This article has also been published at The Hill’s Congress Blog. It’s a great opportunity to directly reach a Congressional audience so we encourage readers to get over there and comment!
This is the second article by Caldwell in Canada’s conservative-leaning Financial Post and is much stronger than the first. I have asked Mr. Caldwell to send his article as a submission to Canada Finance (deadline March 10).
A few excerpts:
“FATCA, passed by the U.S. Congress in 2010, is an extension of America’s anomalous and larcenous practice of demanding taxes from people, regardless of where they reside in the world. The United States is one of only two countries that engage in this disgraceful conduct (Eritrea being the other.)
….Let us eliminate a deliberate misconception: This agreement is not about catching “tax cheats” as its proponents aver and journalists obediently repeat. It is about expanding America’s oversight of global commerce, while increasing its ability to confiscate funds to which it has no legitimate claim.
Notwithstanding that Canada’s leaders have subjected their citizens to the most rapacious and malevolent tax department in the world in the form of the IRS, they have committed a craven surrender of national sovereignty.
As a dual citizen I appreciate and have benefited from the unique trading relationship of these two countries. But in this case the United States is being a bully and, like many bullies, needs a smack in the nose. Canada, meanwhile, needs a leader with the sand to deliver it.
A simple no would suffice. Call America’s bluff, if indeed that’s what it is. If however the U.S. means what it says and really were to begin slapping a 30% withholding tax on Canadian investors, Canada should respond by granting an immediate tax credit in that amount to affected individuals and institutions. This may take a bite out of federal tax receipts, but right is right. If America’s largest trading partner were willing to stand up against such preposterous demands, other countries woudl have the courage and blueprint to do the same….”
I see Theo got his article in The HILL…
This is good, because the U.S. Politicians read it!
so now i am really getting confused
based on the above “Existing administrative procedures authorize the IRS to collect taxes in the following ways:
a. Canada: All taxes.”
does this mean just taxes or would this included fines as well?
seems to me that based on the above the idea/plan of renouncing and then just not becoming tax compliant and never go to the us of a ever again just might have gone out the window. it would be bad enough having to look over your shoulder just thinking of if or when the knock may come on the door
to read the above and know that some day the know will be coming certainly changes the thought process of renouncing and sticking your head in the sand.
can someone please clarify if this reading of the above is correct
Do you mean is the “promise” of Finance Minister Flaherty and the Canadian Government as faux as the promise of reciprocity for Canada?
Brian Mahany (taxconnections) says citizen based taxation is “a great idea”. Interesting.
For Brain Mahany, cross-border tax compliance specialist, citizenship based taxation is a windfall. Of course, it is a great idea. He’s not the victim.
just got a response to my 8th email to my m.p. john weston….it was fairly lenghtly but this was in the first paragraph
Thank you for your emails, and I apologize for the delay in responding. I shared your concerns about the U.S. Foreign Accounts Tax Compliance Act (FACTA). I am thrilled to report that on February 5, 2014, Canada and the United States signed an inter-governmental agreement under the longstanding Canada-U.S. Tax Convention. This agreement brings a series of lengthy negotiations to a conclusion which, I believe, will be of great benefit to dual citizens and Americans living in Canada.”
i am very glad that mr. weston for one is “thrilled” and that this agreement will be of “great benefit” to all of us.
i am at a loss of words that my representative in ottawa was “thrilled” to throw me under the bus.
mr. weston also wrote
“I took the initiative among Government Caucus members to contact and consolidate information from a circle of top US lawyers and accountants. I contacted them in an attempt to provide our Finance Minister, the Honourable Jim Flaherty, with their insights as people who advise Canadians with IRS reporting obligations. I believe – especially after this announcement – that Minister Flaherty took our concerns forward effectively.”
still shaking my head……
This is your opportunity to explain to your MP why he should not be thrilled with the IGA. He obviously does not understand FATCA or CBT. He is buying the slanted media reports that paint this as a good deal simply because most of our registered accounts are not FATCA reportable. He is buying his own party’s propoganda.
On the plus side. he likely, truly, just does not have a clue! Once he does, he will either reveal himself to be unworthy to represent his constituents, or he will have a complete 360 change of opinion.
SET HIM STRAIGHT. Give him the facts. Send him links to some of the more intelligent articles that have been written (like Theo’s). Let him know that our registered accounts are still toxic to Canadians with ‘US person’ status. Tell him that TFSAs, RESPs, RDSPs are taxable, and require yearly complex, expensive reporting. Tell him about Canadian mutual funds being dreaded PFICS. Tell him how our principal residences are subjected to capital gains tax when we sell them at retirement. Tell him how most of the 1 million so-called ‘US persons’ in Canada have not been filing US returns, and how they will be assessed confiscatory penalties when IRS finds out about them. Tell him that USA is the only country, except Eritrea that has CBT, and that it cannot enforce it without the help of other countries. ETC.
@ bubblebustin i know you are in mr. westons riding as well
is there anyway i can get you a copy of his e mail to you?
it is fairly lengthly and could be an interesting read for you or at least to add to the growing pile of information on your desk
Re: ETC, tell him our Canadian only spouses, children, and elderly parents, as well as business partners, can no longer have us on their accounts because this causes their accounts to be FATCA reportable as well. Tell them, how women who are dependent on their husbands, will soon find themselves without access to the family banking accounts because of their ‘US person’ status. Tell him, how most Canadians with ‘US person’ status STILL DO NOT KNOW ABOUT FATCA AND CBT, and how when this becomes common knowledge, there will be a revolt.
John Weston knows what’s going on, I had a lengthy face to face discussion with him on it. His assistant is married to a USC. Please, Pacifica, give Mettleman my email address. I would most appreciate hearing the rest of what he has to say. My husband’s planning to give him a call, this info will help him prepare. Thank you.
BTW, info seminar planned for Vancouver on Feb 22, 1pm, 1010 Richards (enter rear of bldg).
thank you. will get that off to you asap
would not miss the vancouver meeting for anything.
@mettleman, my MP is sick of hearing from me (almost daily recently), but your comment inspired me to write again. I copied in Flaherty, Trudeau and Harper too.
Dear Pierre Poilievre,
How can selling the private financial account details of Canadians whom US designates as US tax payers, possibly be a good deal for Canada?
The current government is spinning it as a good deal by focusing on the exemptions of some (not all, for example LIRAs) registered accounts from FATCA reporting. Although these accounts are not FATCA reportable, they are still FBAR reportable and are also taxable and considered ‘foreign trusts’ by USA. The exemptions from FATCA reporting, do not change the fact that USA taxes those who neither live nor earn within its borders.
By agreeing to FATCA, our Conservative government is actually FACILITATING the enforcement of USA’s unique to the world citizenship based taxation laws, which were previously unenforceable, and not well known as evidenced by the many panicked Canadians who are just waking up to this. I am quite convinced, most are still asleep. and fully expect that our current government is aware of this and planning an early election before the rest of the bears wake up from their blissful slumber.
Our Canadian mutual funds are still considered ‘passive foreign investment corporations’ subject to the nastiest taxation, and most complex reporting requirements known to man-kind (not an exaggeration) – USA does this to dissuade Americans from investing in foreign mutual funds. Canadians with ‘US tax payer’ status are treated as though they actually live in the United States. This means they have no way to save and invest for their retirements, or their childrens education. None of the benefits of being an American, for example writing off mortgage interest, are available to NON-RESIDENT US citizens. Thus we are screwed both ways.
Do you have any idea how complex, and expensive it is to do the annual US filing required of a Canadian living a normal Canadian life – 2-3 K per year is not unusual if you have a TFSA, RESP, RRSP and invest in Canadian mutual funds. In order to keep annual filing costs under 1000, you need to have a VERY simple life, and be a pauper with no investments.
Is our government encouraging us to commit tax evasion, by its efforts and success (used sarcastically) in exempting some of our registered accounts from FATCA reporting? If it is pushing this as an accomplishment, it is saying, ‘don’t worry, IRS won’t find you because the Canadian government won’t tell on you; just make sure you do not have > 50K in any non-registered accounts (with some exceptions as I mentioned for example LIRAs) and we won’t tell if you don’t.’
On that note about LIRAs, which are Locked in Retirement Accounts, how is someone supposed to protect that very legitimate retirement account from FATCA reporting since it is LOCKED in with no option to roll it into a RRSP until after age 54?
Name not withheld
U are right. I had been reading his blog but noticed a change from.. I am sorry this is happening to all u tainted people to come clean & obey the law.. Jack Townend was another who seemed to have sympathy but now seems to say.. U are all guilty… pay up. All these vultures hear is the cash register filling up with money… They are all jumping on the big ass money maker they see
Why don’t you respond by inviting John Weston to the info session? Maybe he can explain why the IGA is a good thing to us.
great idea will do
On Em says posting:
Existing administrative procedures authorize the IRS to collect taxes in the following ways:
(2) Levying financial institutions: The IRS can levy on the assets of a taxpayer that are held in a foreign bank so long as the foreign bank has branches in the United States. Similarly, the IRS can levy on a taxpayer’s wages from a foreign corporation so long as the foreign corporation has branches in the United States.
Basically, the CRA’s promise not to collect FBAR penalties or any IRS penalties from Canadian citizens is not worth that much given the fact that accounts held at TD Bank or RBC or other transnational banks can be levied by the IRS….
Tell them about this next time someone says you should have known about your US tax filing obligations, when TD and other banks with their fleets of lawyers didn’t even know about the far ranging ramifications of CBT on its customers and it’s assets held in the US.
They should be ashamed of their reckless foray into the US.
Exactly. My recommendation is to get out of transnational banks and into credit unions or provincial banks like Alberta Treasury Branch. And try not to work for a corp. with US branches. For now at least, anyone employed by a Canadian only company and using a credit union can hope that the no tax/no penalty collection statements by Flaherty and the IGA hold.
I agree, but finding a credit union that is convenient and easily accessible is not that easy..in Quebec, even the Caisses Desjardins expanded in the US.
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