A Brocker recently received this letter from her MP with regard to the IGA.
Dear xoxo
I shared your concerns about the U.S. Foreign Accounts Tax Compliance Act
(FATCA). 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.
A number of constituents contacted me with their concerns during the
negotiation-process. As a New York-licensed lawyer who practiced
international law prior to entering public life, 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.
Among other things, I also arranged for prominent U.S. tax attorney Mark
Matthews to come to Ottawa on May 30, 2012 to brief Caucus members
concerning these matters. Mr. Matthews not only works with Canadians who
have U.S. tax problems, but he also served previously as Deputy
Commissioner at the IRS.
As you know, the underlying objective of FATCA is to combat tax evasion.
However, the Canadian Government was concerned that FATCA would impose
significant compliance obligations on Canadian financial institutions, and
raise significant privacy concerns for Canadians. Canada is not a tax
this legislation are honest, hardworking and law-abiding citizens who have
dutifully paid their Canadian taxes.
FATCA would require non-U.S. financial institutions to report to the U.S.
Internal Revenue Service (IRS) accounts held by U.S. taxpayers. A key
would compel Canadian financial institutions to report on account holders
who are U.S. residents and U.S. citizens (including U.S. citizens who are
residents or citizens of Canada) directly to the IRS – thus potentially
violating Canadian privacy laws.
Under the agreement on February 5, financial institutions in Canada will
not report any information directly to the IRS. Rather, relevant
information on Canadian accounts held by U.S. residents and U.S. citizens
(including U.S. citizens who are residents or citizens of Canada) will be
reported to the Canada Revenue Agency (CRA). The CRA will then exchange the
information with the IRS through existing provisions and safeguards of the
Canada-U.S. Tax Convention. This is consistent with Canada’s privacy laws.
There are a number of exemptions you should know about. Registered
Retirement Savings Plans, Registered Retirement Income Funds, Registered
Disability Savings Plans, and Tax-Free Savings Accounts will not be
reported to the IRS. In addition, smaller deposit-taking institutions –
such as credit unions – with assets of less than $175 million will be
exempt from FATCA.
The 30 percent FATCA withholding tax will not apply to clients of
Canadian financial institutions, and can apply to a Canadian financial
institution only if the financial institution is in significant and
long-term non-compliance with its obligations under the agreement.
I encourage you to seek advice on your specific circumstances from an
independent tax advisory with appropriate experience.
With best regards,
John Weston, M.P.
George…
Words are important, and you have made a very good point.
I think that is exactly how those who have clinging U.S nationality should refer to themselves. Not dual citizens, but citizens of the country of their residency with this clinging nationality problem!
Could someone find out what the following words (which I have seen several times) actually mean? I don’t suppose it is possible that they mean only the information that is currently exchanged between the two countries will be exchanged under the IGA–or the IGA would be worthless and CRA would be sitting on a lot of useless detail:
CHILE…….WTF?
“” We just signed the intergovernmental agreement to take over the obligations under FATCA , U.S. legislation on accounts of residents and American taxpayers who are abroad, and from the point of view of U.S. avoids evasion taxes, ” explained yesterday Finance Minister Felipe Larraín , who signed the treaty with the charge d’affaires of the U.S. Embassy in Chile, Stephen Liston.
Both parties signed what is known as an IGA 2 ( Mode 2 Intergubenamental Agreement ) . Something AFP Association of Chile ( AAFP ) had commented in an interview with People Funds Latam, was very important and necessary because much facilitate management level Administrators .
The IGA 2 is an agreement that implies no automatic exchange of information , but each financial institution must send the information from financial accounts held by U.S. taxpayers , prior consent , which respects the Chilean legislation on this issue. If the holder decides not to consent , financial institutions must report aggregate information only taxpayers U.S. investors Moreover, if the U.S. tax authority requires further information to their goals of preventing tax avoidance , it should make a request for information under clearinghouse of information that was already negotiated in the Convention for the Avoidance of Double Taxation signed between Chile and United States in 2010 , currently being ratified by the legislatures of both countries.
– See more at: http://fundspeople.cl/noticias/chile-se-convierte-en-el-primer-pais-de-latinoamerica-en-firmar-fatca#sthash.olZX8znY.dpuf“
Opinion,,,,,,many of these so called agreements are fictitious or so watered down so as to be a non event. The USA is now so desperate to ram this nonsense down the throats of all world governments that they are carelessly signing anything at all that will allow them to add another country to the stupid idiot list and be able to say to other countries “see? now we have 26 clowns that have signed so step right up you’re the next contestant on ‘Let’s Make a Stupid Deal’
Uh oh, talk about FAT.CA
The phoney Harper
http://www.yummymummyclub.ca/sites/default/files/styles/large/public/harper_nude_painting.jpg?itok=SdrHFJB-
The True Harper
http://www.yummymummyclub.ca/sites/default/files/styles/large/public/harper_nude_painting.jpg?itok=SdrHFJB-
ooops the phoney harper
http://1.bp.blogspot.com/-X4V4mnqN5sU/TeVS01zi7ZI/AAAAAAAAB0A/nyKCQ_cNoao/s1600/family.jpg
I wonder if Mr Weston would just as “thrilled” if I shoved a copy if the FATCA regulations up his a_ ss.
Better yet, all here send a copy of the FATCA regulations to Mr JackAss Weston and tell him to wipe his a_ ss with it
Seems to me that Weston is passing insane. I suggest that every Conservative MP (at both Federal and Provincial levels) be informed that they will NOT get further contributions or votes if FATCA is adopted.
I have just sent the following email (spelling and grammatical errors included) to Weston:
Dear Mr Weston,
I have this morning read a communication from you stating that you are THRILLED that an IGA has been negotiated with the US under the US FATCA law. I and many others consider such IGA a breach of Canada’s Sovreignty and specific breach of our Charter of Rights and Freedoms. I have to question your fitness to stand as an MP.
Be assured that should the IGA be adopted in Canada, the Conservatives are unlikely to form a Government here again for many decades. The number of voters that your party are alienating is huge.
I pray that you will NOT pass enabling legislation and instead will simply state to the US that their extra-territorial efforts are unacceptable. Instead the US should adopt civilized Residency Based Taxation and to focus on catching their own RESIDENT tax evaders within their own borders using time honoured laws.
I am shocked that a Canadian Government, worse a Conservative Canadian Government, would treat Canada’s Sovereignty in so cavalier a fashion.
Sincerely,
North American Bald Eagles are incensed to be called American Bald Eagles. “We have no partisanship” says one Bald Eagle named Harry, who lives in Serpentine Fen. “It’s a case of the United States thinking that they have ownership over us. Next thing they’ll do is imply that we are part of their tax base. How do you put a figure on the number of rats and the latest dead carcass that we consume and what sort of tax form do I fill out and send in? Hell, I don’t even have fingers, damn it!?” He looked off to the side and gave me a gimlet stare with one of his eyes “I’m sorry, but I’m Canadian. I was born and raised in Serpentine Fen and haven’t ever been across the border. I have no idea why the United States would think that I’m part of their own and pay taxes to the IRS? That’s absolutely f*ng ridiculous!” At that Harry gives off a resounding snap of his beak in annoyance.
Harry looks over at the Canada Geese milling around aimlessly on the pond a few meters over. “Snowbirds” he mutters disgustedly. “The IRS should take a look at those bastards. They spend six months out of the year in the United States munching on US resources, flying in US skies. Hell they even down US planes for heaven’s sake. At least they’re using resources in the United States. We don’t use a single piece of vermin in the US and we get taxed. We hunt, kill and feed our young all up here in Canada. Our lives are spent up here and the United States wants to tax us? Are they kidding me? I talked about it with Ma and Pa in White Rock and Mom n’Pop in Green Timbers, y’know, friends of mine, and they’re telling me that extraterritorial taxation is a crock of shit. Hell, I’m not going to pay it.” Harry says. “It’s not a fair tax and Obama can go kiss my feathered ass!”
Harry snorted contemptuously as he looked around trying to see if there were any crows present. “Those bastards will rat you out.” he said. “You hear about that amnesty program, called OVDP?” he said with a disgusted look “One of my buddies over by the Delta Dump went into that. He got taken for a ride. They wanted tax returns from 6 years back and to admit that he was guilty of tax fraud because he didn’t claim 66,000 rats taken last year. He didn’t know he was supposed file that stupid piece of paper called an FBAR.”
“Lil’ Chucky”, Harry grumbled. “He got away with his villa in the Dominican Republic.”, “James…” he said. “…the list goes on. These bastards get to shill for the tax paying public and get away scot free when they evade taxes. It’s a mother lode of bullshit.” Harry said as he preened his feathers. “And they’re coming after the small guys like us. Well…I can’t wait until I get classified as a Canadian Bald Eagle…” he paused for a moment.
“Well…did you know that Canada signed an IGA with the United States on February 5th, 2014?” I asked him.
“Bloody Fucking Hell!!” Harry swore vehemently. “Maybe I need to ask my friend Boris, he’s a Eurasian golden eagle, if he’s got a place I can crash at for the next forty years.”
Love it, Animal!
Its not a full moon yet, is it?
Full version: Complete with pi’tures… 😛
http://animalroamingbouttown.blogspot.ca/2014/03/bald-eagles-dont-call-us-american.html
re QM’s question on “existing provisons” and protections. Weston is referring to the US Canada Tax Treaty. This is the treaty where US agrees to give 100% credit for Canadian taxes paid to US citizens and then renegs on its agreement – without consequence – by imposing a host of limits on deductions and double taxes.
Be that as it may, there are absolutely NO privacy protections in the Treaty. The CRA can share information with the IRS without telling you and the US Gov is under no material restrictions as to what they can do with the information once sent. It is cold comfort to know the IRS can’t just publish the information in the New York Times I guess, but nothing stops them from using it to have Treasury launch an FBAR prosecution even if they asked for information to look for taxes owing (even when, as is almost always the case, no tax is owing – just FBAR penalties which are not at all part of the Treaty) just for a simple example.
The only protection for the citizen in the Treaty is that CRA cannot be made to collect taxes for the US against a Canadian citizen from and after the date they become Canadian.
Fundamentally, the Treaty is government to government and is not intended to provide any protections to individual privacy rights and, of course, it succeeds marvelously in that goal!
For Wetson to crow that they have secured these protections is the most disingenous and sillyi boast imaginable. If, as he claims, he is an international tax lawyer by training, he knows all of this and more and doesn’t believe a word he wrote (or that was written for him). The harm the IGA does is not in creating new tax liabilities but in feeding an illegitimate beast (the IRS) fresh Canadian meat and forcing Canadians to defend themselves against it WHETHER OR NOT they are guilty of anything under US law (for they certainly are not under Canadian law). Shameful use of Orwellian newspeak by this MP I’m afraid.
WhiteKat,
We’re just approaching the Full Moon (March 16) so lots of time for even crazier happenings: http://www.almanac.com/content/full-worm-moon-marchs-moon-guide (I hope the frozen ground here gives way to worm castings for robins, likely not in March here though.)
And, did you know:
Mar 9, 2014 – Daylight Saving Time Starts
When local standard time is about to reach
Sunday, March 9, 2014, 2:00:00 AM clocks are turned forward 1 hour to
Sunday, March 9, 2014, 3:00:00 AM local daylight time instead
Sunrise and sunset will be about 1 hour later on Mar 9, 2014 than the day before. There will be more light in the evening.
Also called Spring Forward, summer time, and Daylight Savings Time.
@ The_Animal
Love your eagle story and your photography. I wish I had realized you had a blog before this. Since I don’t have the right “profile” to comment there I’ll say here — keep ’em coming and thanks!
Maybe our Canadian government dopes would get it if we all started to file our US returns first, payed our US taxes owing, and then claimed a big fat foreign tax credit when we got around to filing our Canadian returns….resulting in no Canadian taxes owing.
In real terms that’s what allowing the US to expand its tax base into Canada means!
@ maz57
That’s better than lateral thinking. That’s reverse-engineered lateral thinking … or something. Very good! If the Canadian government accepts that some of its citizens can have two tax masters then the least it can do is let them decide which one they’ll feed first and which one gets the left-over crumbs.
Well as a Canadian I would never actually do such a thing, but the scenario might be useful as a graphic illustration for the bone-heads who just can’t seem to grasp what FATCA and the signing of the IGA really mean.
April 15th (the IRS deadline) is two weeks before April 30th (the CRA deadline)!
And for the further edification of MP Weston:
From Senator Rand Paul:
“FATCA infringes upon basic constitutional rights, for under FATCA, private data of anyone considered a “U.S. Person” would have details of their financial assets provided to the IRS without a warrant requirement, suspicious activity report (SAR), or any allegation of wrongdoing at all. Stated in its simplest form, FATCA would require every non-American financial institution (such as banks, credit unions, pension funds, stock and investment firms, etc.) to register directly with the IRS and agree to provide specified financial data on the accounts of any “U.S. Person.” Perhaps even more troubling, the implementation of FATCA has allowed the Treasury Department to make independent decisions with respect to the sovereignty of foreign nations and the privacy of United States citizens. In order to implement this law, Treasury has initiated intergovernmental agreements (IGAs), citing the intent to engage in reciprocal information sharing with other nations. In other words, the Treasury Department, without the consent and authority of Congress, will force U.S. financial institutions to provide the bank account information of private customers to foreign nations.
“FATCA is a textbook example of a bad law that doesn’t achieve its stated purpose but does manage to unleash a host of unanticipated destructive consequences,” Sen. Paul said. “FATCA’s harmful impacts cover the spectrum. It is a violation of Americans’ constitutional protections, oversteps the limits of Executive power, disregards the mutual respect of sovereignty among nations and drains money from the federal treasury under the guise of replenishing it, and discourages overseas investment in the United States.”
http://www.paul.senate.gov/?p=press_release&id=793
Em, it’s just what I call my “opinion” blog – my views on everything (whether people want to hear it or not). My photography blog is a blog called “Maniacwcamera”.
The most important take aways from Senator Pauls statements and his subsequent lawsuit against the NSA and Obama Administration are:
Warrantless searches. Fourth Amendment violations. ( it applies to FATCA as well as NSA and cellphone users, etc) Without Warrants is an important issue, more than we can express.
AND that the US Treasury and IRS are illegally negotiating IGA’s with foreign governments because they cannot get FATCA implemented otherwise. “Without consent and authority of Congress”
These two factors alone should have precluded MP Weston, with all his ‘expertise’ and the caucus, Finance Department, Minister Flaherty and all those who negotiated this dog pile , from signing ANYTHING with those who are NOT authorized to negotiate or sign anything. Even at that they know they will not keep their word, yet are foisting this off as a great deal done by the Conservative government for Canada.
IF they had any balls at all , both the government and the banks, they could have just said NO and there would be NO consequences for they could NOT implement FATCA otherwise on any nation.
@ The_Animal
Thanks for the photography link. We used to own a small photo lab so I still have an interest. I developed a good colour eye from that venture into the world of small business, considering everything was black&white for me in my previous world of x-ray technology.
MP John Weston and the rest of the Conservative party need to be shown that even US Treasury International Counsel admits that US reciprocity is a MYTH:
……At that same conference, the Treasury’s International Tax Counsel Danielle Rolfes acknowledged that the United States currently does not have legislation in place that would permit the U.S. to comply with reciprocal reporting under FATCA or the OECD’s Common Reporting Standard, but added that the Administration was committed to pursuing such legislation.”
from; ‘Treasury Official Says Penalty Grace Period Unlikely for FATCA’
March 5, 2014
http://www.cadwalader.com/thecabinet/regulatory_updates.php?ID=7327&date_filter=5
Since we don`t get straight answers from our government representatives, perhaps we can ask questions here about what is exempt and just what that means for US Persons in Canada — I`m confused so I`ve asked a few. Perhaps others can ask more specific questions. : Tax Connections, Ronald Marini: Canada Limits Model I FATCA Agreement