UPDATE: Here is the podcast: John Richardson interviewed on AMI “Contact” May 25, 2014.
Tune in this Sunday at 7 and 10 p.m. when Contact examines the Foreign Account Tax Compliance Act. The US legislation will require American expatriates to report their financial accounts held outside of the United States. This legislation will also require foreign financial institutions to report to the Internal Revenue Service about their American clients.
Some have criticized the legislation as an invasion of privacy and Canadian sovereignty. In some cases, people with Registered Disability Savings Plans are fearful the legislation could adversely affect them.
May 25: Under the controversial US Foreign Account Tax Compliance Act all non-US financial institutions, including Canadian banks, must make information known about financial accounts owned by US expatriates. Some have called the legislation an infringement of Canadian sovereignty. Toronto lawyer John Richardson discusses the legislation, its potential impact and his reasons for opposing it.
Hear more. Learn more. This Sunday at 7 p.m. and 10 p.m. make Contact …on AMI Audio.
AMI-audio can be accessed on the Secondary Audio Program of CBC Newsworld; on Bell Aliant (ch 988), Bell (ch 049), Cogeco-Ontario (ch 596), Compton (ch 088); Eastlink (ch 394), MTS (ch 704), Novus (ch 889), Rogers (ch 196), Sasktel (ch 555), Shaw (Cable) (ch 889), Shaw Direct-Advanced (ch 288), Shaw Direct-Classic (ch 825), Source Cable (ch 110), Tbaytel (IPTV) (ch 1112), Telus (ch 889) and Westman (ch 889) and at www.ami.ca.
After its original broadcast, all Contact programs are posted on our Audio Archive.
One thing that puzzles me is how will Cdn banks ferret out who is an “U.S. person”? Assuming that the account holder has not opened their account with a U.S. passport nor with any ID showing an U.S. place of birth, how will the FI know that their customer is a U.S. person? I have heard that Cdn banks expect to spend ~ $7,000 per customer in the search for U.S. indicia . . . but I am very unclear as to how they will garner such info. Can anyone shed light on how the banks will actually accomplish this goal?
They won’t. In most cases they don’t want to know. There is a lot of BS out there.
@Sasha
Everyone is wondering the same thing. Reason would seem to dictate that if one did not use a US Passport or an ID showing a US birthplace, there would be no way for them too know. However, that is based on what most of us commonly experience, merely opening a bank account. I seem to recall actually using my US passport when I opened my first bank account over 30 years ago because it was the only valid piece of ID I had when I first arrived. I also received many cheques over the years from my parents and so on and a rather large set when my father passed away a few years ago. What may/may not be retrievable via data mining, is unknown to me.
At any rate, the indicia may/may not suggest other situations that lie outside the opening of an account, otherwise, no idea why these particular items would have been chosen:
· U.S. citizenship or lawful permanent resident (green card) status;
· A U.S. birthplace;
· A U.S. residence address or a U.S. correspondence address (including a U.S. P.O. box);
· Standing instructions to transfer funds to an account maintained in the United States, or
directions regularly received from a U.S. address;
· An “in care of” address or a “hold mail” address that is the sole address with respect to the
client; or
· A power of attorney or signatory authority granted to a person with a U.S. address.
Having one of these indicia does not mean that the account is owned by a U.S. person, only that
it must be given closer scrutiny.
You may enjoy listening to this video of a recent FINA meeting in Ottawa; lots of discussion of what the FFI’s will do; the CBA representative, Darren Hannah certainly has some curious comments in this regard.
https://www.youtube.com/watch?v=T8NjUpngfxE&feature=youtu.be
at 18:12, 25:57, and 46:30
@ Sasha,
Re:
They won’t know, and they won’t care. They’ll follow the law, but they’re not going to waste their time and money doing more than the law requires.
The banks have apparently paid huge sums to software companies for FATCA implementation software, which includes pulling the files with the prescribed US indicia, but it’s not like they’re paying $7,000 per customer to private eye firms to investigate each customer. So if there’s nothing incriminating in their database, the software won’t find anything.
My financial institution already last year had a new line in an official form that asked whether I was an American citizen. I refused to answer it, leaving it blank. My adviser suggested that when submitted, my lack of response would be deemed a red flag and an investigation prompted. I am assuming that the banks will start asking all account holders the simple question – are you a US citizen. I think a Gandhi strategy would be peaceful resistance – all Canadians need to decline answering the question on the basis that it is discriminatory. That would cause some havoc and increase the purported $7000 per person charge.
WTF? Why isn’t there a show on RT? RT has the worlds largest audience and is solidly against FATCA. Yes it’s nice to have a show on whatever that service is called but so what? No one watches that. I’ve never heard of it. Sometimes we are so lame. And why is the subject of banks still allowed on this thread? Brockers use CREDIT UNIONS….NOT BANKS… GAWD, CUT IT OUT ALREADY. Those who are new here will soon find out. Another thing that needs to be front and center is a comprehensive list of Credit Unions, especially ones with under 175,000,000 in capital. People should be phoning around gathering and posting this information to a master list so people here have better options than the banks.
The following is subject to review and may be deleted to no surprise:
Mostly all I see is complaining day after day BUT NO CONSTRUCTIVE ADVICE for people. How much do we need to beat the subject to death in place of advising people to protect themselves the best that they can. Who runs this thread anyway? Free speech is banned as well as useful advice. I guess there are still some FOOLS that think appealing to the enemy’s sense of (or lack of) justice and fairness will win the day. IT WON’T AND I’LL PUT MONEY ON IT. Anyone here care to make it interesting?
@Tangogirl
I believe that is is good approach. Answer “I am a Canadian citizen and resident.” Period!
Ask them if they are questioning your nationality. Ask them if they want to know your religion or racial ethnicity as well. Let’s encourage all Canadians to answer the same.
It’s a dicey situation for long term permanent residents who never became Canadian citizens. I recently helped an elderly in-law get Canadian citizenship. He had lived in Canada for about 50 years, but had never taken the final steps to become a Canadian citizen. The paperwork was time consuming but not complex.
Here’s a tip: local Federal MP constituency offices are usually experienced and helpful in citizenship application filings. A local MP was very helpful in accelerating my elderly in-law’s application due to medical reasons. Bottom line, if your are becoming a Canadian citizen, enlist the help of your local MP. A new citizen = a new voter. Also if you are over a certain age (50 or 55) the citizenship test is waived.
Thanks everyone for sharing your thoughts.
@ pacifica777
My mother moved to Canada from the U.S. and quite likely opened her bank account in the 1940’s with a U.S. passport. Before she passed away, my sister and I held her accounts jointly and still do today. Any idea if the software will search for individuals who are deceased and their connection to living relatives? Also, do you know if the banks have the go-ahead to use their software to search for U.S. indicia prior to July 1st?
@ Tricia/ nobledreamer
Thanks so much for the youtube link . . . very interesting . . . that Darren Hannah is a real slimy weasel imo
When the small African country of Eritrea did this (tax their citizens on their worldwide incomes) our UN Ambassador Susan Rice, Yes the same person who lied to the world about Bengazi, took to the floor saying it was an outrage that any country would presume to tax its citizens on their worldwide income. At the time she was unaware that we were the only other country, in the world, who did this very same thing. There is video of her making her second most famous speech at the U.N. however she now says she never made a speech about this, but we all know the truth doesn’t make much difference to any of this administration. Both political parties here in the U.S., support this stupid law. Let us hope they will all be replaced with people who will pass the FairTax (HR25) legislation that languishes in the House ways and Means Committee.
@Sasha
The banks will do what they must to make sure they won’t be paying for the US person they harboured.
And if all else fails- they have the NSA which monitors everybody`s phone calls.
Anything else – once the law is in effect – is wishful thinking. No bank is going to cover up for any US person when they will have to pay the bill for it.
I think we can also expect the IRS to also send letters to banks for those accounts that are disclosed by a US Person advising them that such and such customer is a US Person and please note it and start reporting. The disclosure obligations of banks and US Persons create a catch 22 for both and an opportunity for the IRS to cross reference.
@tangogirl. how does one answer “Are you a US Citizen?”
The question is not “Does the USA consider you a US Citizen?” which is a different question.
I think philosophically we have all had to make tough reflections and decisions.
If you have a CLN you answer NO.
Can you answer NO without a CLN? I think you can but you would have to ask yourself several further questions. Did you commit a relinquishing act? Thats the first step because a relinquishing act means you are not a US Citizen and if you ever get a CLN it will be backdated. Then you have to look at your actions since relinquishing, do you retain a valid US passport or vote in the US? You need to do what the state department would do.
The other factor to ask would be if you live in a country that has adopted the Hague convention on nationality or in some other manner applies the master nationality rule. If you live in a country that adopts the master nationality rule, while you reside in that country, can you answer such a question with anything other than the nationality of that country?
I am now thinking that in the many countries, we are going to be forced to obtain official letters from our governments as to what is our status in our respective countries. Does the Government of Canada formally recognize the US Citizenship of a Canadian Citizen who was born in the USA?
Beyond that I think we need to press our governments to formally state in law that there is no such recognition of multi nationality.
The only problem with getting a CLN is that first, you must “sign” an admission that you are a US Citizen. This is the entrapment to US laws. Most accidental “US persons” are defined under US law as Americans. Under Canadian law, they feel have no other citizenship other than Canadian. Most here, will do o nothing with fatca and live their lives without ever crossing the border. The USA has lost significant revenues from a lot of families. this will only cause more destruction to the USA which they placed on themselves. Just look at their morals when they are desperate….
Financial Post–Canadian Border shakeup could have tax consequences for snowbirds http://bit.ly/RmeZnf IRS & CRA tracking ur every movement
@nativecanadian, exactly.
IF Bulgaria passes a law and bestows Bulgarian Citizenship on all this resident in Ontario, does that make you a Bulgarian?
Cross referencing, database mining, whichever way you look at it from the IRS’s point of view, FATCA money is more expensive collecting than getting Congress to move the US tax system from over dependence on direct taxation (income tax, CGT, etc) to more indirect taxation (GST or VAT).
The IRS is lazy and wants a ‘sausage factory’ approach to tax collection by issuing liens against property and garnishing wages. These weapons are not available to the IRS even in the 6 moronic countries that signed MCARs (Mutual Collection) agreements. If the IRS wants action it’s been broadly agreed to plug the IRS claim into a country’s own tax collection system. However the rules the IRS would have to play by may once again make FATCA money expensive. Taxpayers in other countries have rights including how any money may be paid back. Would the IRS be happy with $5 a week for all the time and effort wasted?
In the EU you’ll see it pop up in the news someday that an IGA was struck down by an EU court leaving the member state scrambling to rectify the situation. Hopefully the domestic US effort to rule FATCA as unconstitutional will succeed. However both avenues in US courts and foreign courts have to be pursued.
@ William Tidwell
Thank You for the reference on Susan Rice:
http://www.youtube.com/watch?v=gewPTSK2hJU
@ Just Me
Funny thing about swiping passports…
When travelling from UK to Europe…we left Germany to return to Canada and the Frankfurt Airport agents asked us how we got into Europe…Apparently the Chunnel staff failed to stamp our passports exiting UK-entry France….so I guess we are still living in the UK for about 2 years now… 😉
@Sasha
Here are 144 pages of FATCA guidance in Canada:
http://www.fsitaxposts.com/wp-content/uploads/2014/03/Canada-Draft-Guidance-for-Financial-Institutions-March-06-2014-2.pdf
Sasha. Polly exaggerates. Don’t fret.
Steve K you assume the IRS has resources to do all this crap. They don’t.
@KalC
Once they have the law on their side – they can do anything they want. This isn`t a joke. This is serious because it is becoming MORE serious each day. The only hope there is, are people like Rand Paul, certain Canadian parties who oppose the law, the Republican Overseas and their hiring of James Bopp to sue the government and ACA who is also giving it their utmost in Washington by lobbying and perhaps certain other countries who might say no to Fatca. If left to become what it is evolving into- this will be a whole nightmare- and I am not the only one who thinks so. It has the potential to expand and it will. For those who think they can hide out in Canada and just not pay their taxes to America an arrest warrant will be issued – it will mean never being able to travel again, because other countries will have engaged in treaties which promise to hand over “tax criminals” to America.
@ bubblebustin
Thanks for the “FATCA guidance in Canada” document . . . very interesting to see it in print . . . and scary
@Polly
You are EXACTLY correct in every aspect of your post!
As stated to me previously several times. In order for any kind of arrest warrant to be issued, you must first be found guilty of an offence. It is the USA’s “laws” that make someone guilty if broken. Being a Canadian, US laws do not pertain to Canadians. If the USA wants to try to claim back a “Canadian” for tax purposes, the person will have to be tried as someone they are not. If you follow, Canadians are Canadians. The USA cannot take that away from them. The USA must “prove” they are Americans. You will not find a judge in any Canadian court that will find a “Canadian” who lived their entire lives in Canada since shortly after birth, to be an American. This will get costly and ugly for the USA. They have no idea what kind of trouble they will cause themselves. Fatca will fail, just ask Russia and China. Those two countries have just found out how “friendly” the USA has become in desperation….