ours. Registered our three kids at Vancouver in ’88, so they all have SSN’s as well. We spoke to all of them about FATCA, and the reactions were dismay. The youngest, techie generation, said, ‘don’t you think the IRS knows where dad is already? The older ones are angry and overwhelmed at present with Cnd tax filing coming up, so not a good time to talk to them about it. So, we’ll see at our end what the least costly option is for them to cut free from USC, and still researching what option for my spouse.
@PierreD
I’d like to know what compelled the US to agree to these carve outs (TFSA’s etc) under the IGA.
From: caroltapanila
Sent: Friday, February 07, 2014 10:39 PM
To: Roy Berg
Subject: Who’s delusional…
The Canadian Government or me?
“This agreement will not impose any U.S. taxes or penalties on U.S. citizens or U.S. residents holding accounts in Canada.” – – Kerry-Lynne D. Findlay, Minister of National Revenue
If this were true – is it true? – why would we have to even file US tax returns and FBARs?
As I read it, the CANADIAN “foreign financial institutions” do not report specific Canadian registered accounts, including the RDSP as they are now exempted.
I presume that doesn’t mean that income tax returns and FBARs, 8938’s, 3520 and 3520A do not include these accounts. My assumption is (and who am I to interpret?) there would be a form like the 8891 to file each year for these Canadian registered accounts????
MPs seem to think there is no problem for us – really???
Do you know; does the Canadian government know; we need to know.
Thanks and regards,
Carol Tapanila
The minister of Revenue appears to be dissembling. She can’t be that dumb. (or can she?) I thought she must have said “….will not impose any new taxes….” but no- I checked the government news release website and she did indeed say “will not impose any taxes….”.
This is an open invitation to Canadians, by the minister of national revenue, to ignore the IRS.
@Calgary411
Thank you for writing to Mr Berg.
I talked to my lawyer today, and he confirmed that tax filing obligations and reporting do not change with the IGA.
The fact that the IGA specifies that these accounts are non-reportable may actually serve to encourage people to not report them to the IRS, especially when the Canadian government is telling people that the IGA doesn’t impose tax and penalties on USP’s in Canada. Why did the the US agree to this? Why is the government of Canada encouraging people to be US tax evaders? This gets more bizarre by the moment.
Eagerly waiting Mr Berg’s response.
@Duke of Devon
I had to go back and check the wording too. This is absolutely reckless on the part of the Minister of Revenue, but is consistent with a couple of responses that a couple of Brockers have had from their MP’s – that the IGA gets us off the hook to the IRS.
Huh? Of course the FATCA/IGA does not impose taxes. The IRS and the US Tax Act imposes taxes. FATCA neither adds nor removes from the taxes imposed by the US on USCs abroad. Our feds just put those words there so people wouldn’t think that US taxes are now due just because they signed an IGA. The imposition of taxes was already there.
It sure doesn’t make sense that RESPs, TFSAs etc are exempt from FATCA reporting without at the same time removing the punitive handling of these Canadian accounts (3520 forms etc). If I were to waste my time with wishful thinking, I’d wish for that. Mutual funds as PFICs can go too.
At last a bit of support in the Canadian media for our position – from the Windsor Star:
http://blogs.windsorstar.com/2014/02/07/the-stars-view-ottawa-shouldnt-be-in-bed-with-the-irs/
‘The Star’s view: Ottawa shouldn’t be in bed with the IRS’
……it seems Canada intends to become the middle man — essentially doing an end run around privacy laws that prevent banks from sending customer information to a foreign government….”……
….Perrin Beatty, a former federal revenue minister who is now president and CEO of the Canadian Chamber of Commerce, has warned that the agreement is “intrusive in terms of people’s property.”…”….
….”The new agreement will obviously have far-reaching implications for many Windsor-Essex residents. Cross-border marriages and dual citizenship are common here.
There’s really no reason why the government has compromised privacy rights when there’s no evidence we’re a magnet for tax cheats. As the Canadian Bankers Association has pointed out “Canada is not a tax haven and Americans do not move here to evade taxation.”
Allison Christians, the Stikeman chair in tax law at McGill University, perhaps summed up the tax deal best: “Canada gets virtually nothing out of this deal. The U.S. is attempting to do what it has tried to do for over a hundred years, which is impose a tax base that cannot be imposed without the help of other countries.”
We completely agree with that assessment….”…..
@GwEvil
I have thought for a long time that IGA reciprocity, or DATCA (D for domestic) as I call it, would be the Achilles heel of FATCA implementation. Congress would NEVER agree to that….BUT…. I am beginning to see that the strategy of the fATCAnatics is to create as many agreements as they can, and evolve this into a Global GATCA via the OECD as fast as they can, and then go back to Congress and say, well, we have no choice but make our banks do this, as these ” phony treaties” we have signed are binding on you and besides, look the rest of the world is doing GATCA! So, you too must comply! It could be a brilliant strategy or a disaster. I am of two minds as how it will play out…
BTW, the DATCA saga is documented here…
http://isaacbrocksociety.ca/2013/06/27/hr-2299-calls-for-withdrawal-of-fatca-iga-reciprocity-tool-datca-lite/
I’m pretty sure that the treasury dept never imagined that US banks would *actually* have to reciprocate, so I believe that this will be an unforseen and unmitigated disaster for the US. The Treasury’s and the IRS’ s hubris will be the downfall of the US economy. GATCA won’t really matter because no other country practices CBT. It’s FATCA that is the problem because the outlier US practices CBT.
We really need to know! Is this (to me) bizarre statement taken out of context? Is it, then, US tax returns and all their necessary and complex additional forms (based on different criteria) duly attached must be filed each year, as well as FBARS (which must be filed electronically)
= actual taxes owed, plus data collection of private Canadian financial information for, to me, a foreign country, but:
People will be making life-changing decisions (or not) based on the information. This is not a game. It damn well better be easy to understand and we must be getting CORRECT information. Every Canadian MP — and the Prime Minister — needs to understand this subject thoroughly and the media must report it well. There are lots and lots of people affected.
Damn right, Calgary411!
Every one of those FATCA exempt accounts (except RRSP’s) creates more potential tax revenue for the US! The Canadian government is encouraging USP’s to invest in toxic assets – all to the benefit of Canadian banks, of course.
bubblebustin,
I’ve had no reply from Roy Berg yet (email received out-of-office notification).
From my correspondence with NDP MP Mike Sullivan (and my cc on emails to “My Canadian Government Representatives), I have now also received a response from NDP MP Murray Rankin, Opposition Critic for National Revenue, and am setting up a phone call with him. I will also talk with Patrick Cain of Global News on Monday — he is also talking with others regarding renunciation / relinquishment of US citizenship. Y’all know the story I’ll tell him about those who cannot do either.
I am so concerned at the lack of knowledge on how this will affect ‘US Persons in Canada’ as we have reports of concerned persons reassured by various of their MPs that they essentially should have nothing to worry about! This is so dangerous as vulnerable people will make life-changing decisions or disregard based based on information that is not correct.
It seems to me that the statements we’ve seen in the media and the ones unknowledgeable MPs are going on pertain to only how the IGA Canada has signed with the US will affect Canada’s foreign financial institutions, not how it will affect the actual victims of this, US Persons in Canada, however they are defined.
Here is a link regarding that: https://research.tdwaterhouse.ca/research/public/Markets/NewsArticle/100-037b4156-1.
What do you think?
@Calgary
I’m cynical enough to believe that the Canadian government got the carve-outs for RDSP’s, etc so that Canadians like us will feel comfortable enough to keep buying them – even though the US taxes us on them. I also think that the US only agreed to it because it mean more tax revenue to them when the banks finally turn us in. Look at the FAQ that relates to this:
“16. I am a U.S. citizen living in Canada and was not aware that the U.S. wants me to file tax returns. Will the Agreement mean that I now have to pay U.S. tax?
The Agreement is strictly an information-sharing agreement and does not involve any new or higher taxes.
Unlike Canada, the U.S. taxes its citizens who reside in other countries on their worldwide income. The U.S. citizenship-based tax regime has been in place for many years and is not altered by the Agreement. For more information, please refer to the U.S. IRS Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers.”
They could have been a little less vague, don’t you think, like maybe responding directly to the question as such:
For those previously unaware of their US tax filing obligations, YES.
Yes, bubblebustin, pretty unscrupulous, vague on purpose.
Consider:
So, another example of lying by omission would be:
OK, so what is about FATCA that that outrages people?
Is it that you don’t want your account numbers and dollar amount balances going to the IRS? OR, is it really that you don’t want the IRS to even know you _exist_, period?
How many people here believe that if your account balance with each FFI is less than $50,000, the FFI won’t report you to the CRA and in turn to the IRS?
Look at this link by Grant Thornton that calgary411 posted:
https://research.tdwaterhouse.ca/research/public/Markets/NewsArticle/100-037b4156-1
It seems to be saying that effective immediately (2014), the FFI must report all US account holders: name, address and TIN. Account balances are not due until starting next year.
What does that mean? It seems that the account holders are to be reported regardless of the account balances. What if you only have an RRSP with the FFI? Sure, the RRSP _account_ is non-reportable, but does the above say the account holder is reportable regardless of what it is they hold?
Looking at these two points:
There is a conflict above. In the first quote it says to report on US clients in 2014. The second quote says the starting in 2015 the FFI “will also need to begin a due diligence process on their pre-existing accounts (accounts maintained by the FI as of June 30, 2014) to determine which of their current clients are US persons.”. So, which is it?
At that moment, I believe the following statements are true. Does everyone agree?
1) If you close an account by June 30, 2014, the CRA and IRS will never be notified about the account.
2) If you open a new account by June 30, 2014, the information requested of you will not include the new requirements of determining if you are a US person.
3) How hard the FFI tries to determine your US personage after June 30, 2014 for new and existing accounts, remains to be seen.
I think FATCA is nothing more than a tool to dig up willful FBAR and tax filing avoiders so they can be hit with maximum penalties.
As Roy Berg and others have been saying for a couple of years now, as time goes on it will be harder and harder to argue reasonable cause that you didn’t know you had a US filing requirement.
FACTA does not report anything to the CRA and IRS that a US person is not already required to report through FBARs and tax returns (in fact it’s less: TFSAs, RESPs etc are not reported). Why the outrage about the Canadian FATCA agreement? Were people expecting that the Canadian FATCA negotiations (or refusal) was going to protect them against US citizenship-based taxation? That was never going to happen.
What pisses me off about FATCA is that my bank will be a spy for the IRS. As far as the US law requiring me to file, my attitude hasn’t changed. Forget it!
The fact that the CRA is willing to facilitate the transfer of information that they themselves don’t require from Canadian taxpayers is disgusting.
Worse case scenario.
1. move non-excludable assets to spouse OR.
2. open up numerous investments funds with differing banks. make sure you do not over over $50,000 in any.
3, Re: #2. Use multiple credit unions. They will not go of their way to screw you.
4. Do not visit USA ever again.
WhatAmI,
…and Finance Minister Flaherty and the existing US / Canada Tax Treaty say Canada will not collect penalties for FBAR and will not collect tax and tax-related penalties on Canadian CITIZENS from the time they became a Canadian citizen. Next step for some: If you don’t yet have Canadian citizenship, you either get that and claim it as relinquishment or you, as a dual from birth, must instead renounce — with no Exit Tax unless you fail to complete Form 8854 in an on-time manner.
As most of us know, none of this will be fair for US Persons Abroad unless/until the US, with good old-fashioned common sense, changes to Residence-Based Taxation as all other countries. And, right, how many can now claim ‘reasonable cause’ for not knowing all this?
The US has stepped up its continuing education program for their wayward chattel (see: http://www.viewzone.com/collateralx.html “Legally, you are considered to be a slave or indentured servant to the various Federal, State and local governments via your STATE-issued and STATE-created Birth Certificate in the name of your all-caps person. Birth Certificates are issued so that the issuer can claim exclusive title to the legal person created thereby. Sleep well, fellow slaves.”
Now we have choices: go forward as a US/(other country) citizen, knowing and complying with all the US CBT absurd tax law (as we have been admonished: the law is the law is the law, especially if you want to keep the US Person tatoo on your butt); move back within the walls of the homeland forever more; get affairs in order at whatever outrageous cost and get out of Dodge.
In the meantime, I struggle with which of those choices apply to my son and others like him. Answer: none of the above apply for persons ENTRAPPED. Too bad my son’s country, Canada, cannot say he has Paramount Allegiance to the country he was born and lived in all his life, Canada. But the, hey, life ain’t fair and I and others will have to live with this distraction for the rest of our days.
There is another option: renounce and don’t file a gattam thing! Then never cross the border again.
Absolutely, for those who, especially, have no family in the US.