397 thoughts on “The Canada United States FATCA Intergovernmental Agreement”
In reading the draft agreement it appears to me that a person with a US birthplace who has renounced may still have their accounts reported to the US unless the bank decides to undertake additional work. Section B(1) seems to provide that an indication of a US birthplace in the bank’s electronic records makes the account a US Reportable Account. Section B(3) says that the bank must report the account unless it elects to undertake addional due diligence and see if one of the exceptions in B(4) applies. Perhaps I have misread this but it seems to leave people who were once US citizens, but who no longer are, still subject to having their information disclosed to the US government, unless the bank elects to do additional work to verify that they are not US persons.
I hope there will be something in the enacting legislation that might require the banks to undertake such addition due diligence.
My sister and I were born to Canadian parents in the ’50s in California. I sent her the following the other day when we were exchanging email about renouncing, FATCA, etc:
Welcome to the Hotel California,
…
We are programmed to receive,
You can check out anytime you like,
but you can never leave.
VanCity 17.1B in assets
But the threshold is $175 MILLION in assets. That rules Vancity and Coast Capital out completely…and most of the other credit unions in the Lower Mainland. The only that is left is CECC.
I still don’t understand why no country has tried to challenge the 30% withholding threat in front of the WTO. The reason every country in the world signed the IGAs are because of the devastating withholding consequence. Why didn’t they try that before even negotiating anything? Why did they all cave in to extortion? It would be nice to have access to the closed door negotiation minutes.
I wonder if Canada is going to get the Keystone pipeline for having signed the IGA.
Bottom-line: this is all way above our pay grade. The decisions are in the interest of ‘the country’ – whatever that means. Makes me want to exile myself on a deserted island.
The CLN is the golden ticket to freedom. All else is folly.
Even “Community Savings” is not exempt. Assets are $429,588,669. So case in point. If you live in the Lower Mainland: no place to hide until the renunciation – let that be a warning to anyone . 🙁
FTW…for some, a CLN is not a situation that can be easily obtained. Canadian Citizenship process has to be saved up for to initiate the process, then the $450.00 is not easily saved up in the bank, because the person has to work in order to save up that money in the meantime paying rent and trying to feed a family? How do you suggest those people proceed or should they prostrate themselves to the IRS and hope that Uncle Sam uses LUBE?
Animal… Plan ‘Z’?:
1. Hope nothing much happens until October;
2. Get << $50k into a CU account to operate with;
3. At what seems a mission critical time, (maybe now?) turn or start to turn all other instruments into cash; put in safe place;
4. Buy CSB's in October in 5K increments;
5 Refill operating account as necessary by cashing bonds as required.
6. Don't even think about crossing the border.
While there’s no doubt today’s announcement is a disappointment this is far from the end of the story. This 47 page document is just the wording of an agreement; it’s not yet binding. It’s my understanding that the enabling legislation must be introduced, discussed, debated, and voted on in Parliament. How long will that take? The Cons have a majority and can ram through any legislation they want. However, how many of those Conservative M.P.s might have some sort of US connection? How many have lots of US connected constituents? My guess is quite a few but they don’t advertise it because it’s hardly conducive to getting elected in Canada.
The opposition parties can be counted on to vote against it. How many Cons might vote no as well? I can imagine the fireworks during question period as the Cons are accused of selling out Canadian sovereignty; it’s indefensible. (Plus national origin discrimination, privacy law violations, and so on.) Allow a free vote. So what if the measure didn’t survive? Could the government then turn to the US government and say “look, we tried, but it was a no go, sorry”.
Or maybe the government already has expert legal opinion that it likely won’t survive a Charter challenge. So pass it, let the lawsuits begin and the courts can do the dirty work. There are so many moving parts here that it’s really hard to predict where it will all wind up. How many Canadian politicians want to hitch their wagon to a US law that’s likely to be a fiasco? What if it is ultimately repealed in the US once the full disaster has become apparent?
The carve-outs for all the Canadian registered plans are nice (I notice they even include those PRPPs that don’t even exist yet as far as I know.) So if a registered plan isn’t a reportable account, does the IRS still tax them? How could they tax them if they are invisible to the IRS? If they aren’t FATCA reportable, why would a person still unfortunate enough to have to file a US return bother including them on FBAR and 8938? There are more questions raised than are answered by this announcement.
But I do know one thing….there are going to be a lot of accounts with a $49,000 balance come next Canada Day!
@US_Person_Foreigner
“Because of this fatca crap… there is a new underground economy… take cash out of bank… & know one sees it again… cash only transactions..”
EXACTLY
It is not illegal to own gold bullion, which by the way is increasing in value as we speak. Is you stinking rip off bank account offering you a decent ROI if any at all? SO WHY AREN’T YOU ALL AT YOUR COIN AND BULLION DEALERS RIGHT NOW? ARE YOU ALL FOOLS? If you don’t diversify then you will probably never have a future. If you don’t get out of the transnational banks and keep falling for the “You’re Richer than you Think” BS then you are totally hopeless. People this is NOT a game. Cash out at least half of your liquid assets and buy gold Maple Leafs or other bullion products (silver as well) and for God’s sake don’t store it in a bank. Sure, report it if you have to but who cares if they know, it’s NOT illegal to own gold, homes, cars whatever but sure is hard to try to confiscate (metal) if you handle it on the up and up. Dif you know that 1,000,000.00 worth of gold will fit in your cars glove compartment? Tell you banker to kiss your ass by closing unnecessary accounts and tell them you don’t trust them and are going to invest in REAL money…..gold and never listen to their bullshit again. I dream that ALL Canadians will wake up and run down to the bank and vote NO CONFIDENCE in the Canadian dollar which is losing value daily as gold goes up. No Brainer
hieronymus We have < $50K, hell we have < $5,000…never even saw $50,000 before in my life in one single lump sum. Never have we had anything greater than $9,000 in the bank at any time, but problems persist in:
a) all bank accounts regardless of the fact that FATCA has implemented a $10,000 limit on reporting have to be reported on your FBAR
b) The FBAR is the stic( or substitute n)king point in this whole FATCA pile of shit which makes penalties payable of minimum $10,000 per FBAR not filed. So if you haven't filed your FBAR as per requirements, you could be liable even if you don't pay one red cent of taxes for fines up to $50,000 and more depending on how long you've gone non-filing your FBAR.
The thought of giving up citizenship breaks my heart. I risked my life defending that flag and what it used to stand for. As a former marine I am bound for life to the words- semper fi.
But now I feel I must protect my family from the very county that I fought for. So somehow I will find the strength to relenquish my citizenship.
But it is with a broken heart.
Sorry for the ramble. I just had to get this off my chest. It’s been festering for months. Thanks for your time.
This is but one of hundreds of dealers where you can buy bullion coins or bars
and for daily articles on gold, pro and con this site from Montreal is used by EVERY dealer in Canada for quotes etc.
KITCO http://www.kitco.com/
And PLEASE listen to Gerald Celente, you will get the truth absolutely
PLEASE…PLEASE…PLEASE READ THIS:
Everyone says $50,000.
That is absolutely wrong.
Bank accounts with an aggregate balance of over $10,000.00 (that means multiple bank accounts added up that total up to $10,000.00) is the reporting threshold of FBAR which is what triggers the draconian penalties.
Please stop posting the false “Less Than $50,000” figure, it’s a trap.
So did my father who fought the Nazis in WW2 and now comments that the USA has now become everything he fought against. yes it hurts him to say that but he finally can see the light. When he found out that George Bush Sr’s father financed Hitler that was the day the penny dropped for him.
How Bush’s grandfather helped Hitler’s rise to power http://www.theguardian.com/world/2004/sep/25/usa.secondworldwar
@Animal
I look at $450 for a CLN as an investment for my family’s future. The alternative would amount to self-prostration for the rest of my life.
I feel no loyalty frankly anymore to Canada or the U.S. Canada just sold me down the river and the U.S. calls me a criminal. From now on I’m out for me and my family and nothing more. The idea of citizenship loyalty now sickens me.
I don’t care if you can manage to cough up $450.00 for a CLN at the drop of a hat. I’m talking about the alternatives for people of “modest income” who can’t afford to save up for a CLN because they have to have a roof over their head (albeit some other person’s roof to which they are paying rent to) who have neither the time or the monetary means to drop money on their credit card to start the various machinations to rid themselves of the ball and chain of US citizenship. What flicker of hope do you have for them… or are you going to say… “C’est la vie… I guess you’re fucked”?
@The_Animal
Forbes is TOTAL Bullshit. No one should EVER enter the OVDP as it is almost and admission of wrong doing and we have done nothing wrong. Somewhere on this site is information on that. Hardly anyone has joined. Those that do have lots more problems.
Petit Suisse, according to my husband there could also be an issue of Canadians who settled in the US without doing the paperwork to declare themselves non-residents for tax purposes and also settling up with the CRA via their “exit tax”. Maybe they are who Canada is looking for as well.
In reading the draft agreement it appears to me that a person with a US birthplace who has renounced may still have their accounts reported to the US unless the bank decides to undertake additional work. Section B(1) seems to provide that an indication of a US birthplace in the bank’s electronic records makes the account a US Reportable Account. Section B(3) says that the bank must report the account unless it elects to undertake addional due diligence and see if one of the exceptions in B(4) applies. Perhaps I have misread this but it seems to leave people who were once US citizens, but who no longer are, still subject to having their information disclosed to the US government, unless the bank elects to do additional work to verify that they are not US persons.
I hope there will be something in the enacting legislation that might require the banks to undertake such addition due diligence.
@The_Animal: I don’t where in BC you are, but, Nelson Credit Union (as well as Rossland CU affiliate) have $26M, Heritage CU has $148M
others: link from BC Central Credit Union:
http://www.cucentral.ca/Connections/FATCA%20Anxiety%20Increasing%20FINAL.pdf
I need something in the Lower Mainland of BC.
My sister and I were born to Canadian parents in the ’50s in California. I sent her the following the other day when we were exchanging email about renouncing, FATCA, etc:
Welcome to the Hotel California,
…
We are programmed to receive,
You can check out anytime you like,
but you can never leave.
VanCity 17.1B in assets
But the threshold is $175 MILLION in assets. That rules Vancity and Coast Capital out completely…and most of the other credit unions in the Lower Mainland. The only that is left is CECC.
http://www.biv.com/article/20130122/BIV050102/130129987/-1/BIV/biggest-credit-unions-in-bc-ranked-by-2011-assets
I still don’t understand why no country has tried to challenge the 30% withholding threat in front of the WTO. The reason every country in the world signed the IGAs are because of the devastating withholding consequence. Why didn’t they try that before even negotiating anything? Why did they all cave in to extortion? It would be nice to have access to the closed door negotiation minutes.
I wonder if Canada is going to get the Keystone pipeline for having signed the IGA.
Bottom-line: this is all way above our pay grade. The decisions are in the interest of ‘the country’ – whatever that means. Makes me want to exile myself on a deserted island.
The CLN is the golden ticket to freedom. All else is folly.
Even “Community Savings” is not exempt. Assets are $429,588,669. So case in point. If you live in the Lower Mainland: no place to hide until the renunciation – let that be a warning to anyone . 🙁
FTW…for some, a CLN is not a situation that can be easily obtained. Canadian Citizenship process has to be saved up for to initiate the process, then the $450.00 is not easily saved up in the bank, because the person has to work in order to save up that money in the meantime paying rent and trying to feed a family? How do you suggest those people proceed or should they prostrate themselves to the IRS and hope that Uncle Sam uses LUBE?
Animal… Plan ‘Z’?:
1. Hope nothing much happens until October;
2. Get << $50k into a CU account to operate with;
3. At what seems a mission critical time, (maybe now?) turn or start to turn all other instruments into cash; put in safe place;
4. Buy CSB's in October in 5K increments;
5 Refill operating account as necessary by cashing bonds as required.
6. Don't even think about crossing the border.
While there’s no doubt today’s announcement is a disappointment this is far from the end of the story. This 47 page document is just the wording of an agreement; it’s not yet binding. It’s my understanding that the enabling legislation must be introduced, discussed, debated, and voted on in Parliament. How long will that take? The Cons have a majority and can ram through any legislation they want. However, how many of those Conservative M.P.s might have some sort of US connection? How many have lots of US connected constituents? My guess is quite a few but they don’t advertise it because it’s hardly conducive to getting elected in Canada.
The opposition parties can be counted on to vote against it. How many Cons might vote no as well? I can imagine the fireworks during question period as the Cons are accused of selling out Canadian sovereignty; it’s indefensible. (Plus national origin discrimination, privacy law violations, and so on.) Allow a free vote. So what if the measure didn’t survive? Could the government then turn to the US government and say “look, we tried, but it was a no go, sorry”.
Or maybe the government already has expert legal opinion that it likely won’t survive a Charter challenge. So pass it, let the lawsuits begin and the courts can do the dirty work. There are so many moving parts here that it’s really hard to predict where it will all wind up. How many Canadian politicians want to hitch their wagon to a US law that’s likely to be a fiasco? What if it is ultimately repealed in the US once the full disaster has become apparent?
The carve-outs for all the Canadian registered plans are nice (I notice they even include those PRPPs that don’t even exist yet as far as I know.) So if a registered plan isn’t a reportable account, does the IRS still tax them? How could they tax them if they are invisible to the IRS? If they aren’t FATCA reportable, why would a person still unfortunate enough to have to file a US return bother including them on FBAR and 8938? There are more questions raised than are answered by this announcement.
But I do know one thing….there are going to be a lot of accounts with a $49,000 balance come next Canada Day!
@US_Person_Foreigner
“Because of this fatca crap… there is a new underground economy… take cash out of bank… & know one sees it again… cash only transactions..”
EXACTLY
It is not illegal to own gold bullion, which by the way is increasing in value as we speak. Is you stinking rip off bank account offering you a decent ROI if any at all? SO WHY AREN’T YOU ALL AT YOUR COIN AND BULLION DEALERS RIGHT NOW? ARE YOU ALL FOOLS? If you don’t diversify then you will probably never have a future. If you don’t get out of the transnational banks and keep falling for the “You’re Richer than you Think” BS then you are totally hopeless. People this is NOT a game. Cash out at least half of your liquid assets and buy gold Maple Leafs or other bullion products (silver as well) and for God’s sake don’t store it in a bank. Sure, report it if you have to but who cares if they know, it’s NOT illegal to own gold, homes, cars whatever but sure is hard to try to confiscate (metal) if you handle it on the up and up. Dif you know that 1,000,000.00 worth of gold will fit in your cars glove compartment? Tell you banker to kiss your ass by closing unnecessary accounts and tell them you don’t trust them and are going to invest in REAL money…..gold and never listen to their bullshit again. I dream that ALL Canadians will wake up and run down to the bank and vote NO CONFIDENCE in the Canadian dollar which is losing value daily as gold goes up. No Brainer
hieronymus We have < $50K, hell we have < $5,000…never even saw $50,000 before in my life in one single lump sum. Never have we had anything greater than $9,000 in the bank at any time, but problems persist in:
a) all bank accounts regardless of the fact that FATCA has implemented a $10,000 limit on reporting have to be reported on your FBAR
b) The FBAR is the stic( or substitute n)king point in this whole FATCA pile of shit which makes penalties payable of minimum $10,000 per FBAR not filed. So if you haven't filed your FBAR as per requirements, you could be liable even if you don't pay one red cent of taxes for fines up to $50,000 and more depending on how long you've gone non-filing your FBAR.
The thought of giving up citizenship breaks my heart. I risked my life defending that flag and what it used to stand for. As a former marine I am bound for life to the words- semper fi.
But now I feel I must protect my family from the very county that I fought for. So somehow I will find the strength to relenquish my citizenship.
But it is with a broken heart.
Sorry for the ramble. I just had to get this off my chest. It’s been festering for months. Thanks for your time.
This is but one of hundreds of dealers where you can buy bullion coins or bars
http://www.bullioncoinsandbars.com/buying.htm
I like this site because it shows updated prices on its site but I do not deal with them
Another must have site on your phone or computer is this one
http://www.netdania.com/Products/live-streaming-currency-rates-foreign-exchange/real-time-quotes/QuoteList.aspx?m=q
and for daily articles on gold, pro and con this site from Montreal is used by EVERY dealer in Canada for quotes etc.
KITCO
http://www.kitco.com/
And PLEASE listen to Gerald Celente, you will get the truth absolutely
PLEASE…PLEASE…PLEASE READ THIS:
Everyone says $50,000.
That is absolutely wrong.
Bank accounts with an aggregate balance of over $10,000.00 (that means multiple bank accounts added up that total up to $10,000.00) is the reporting threshold of FBAR which is what triggers the draconian penalties.
Please stop posting the false “Less Than $50,000” figure, it’s a trap.
http://www.forbes.com/sites/robertwood/2013/06/25/will-irs-find-your-small-foreign-bank-account/
@hdxlch
So did my father who fought the Nazis in WW2 and now comments that the USA has now become everything he fought against. yes it hurts him to say that but he finally can see the light. When he found out that George Bush Sr’s father financed Hitler that was the day the penny dropped for him.
How Bush’s grandfather helped Hitler’s rise to power
http://www.theguardian.com/world/2004/sep/25/usa.secondworldwar
@Animal
I look at $450 for a CLN as an investment for my family’s future. The alternative would amount to self-prostration for the rest of my life.
I feel no loyalty frankly anymore to Canada or the U.S. Canada just sold me down the river and the U.S. calls me a criminal. From now on I’m out for me and my family and nothing more. The idea of citizenship loyalty now sickens me.
I don’t care if you can manage to cough up $450.00 for a CLN at the drop of a hat. I’m talking about the alternatives for people of “modest income” who can’t afford to save up for a CLN because they have to have a roof over their head (albeit some other person’s roof to which they are paying rent to) who have neither the time or the monetary means to drop money on their credit card to start the various machinations to rid themselves of the ball and chain of US citizenship. What flicker of hope do you have for them… or are you going to say… “C’est la vie… I guess you’re fucked”?
@The_Animal
Forbes is TOTAL Bullshit. No one should EVER enter the OVDP as it is almost and admission of wrong doing and we have done nothing wrong. Somewhere on this site is information on that. Hardly anyone has joined. Those that do have lots more problems.
http://isaacbrocksociety.ca/2012/01/28/the-ovdi-drudgery-for-minnows/
Petit Suisse, according to my husband there could also be an issue of Canadians who settled in the US without doing the paperwork to declare themselves non-residents for tax purposes and also settling up with the CRA via their “exit tax”. Maybe they are who Canada is looking for as well.