In an article at Bangkok Post. Andrew Wood writes “the arrival of FATCA has given rise to some myths”, and:
All institutions worldwide will be required to report any US citizen’s account with a value exceeding US$200,000 (6.47 million baht) for non-resident expats. That means that if you have a bank account, the details could be sent to the US Internal Revenue Service (IRS). This may seem significant, although if Americans worldwide were acting as they should, it would be insignificant and even unnecessary.
The entire article can be read here: http://www.bangkokpost.com/news/investigation/401244/is-fatca-just-for-fat-cats-us-expats-beware
You TommyH000, are the very definition of an American apologist. And this Canadian doesn’t like them. You want to comply. Go the hell ahead. In fact, better yet. RETURN to the United States since you were born there. But I’ll be damned if my family nor the families of my friends here on Isaac Brock roll over and do the same as you. We’ll be fighting till the bitter end.
@noone, you are probably right, and maybe in the future this is going to become a much bigger issue for me.
@whitekat, three things – firstly, if whoever TommyHunter is was going to change his alias and pretend to be someone else, don’t you think he would’ve come up with something a little less obvious?
Secondly, I have not said that I agree with the morality of the US taxation system – I have not commented on whether their ability to enforce their CBT is right or wrong, simply that they have the ability. However, just because you don’t agree with a law doesn’t mean that you have the right to ignore it on an individual basis. By all means, protest against it, write to your government about it and do everything in your power to change it, but when people start picking and choosing which laws they want to follow society starts to break down. This is just my broader opinion, which I am aware may be getting slightly off point, and at the end of the day it has no impact on me if you choose to ignore any laws you want (or just ignore my opinion!).
Finally, and this is just out of personal curiosity, which specific Canadians’ charter rights and freedoms are you refering to? I know nothing about the Canadian constitution/charter (sorry if I’m using the wrong terms), but it would be interesting to learn more.
@Tommyhoo, let me interject for my fellow Brockers and respond to your enquiries.
A large number here, do not consider themselves to be so called “dual citizens.” The term dual citizen is to my knowledge not recognized in law in any country. At best we consider ourselves under the proper term “clinging nationality” referring to an additional nationality that we really want nothing to do with. As a result if anything we are Citizens of ______________, with clinging US nationality.
Historically “clinging nationality” has been something that the US has fought against especially during the cold wars where clinging nationality was a problem with many eastern europeans who emigrated to the US. You should also review the Expatriation Act of 1868 which remains law in the USA and has been cited in several supreme court decisions.
You also need to review the Master Nationality Rules which is an international standard to sort the problems of multiple nationality. What this rightly clarifies is that it is impossible to have more than one nationality at a given time.
Having said all that the only example of dual citizenship that is recognized in law would be that of the European Union. A citizen of France is also a full citizen of the European Union, ditto for all others, and the passport states that.
In line with the Master Nationality Rules and the US Expatriation Act of 1868, the current formal US State Department manuals specifically state that when you are in Country X and have citizenship of Country X then your paramount allegiance is to Country X.
8 US Code provides specific ground rules for losing citizenship voluntarily. One of them requires specific forms to completed the others are based solely on the act.
Lets start with an example. There are many young men in the United States who are considered by the Turkish Government as Turkish Citizens. Turkish citizens who have lived or worked abroad for at least three years can be exempt from military service in exchange for a certain fee in foreign currencies. So even though you have a US Passport, there is a law which says you need to fly “home” to Turkey are kindly pay a fee. Do you think the US Government helps the enforcement of that law? Of course note, they cite US State Department manuals and the Master Nationality Rule!
By your logic above, why should Turkey be deprived of its young men that are needed to defend their homeland?
Lets talk about some of the Brockers in Canada. If they were considered US Citizens by the Government of Canada they would all be illegal migrants!! A US Passport without a Canadian Visa is of no use to a long term Canadian Resident. They can live out their lives in Canada because they are Canadian.
In essence the laws of Turkey on military service have as much force on a young Turk in the USA as US Laws have force in Canada.
What we have is the US Government saying that many people are US Citizens and we are saying STOP, we are Citizens of X not the USA.
Twenty/thirty years ago, there was not a problem. In order to retain US Citizenship you had to be extremely careful otherwise you would lose it. But I would argue that was good. The problem was that the Supreme Court intervened on a close vote which makes it much harder to shake away the clinging citizenship.
Then the newest problem is the issue of forms compliance, notice I did not say tax compliance. Further the forms compliance has a penalty structure that is exorbitant.
So we have a situation where many former US Citizens firmly and unequivocally disavow their former USness.
But the US Government has made it very hard to get rid of it by not doing what is required of most western countries to get rid of clinging nationality.
And a whole form industry has developed making form compliance both frightening and budget busting.
@ TommyH000
Re: ” However, just because you don’t agree with a law doesn’t mean that you have the right to ignore it on an individual basis. By all means, protest against it, write to your government about it and do everything in your power to change it, but when people start picking and choosing which laws they want to follow society starts to break down.”
Which ‘society’ break down are you talking about if USA law is not followed – the one in USA or the one in Canada? I live in Canada. I am a Canadian. I will never step on US soil again. USA laws are not the laws I follow. USA laws are not part of MY society.
Also, I would argue that I not only have the RIGHT to ignore an immoral law, particularly one enforced from OUTSIDE the jurisdiction that I live in, but I also have the OBLIGATION to ignore it. A society (that is moral and just) breaks down when people are forced to abide by immoral laws, particularly ones that are FORCED on us from OUTSIDE our society. Some people would call this an act of war.
Tommyhoo, for the charter itself go here;
http://laws-lois.justice.gc.ca/eng/const/page-15.html
I believe the two main affronts are to 15 and 8.
Peter Hogg has written on this;
http://www.greenparty.ca/sites/greenparty.ca/files/attachments/peter_hogg_fatca.pdf
In Canada there is “one class” of citizenship. You are either Canadian or you are not.
Is it lawful for a financial institution or the Government to treat a Citizen of Canada born in Toronto any differently than a Citizen of Canada born in Cleveland, OHIO USA?
There is some debate if the IGA could be enforced against US Citizens who have Permanent Residence status in Canada. But I think most agree that you absolutely can not treat two different Canadians differently based on place of birth.
I also think most here would agree that the sitting government could have agreed to require that financial entities in Canada hand over ALL information on everyone in Canada to the IRS. That might be lawful though not good for a political career.
How else is this discriminatroy? It is treating a Canadian Citizen born in Toronto to two US Citizen parents differently than the Canadian Citizen born in Cleveland, OH USA to two Canadian Citizens. Both of those children are US Citizens but one does not have the legislated indica. In theory the IGA should require that you ask citizenship of parents as well!!
I would argue that asking religion is also effective as a US Indica. There are many religious bodies in the USA not in Canada, so you could ask for specific religious denomination and get the same ILLEGAL result. You could also ask, “Where were you Baptised?” But by asking religion you get the recoil effect faster than place of birth.
So if a bank asking for a persons “place of baptism” is clearly discriminatory than so is asking “place of birth.”
While Peter Hogg would likely disagree with the following, maybe they could have let matters lay by simply asking one question, nothing else, and that is “What is your nationality?” A Canadian in Canada would answer one answer. Lots of energy and strife saved. But instead we have a witch hunt that has a resemblance to 1930s Germany.
@whitecat and george
very well said
“oh look honey there is the ussa in the rearview mirror and the rest of the world in front of us. where do you want to travel to?”
@TommyH000,
re: “just out of personal curiosity, which specific Canadians’ charter rights and freedoms are you refering to? I know nothing about the Canadian constitution/charter (sorry if I’m using the wrong terms), but it would be interesting to learn more. ”
To seek out those Canadians with a US birthplace(or other US indicia) and report their private banking information to the IRS, is likely a violation of Section 15 of the Canadian Charter of Rights and Freedoms, which forbids discrimination based on “national or ethnic origin.” In case you are not aware, Canadian constitutional lawyer Joe Arvay has been retained to provide a legal opinion regarding the likely success with a Charter Challenge. If his report indicates it is a go (which it likely will), the next step will be the actual Charter Challenge.
@whitekat ” I live in Canada. I am a Canadian. I will never step on US soil again. USA laws are not the laws I follow. USA laws are not part of MY society. ”
Do you follow Cuban Laws?
Do you follow laws of the Peoples Republic of China?
Do you follow the laws of Vietnam?
Do you follow the laws of Saudi Arabia?
Do you expect your government to protect you against the laws of Cuba?
Do you expect your government to protect you against the laws of Vietnam?
Do you expect your government to protect you against the laws of the PRC?
Do you expect your government to protect you against the laws of Saudi Arabia?
@George,
CU
“no” to the first 4 questions, and “yes” to the last 4 questions.
And if my government WON’T protect me from the laws of other countries, then I will take steps to protect myself without concern that I am breaking some OTHER country’s laws, or even my own country’s laws particularly if the only reason they become laws in MY country is because they were FORCED on my country by another.
@whitekat. ” If his report indicates it is a go (which it likely will), the next step will be the actual Charter Challenge.”
And let me add if the IGA falls on charter grounds in Canada, next stop is the European Union where it would then likely fall on similar grounds.
@Tommyhoo. The European Union is very concerned on treating people differently based on national origin!! Thats the friggin purpose of the EU!! If you can not treat a Bulgarian living in France differently than a person born in France then you can not treat a French Citizen living in France differently because she was born in Cleveland, OH USA.
It is absurd to think that a Bulgarian living in France would have greater rights against discrimination than a French Citizen living in France who by fate was born in Cleveland while her French parents were students at Case Western University.
Thats why it will also fail in the EU.
But US Residents are likely fair game.
And US citizens living abroad may be fair game.
@whitekat. I think I am starting to just now understand the place of my birth. We all have joked about the exceptionalism argument but I only recently started investigating the history;
http://en.wikipedia.org/wiki/American_exceptionalism
This is all like the “divine right of kings.”
But to be honest, the USA is no more exceptional than most countries in the world if not all countries. I know some would say that is a heretical comment.
@George,
Re: “It is absurd to think that a Bulgarian living in France would have greater rights against discrimination than a French Citizen living in France who by fate was born in Cleveland while her French parents were students at Case Western University.
Thats why it will also fail in the EU.
But US Residents are likely fair game.
And US citizens living abroad may be fair game ”
My understanding is that the Canadian charter protects all residents of Canada (not just those that are Canadian), but I could be wrong about this. In any event, anyone deemed a ‘US person’ living in Canada who is not a Canadian, should get their Canadian citizenship asap.
@whitekat, I know what you are saying and fully agree that a US Person should either become a citizen or move home. I hate to say that but its the cards on the table.
I am solely guessing that either side will lose something in court. In the end the US Permanent resident may not be protected because their US Passport is the Property of the United States and can be revoked. I would also guess that the US Government would submit in support of the IGA and make strong arguments that they have a right to this information from their citizens.
But it looks like a slam dunk charter challenge for Canadian Citizens with only clinging US nationality.
Yet I am rooting for a complete slam down for anyone in Canada and full charter protection for all.
@TommyH000
On the contrary, no one here is “ignoring” American law any more than the Sons of Liberty ignored the Tea Act, which sparked the American Revolution.
If what you really mean is to “not comply” then it should eventually dawn on you that many here are making a conscious and conscientious effort not to. Perhaps you should consider changing your name to the more apt “Uncle Tom”.
@George, thank you for your comments and references – you make a few good points and have given me something to think about in terms of US FATCA and the overall US tax regime. I am happy to admit that the CBT regime of the US is oppressive and morally/legally questionable, although I still maintain my position on compliance and using more official means of protest rather than simply not complying.
However, I do disagree with your point about it failing in the EU. Whilst I believe you are correct in your statement that “The European Union is very concerned on treating people differently based on national origin”, I believe that this is based on discrimination of people from different EU countries in a similar situation within EU countries.
This is not something I am overly familiar with, but i understand that one of the concepts of the EU is that the local law of an EU country cannot be in contradiction to EU law. This stops persons from different EU countries (and in certain circumstances, 3rd countries) being treated differently in comparable situations. US FATCA, without taking into account IGAs, is not local law. Furthermore, where an IGA has been signed and FATCA implemented into local law i still do not belive it would be seen as discriminatory as, for example, it would not discriminate between:
1) a person born in the US, holding a French passport and living in France, and
2) a person born in the US, holding a Belgian passport and living in France.
My question @whitekat and @bubblebustin is, if Canada sign an IGA and implement FATCA as local law, where will you stand on your position of non-compliance? Again, I agree with your point on it being a very strange and morally/legally ambiguous situation where the US tax law is enforced in Canada and, although I wouldn’t do the same, I can understand why you have made the concious decision to not be compliant on moral grounds. However, if it is local Canadian law, those arguments appear to fall away.
UK and EU FATCA will almost certainly go ahead and will be less of a contentious issue as the countries involved all operate a residency based tax system.
My key issue with US FATCA is that despite introducing the regime and forcing the world to comply, they will (probably) be the only country in the world that does not require their financial institutions to report on account holders.
Would be interested in people’s thoughts.
@TommyH000 re: “My question @whitekat and @bubblebustin is, if Canada sign an IGA and implement FATCA as local law, where will you stand on your position of non-compliance? Again, I agree with your point on it being a very strange and morally/legally ambiguous situation where the US tax law is enforced in Canada and, although I wouldn’t do the same, I can understand why you have made the concious decision to not be compliant on moral grounds. However, if it is local Canadian law, those arguments appear to fall away. ”
Who said bubblebustin and I chose non-compliance as a way to deal with FATCA?
Regardless, I will try to answer your question assuming the scenario of a Canadian with a US birthplace who has never filed a US tax return or FBAR.
Only those Canadians with savings in non-exempt registered accounts, over 50K will be reported on. This will eliminate a lot of ‘non-compliant’ Canadians from being reported on. In fact, I would guess that MOST Canadians with US birthplace will not be reported on due to these exemptions IF they are aware of FATCA and understand what’s going down.
Even for those who are reported on, the Canadian government has repeated over and over again, that this is JUST an information ‘exchange’ (although it is a one way ‘exchange’ from Canada to USA…lol), and as such FATCA does not directly facilitate collection of penalties. And the government has said it will not collect penalties (or taxes) incurred by Canadians if they were Canadian at the time the penalty or tax was incurred.
So, if I was a Canadian with a US birthplace who had never earned a dime of US source income, and had been a Canadian my entire life, and had never been in the IRS system, but was reported on via FATCA, and got a penalty notice in the mail worth more than I actually had in the bank, I would frame it and put it on my wall. It would make for one hell of an interesting conversation piece.
One thing does not have to do with the other. The reason FATCA exists is to leverage US access on the host nation. Of course you need a nice reason and to lay the blame on someone. What better group than those American’s who are removed from US soil. The Russian gov’t provided the US the blueprint for FATCA. Take that to the bank.
“… if Americans worldwide were acting as they should, it would be insignificant and even unnecessary.”
The statement is ludicrous since while it is within the purview of every State to determine whether a particular person is a citizen, there are limits to exorbitant claims by any State. It may not matter that Greece or Iran for example assert their nationality against multiple generations born abroad because those States do not make practical claims against such persons unless they are found on their territory.
The USA on the other hand has made the whole world enforcers of its tax, money-laundering, bribery, trading with the enemy, human rights and other laws. Because it has extorted enforcement of the tax laws from the world’s financial services providers (on pain of draconian fines and forfeitures from those banks and brokers) anybody who has or may have a facial claim to US Person status is left with the burden of proving a negative. This may require a CLN even if, under reasonable legal opinion, an individual lost US status decades ago, or perhaps never had it.
And worse, under US law as interpreted by US courts the process for proving loss of US nationality may, itself, constitute reclaiming it (“availing oneself of an attribute of American citizenship”).
I remember in 1985 when Samuel K. Doe was elected President of Liberia. But Liberia had a mirror constitution of the USA and Doe was only 34 years old. What did he do? He went before a judge and had himself declared 35 years old.
I guess that’s the answer: forum shopping for a judge who will declare someone non-American. After all, the English courts have several times ruled (usually in asylum cases) that an applicant possesses a foreign nationality (and so could be deported) even though that other country denies the fact and will not accept the deportee back. And there are notorious cases, including the Swiss decision in Levita-Mühlstein v. Dépt. féd. de justice et police, Trib. féd., 14 June 1946, A.T.F., 72-I, 1946, p. 407 (Nazi denaturalisation of her German Jewish husband was contrary to natural law therefore the Swiss court would ignore the Nuremberg laws and Levita-Mühlstein in turn would be deemed German and to have lost her Swiss nationality: in other words she became in practical terms stateless.)
It is a fair question why, if someone, born abroad, has never had any contact with the US Government, has never been to the USA, that person should be put to the proof of not ever having possessed its nationality. The Unwed border moms article linked elsewhere on this site is just one more example of how arcane, and how incapable of interpretation by a foreign bank, US nationality law is: http://www.afsa.org/PublicationsResources/ForeignServiceJournal/FeaturedContent/April2015SpeakingOut.aspx
I have some doubts as to how brave foreign judges and foreign governments will be to assert their, and their citizens’ rights and prerogatives against IGAs and FATCA. I wonder whether the USG will be at all embarrassed if, as I predict, the notoriety of millions of possible American citizens abroad ignoring the threat of reciprocal enforcement (by foreign tax authorities) of IRS claims and the impossibility in practice of such enforcement taking place on a huge scale — much less indictment for tax crimes? I suppose not, since enforcement of taxes and indictment for crimes generally is subject to absolute discretion. And in the end, most tax evaders and most criminals get away with it, statistically speaking.
The trouble is that the more the failure to enforce (and impossibility of enforcement) abroad against citizens and possible claimants to citizenship comes to light, the less respect for tax law everybody will have. The IRS prosecutes selectively where they can get publicity “pour encourager les autres”. But then, according to the 1st June Times of London, p. 16, “Low level tax evaders face jail in new purge” by HMRC. Perhaps, if IRS decides to crack down, they will seek enforceable judgments and (as some state and local governments have done) turn to private sector bill collectors to get their money. I am doubtful whether such a judgment will make taxes enforceable abroad but who knows: Lord Mansfield’s dictum has already lost much of its lustre, United States of America v. Harden has lost half its authority. IMHO.
Sorry for the rant.
@George wrote:
“@Tommyhoo. The European Union is very concerned on treating people differently based on national origin!! Thats the friggin purpose of the EU!! If you can not treat a Bulgarian living in France differently than a person born in France then you can not treat a French Citizen living in France differently because she was born in Cleveland, OH USA.
“It is absurd to think that a Bulgarian living in France would have greater rights against discrimination than a French Citizen living in France who by fate was born in Cleveland while her French parents were students at Case Western University.”
You raise, perhaps without realising it, substantial questions of EU law. European Union law does not address, except within narrow limits (which have been broadening but that’s another story) issues of nationality and direct taxes, and this abstention gives rise to serious FATCA-related problems.
Thus: every EU/EEA/Swiss citizen has the right to establishment for economic reasons throughout the Union and treaty partners. Does this mean that EU law overrides US tax treaty restrictions of benefits to citizen-residents (after all, to begin with, under the Ireland Act 1949 an Irish citizen will never be an “alien” in the United Kingdom, and the Good Friday Agreement gives further rights).
One may (and does) have fewer rights in his or her own EU/EEA/Swiss country than when moving to or living in another country within the region. Recent ECJ rulings have made this worse: a dual (British/Irish for example) national who has never exercised cross-border establishment rights cannot claim them, for example, to bring a fiancé(e) to Britain free of racist British immigration law.
I do not think that place of birth outside the EU/EEA/Switzerland gives rise to any EU rights. Swiss citizens can be happy: their passports and ID cards show only their commune of origin. http://www.swissinfo.ch/fre/societe/racines_les-suisses-attachés-à-leur-lieu-d-origine/34873436 Without looking at one’s Acte d’état civil or family register one will never know where a Swiss citizen was born, something not true of others.
What the ECJ might do, if a case is brought to it by the court of a Member State, is to address the legality in European law of exorbitant USG declamations on citizenship, obligations, exceptionalism. Or the ECtHR might do so: it’s asserted in the past the immunity from income tax penalties of the heirs of a noncompliant (Swiss) decedent.
There is always room for surprises from the ECJ. Apostolides v Orams was a remarkable decision that went exactly contrary to a treaty provision, holding Republic of Cyprus law valid and effective even in North Cyprus and so enforceable throughout the EU.
Interesting article by Nigel Green on asking future presidents on their stance about http://www.cpifinancial.net/news/post/31506/devere-presidential-candidates-owe-it-to-america-to-explain-their-stance-on-controversial-fatca#.VW2HZOrxE0w.twitter …
Thanks for the link, 2terrified2sleep. Absolutely, each candidate needs to weigh in and reveal to potential voters their support on this important issue or why FATCA should be repealed — as should the government candidates in other countries on the IGAs their countries signed to implement FATCA. Good for Nigel Green in introducing this.
We could certainly use the assistance of *homelanders* who need to know how this will affect the US and those who live there:
Can they imagine what it means that:
That is, US sovereignty, as few there seem to care about any other countries’ sovereignty.
Even if every homeland American were given the FATCA and GATCA basics, most still wouldn’t get it, and even less would care.
FATCA is about catching rich tax cheats that live overseas – the myth prevails.
And as far as GATCA is concerned, once again this is about wealthy people stashing money in other countries to avoid paying taxes – the difference being (versus FATCA) these Americans actually live in the USA (oh, and other countries besides the USA get to catch their resident tax cheats also). For those who think they have nothing to hide (i.e. they live in the USA, and have no accounts outside USA, which is most Americans) – what’s the big deal?
As an example of homeland Americans who don’t get it – my twenty-something daughter’s love interest is an American living in the USA (yes, she has been warned) whose father is Attorney General of a southern US state and is running for Governor in 2016. His wife is a lawyer also; they are intelligent, well-educated people who you would think would immediately grasp the unfairness of FATCA. After having FATCA explained to them, and being aware that I am a Canadian living in Canada who just happens to have been born in the USA, they believe I must have done something ‘wrong’ for the Canadian government to be handing over my financial information to the USA.
We can’t win. Or maybe I am just in a pessimistic mood today.
Clearly intelligence and education does not relate to thoughtfulness.
@ 2terrified2sleep and calgary411
Nigel Green says, “I would also urge Americans who care about prosperity and freedom to take up the call to seek to have FATCA repealed.”
I appreciate his ardent anti-FATCA stance and I’m pleased that he won a prestigious award for this but I say, “I would also urge Nigel Green who obviously cares about prosperity and freedom to donate to ADCS which has taken up the call and is taking a major step towards having FATCA repealed by challenging the implementation of FATCA in Canada.”
EmBee,
He’s been asked personally I think and declined. So, yes, I agree.