“Anyone else getting the FATCA Call” (from MapleSandbox.ca)
Has anyone received the FATCA call from their bank, investment firm or other financial institution?
Johnnb posted the following under What’s New, but it definitely needs its own thread:
In a previous post I described how my wife and I decided to get our (backdated to 1973) CLNs. We applied in January of 2012 and the CLNs arrived in July 2012. We promptly made copies and gave one to our financial advisor at Scotia McLeod.
Last week we got a phone call from our financial advisor saying we now had to provide our old US social security number (haven’t got a clue what they were) and fill out a W8-BEN. Told her we weren’t filling out any US IRS forms ever again.
She then informed me that she has been instructed to call every person on her client list and ask each and every one of them five questions:
Are you a US citizen?
Were you born in the US?
Did you reside in the US for more than 183 days last year?
Two others that I missed because she was going so fast.She said she was amazed to find so many of her clients who had ties to the US!
Anybody else getting this type of call?
We’ve missed you Johnnb. Good to see you back–but not with this information. Thanks for sharing.
Lynne commented and asked:
I think it’s important we remember this call was from Scotia McLeod, which is the investment arm of Scotia Bank.
For some reason, investment accounts are treated differently than bank accounts and many people have been asked the “US citizen” or “US person” question in the past on investment accounts even before FATCA. Like Hazy, I have never been able to understand why and no one has been able to explain it to me.
This, however, goes far beyond being asked to complete a form. This was a telephone call specifically to ask a long time customer the “US person“ questions. It is especially frightening that the call was from an organization that already had the CLN provided by the customer.
I have no idea if this is the first step towards banks asking all their customers that question or if it just one investment firm. Whatever it is, it’s alarming. Hazy, I really appreciate you checking it out with others.
Johnnb: What was the response of the Financial Advisor when you said you would not complete any IRS forms
Johnnb answered:
@Lynne: I give her full marks. When I said I wasn’t going to fill out any IRS forms she said she’d get back to me and she did. Some stuff was moved to a TFSA and other stuff moved around and now no W8-BEN is required.
Don’t think this will work for many others. We are approaching the time when we have to move RRSPs to RRIFs and other investments are minimal.
Other comments on this post are at “Anyone else getting the FATCA Call” (from MapleSandbox.ca)
Why do any business with Scotia Mcleod? They had a CLN on file. If this is going to be their practice for those who have a CLN, filed it with them, and have jumped through all the existent hoops to prove to the US State Department that they are no longer a US person, then that is requiring Canadian citizens within Canada to prove their non-US citizenship over and over again, which is totally unacceptable.
Think how many more USP’s Scotia McLeod could ferret out if they had the substantial presence test correct!
It is a bit strange and more so for me b/c my bank knows I am still a USC and yet, I have never been asked to fill out anything giving permission for disclosure.
Of course, I have virtually nothing but still weird.
http://samuelclemmons.wordpress.com/2014/01/28/laws-equally-stupid-as-fatca-securities-act-of-1933/
Laws equally stupid as #FATCA: Securities Act of 1933
January 28, 2014 //
To give you an idea of the extent of the stupid existing laws, take a look at Securities Act 1933, where “sales of the securities be made outside the United States and that no offering participant (which includes the issuer, the banks assisting with the offer and their respective affiliates) engage in “directed selling efforts”. In the case of issuers for whose securities there is substantial U.S. market interest, the regulation also requires that no offers and sales be made …to U.S. persons (including U.S. persons physically located outside the United States).”
This is the reason that foreign banks have policies of never selling financial instruments to “US persons”. ….. etc
And so it begins … wish johnb could have remembered the other 2 questions. I could answer NO, NO, NO to the first 3 but have to wonder about those other 2. How long will it be before ordinary savings and chequing account holders, even with credit unions, will be given the IRS grilling by proxy agents? We have the smugger Darren Hannah misleading the FINA committee while the mugger Roy Berg berates the muggees. Outrageous!
Recently I went to my CU to open a simple daily savings account. To my amazement I already had one which they never gave me statements for because it only had 4 cents in it (no idea how that happened). How ridiculous that a faithful FBAR filer in that situation might be liable for a $10K fine for discovering years late that s/he had a 4 cent account. Anyway the assistant manager had no nasty questions for me (none expected), just a pleasant conversation about what their new systems update would mean for me. Basically it means one consolidated statement each month, instead of multiple (no more unknown accounts I guess). You see my CU had just gone through a major computer update of some kind which had their system shut down for a couple of days. Of course I was wondering if that might have had something to do with FATCA but I dared not even mention that to the assistant manager. Anyway there were suit & tie computer guys hovering over the tellers in case of problems but the teller I saw that day said all was going smoothly. It’s not fun trying to guess what is going on behind the closed doors of the meeting rooms of our financial institutions right now.
This may be nothing, but a few days ago one person I know received an undated letter from HSBC Bank Canada stating that there would be changes to this person’s account in 30 days.
The person was encouraged to go to the New Agreement on the website to read and understand the changes, which include clarifying when the bank can share tax info with third parties. There will be obligation to respond to requests and there can be consequences if the account holder is not able or willing to do so (close, block accounts services etc.).
Account holder was instructed to go to New Agreement at http://www.hsbc.ca/accountopen but I was unable to open the link (required download of latest Adobe–I refused) and GwEvil had to access this for me with some difficulty.
Access and look through the Agreement and go to page 32 where you will find statement that by opening the new (and old?) account you certify that you are not a US person or acting for or on behalf of same etc…
@Stephen Kish
HSBC is doing this world wide… they have stopped all types of accounts except for basic needs. Also, new pamphlet was sent to update their privacy issues… comes down to… no privacy for US persons anywhere. Same bank who gladly took my money & offered me all these private services have now decided I am a toxic taint. That is why I have issues with HSBC & TD… they will be the first to reveal all they have on u.. legal or not
All:
Be careful on what u say or do… Some financials are using the… ohh… we need to update your info… can u verify… x… y… z… Before… I never thought much of it & just said it… now I think carefully before I say anything. I am not saying to lie… I am just saying… don’t give more info then asked… U don’t have to explain yourself to anyone
I refused to believe it for a long time, but maybe people were right when they guessed that FFIs would err on the cautious side and ask everybody these questions, and report everybody (ignoring the various optional thresholds).
My only hope is still credit unions that are deemed compliant due to their local-client-base-only policy.
@ US_Person_Foreigner
Can you tell me why you included TD in your comment? What issues have you had with them?
@LM Are you serious about TD ? what scares me is the utter ignorance of people here who still deal with transnational banks. I’ve said this 100 TIMES HERE: GET OUT OF THE BANKS JUST ON GENERAL PRINCIPLES. THOSE WHO STILL DEAL WITH BANKS HAVE NO PRINCIPLES !!! Too bad.
Solutions: GOLD AND SMALL CREDIT UNIONS
To bad no one here had the foresight to post lists of credit unions under 175 million who wouldn’t dream of even picking up the phone if they knew someone from the IRS was on the line.
People here wasted precious time expressing indignation and surprise on a daily basis when they should have been using this time to outsmart the enemy and offering suggestions on how to protect themselves. But no, censoring posts and preventing important suggestions was the order of the day.
BTW WHERE IS JOE ARVAY LOL.
@LM
They were the 1st ones to jump on the fatca bandwagon before any IGA was signed… check this site… there was a separate post on it. TD use to be canadian… to me… they seem to be more american then canadian now… I don’t like the way they sneak things in, change things without advance notice, or they have these hidden fees… My other family members have been with this bank for over 50 yrs… Canadian business should protect canadians… not foreigners…
@Chears…. “Solutions: GOLD AND SMALL CREDIT UNIONS”
Technically, any FI that is considered a Local Client Base FI not just small credit union. But you have to be careful and ensure that it is not a part of a transnational larger firm.
I strongly disagree with posting links to Local Client Base FI including small credit unions. That would attract unwelcome attention on such firms. That IS giving knowledge to the likes of your southern neighbor who may decide to go after those firms next!!
Regards to Joe Arvey? Legal action can not be taken until there is a law.
@Chears asked “Where is Joe Arvay.”
Joe Arvay is in B,C. Stephen has had frequent communications with him–including over the weekend.
@all –
I understand tempers are (justifiably!) running high here and at Maple Sandbox, but I’d like to clarify something about the W8-BEN:
This is not actually a form sent to the IRS. It’s a form for the bank to keep, and what I would call a “cover-your-a$$” form. Basically you state that you aren’t a “US person” so if the IRS comes along later and finds you are, they can say “Well, he lied, it’s not our fault.”
This form has been around longer than FATCA – it was part of the standard account opening documentation at least in 2009 when I started working at a bank, and I don’t have it in front of me but I think we were using the 2006 or 2007 version. We worked with high net worth clients and pre-FATCA the purpose of the W8-BEN was in reference to investment in US bonds etc.
We had many (most, actually) clients without a trace of “US personhood”, and believe me anyone who was able to sign that form did so happily – the US people had to sign a W-9, which does take your SSN and link you up with the Powers That Be back in the old country.
If someone would sign a W8-BEN AND have a US place of birth, the bank would ask for a CLN. We did have some unfortunate souls who had their OMG moment as they had no idea they were US citizens until that point….. 🙁
So basically this form is actually what you DO want to tell the bank – that you are NOT a “US person” for tax purposes. To be backed up with a CLN if necessary.
Hope that helps.
My problem with this is that it’s national origin discrimination.
If everyone who invests in US securities has to fill out a W8-BEN, that’s one thing – at least it’s not discrimination based on national origin. But the IGA (relevant text and link below) seems to say that even if a person is not a US citizen, if that person was born in the US, they still have to fill out a W8-BEN.
National origin/place of birth is an immutable fact. If I am reading the IGA correctly (maybe I’m not), it means one could never totally escape the US and is blatant discrimination.
EG: Take 3 Canadian citizens:
(1) If the Canadian citizen is also a US citizen, they have to fill out an IRS form (W-9);
(2) If the Canadian citizen is NOT a US citizen, they don’t have to fill out an IRS form; EXCEPT
(3) If the Canadian citizen is NOT a US citizen but was born in then US, they have to fill an IRS form (W8-BEN). The IGA doesn’t say anything about if the person has US investments or not. Just that they have to fill out a W8-BEN.
I note that the IGA (relevant text below) says “may be on an IRS Form W-8BEN or other similar agreed form.” So what does “may be” mean and who agrees on the form? The bank and the customer? I’d presume the bank is likely to be of the “my way or the doorway” approach when it comes to “agreeing.” Perhaps not necessarily “the doorway” literally, that they’d close the account, but would forward the account information to CRA (to forward to IRS) as a recalcitrant account holder.
Also does the IGA mean that s. (1) is stand-alone, and that only s.(2) and s. (3) are combined? Or must all 3 criteria be met? The placement of the “and” after s. (2) but not after s. (1) is a bit ambiguous. As the conjunction “and” is used in the English language, either interpretation could make sense – but there’s no “or” between s. (1) and s. (2).
At any rate, it sounds like Scotia-MacLeod is combining all three criteria.
This is from Page 21, (B)(4)(a) of the IGA
http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf
“Where the Account Holder information unambiguously indicates a U.S. place of birth, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:
(1) A self-certification that the Account Holder is neither a
U.S. citizen nor a U.S. resident for tax purposes (which
may be on an IRS Form W-8 or other similar agreed form);
(2)
A non-U.S. passport or other government-issued identification evidencing the Account Holder’s citizenship or nationality in a country other than the United States; and
(3)
A copy of the Account Holder’s Certificate of Loss of Nationality of the United States or a reasonable explanation of
(a) The reason the Account Holder does not have such a certificate despite relinquishing US citizenship; or
(b) The reason the Account Holder did not obtain U.S. citizenship at birth.”
@Shunhatra: The person who received the call had previously provided his Financial Advisor a copy of his CLN dated 1973. As Pacifica said, the questions went far beyond what is required for required for a W8BEN. The Advisor said she had a directive from Toronto to call all of her clients.
@ Shunrata,
(1) Re:
The W8-BEN also has a box for the person’s SSN and the proposed enabling legislation (if I’m reading the proposed enabling legislation correctly, Bill C-31 100 (1)(6)(a)
) will enable a fine for not providing it.
I understand that the W8-BEN is not sent on to IRS. Nevertheless, if all US born persons are automatically required to fill one out, but non-US born persons are not automatically required to fill one out, I’m still opposed to it because it’s national origin discrimination.
(2) Re:
That is interesting that Australian banks were asking for place of birth as early as 2009. Definitely pre-FATCA. Actually I may have got that wrong. You said that the FFI in Australia was asking for W8-BENs at least as early as 2009. but not specifically that they were asking for place of birth at that time.
(3) Re:
I have no problem telling anyone I’m not a “US person.” I have a problem with having separate procedures for people based solely on where they were born. That is if people with an “unambiguous US place of birth” must fill out a US govt form, even if they are not a citizen of the US, for the sole reason that they were born there. Although my neighbours and fellow citizens born in Toronto, Copenhagen or Delhi do not.
(4) I hope you don’t think I’m dumping on you. I really do appreciate you’re sharing your banking background. I’m just in a bad mood tonight. 🙁 🙂
@Blaze
I was referring to 1) the original request for the W8-BEN, which was answered with “Im not filing out any more IRS forms” and 2) the comments assuming this is a post-FATCA form.
Re already having given them a CLN – yes they’re two pieces of the same puzzle. The bank needs both.
Also these places tend to ask for forms to be “refreshed” every few years. Don’t know why, I think they’re in the tree killing business.
The request for a former SSN was bizarre though. The phone questions are definitely due to the July 1 Fatcapocolypse.
And the real outrage is CBT, which is the underlying evil in all this.
@shunrata
I am familiar with the old W8BEN. The new version is 8 pages long.
http://www.irs.gov/pub/irs-pdf/fw8bene.pdf
@ Tricia,
I had some US stock in the 1970s. My dividends arrived with a percentage already taken off. I recall it as 15%. I could be wrong, as I think I’ve read that now they’d take off around 30%. Might have been different then.
Anyway, I’d never heard of a W8-BEN 40 years ago. I knew I could get my 15% back simply by filing a US tax return. Why bother? We’re talking about quarterly dividends of around $12. Not worth the hassle.
In the 1990s, I invested in a US mutual fund which I kept for a few years, through my Canadian bank, as a way of diversifying. Still had never heard of a W8-BEN. I wasn’t asked to fill one out (but if I had been it would have been as a person investing in the US (choice), not as a person born in the US (immutable fact). And maybe the whole thing was irrelevant because it was a mutual fund. I really don’t know.
One thing I can say for sure. This is 2014 and the US is most welcome to withhold 30% of every dollar I got from the US. Because after these past three years of my life, the US is tied in last place of the countries I would ever invest in. Unless it changes, big-time.
@Tricia,
Wow! Never saw anything like that.
The W8-BEN we were using was an internal bank form that was pretty simple and bears no resemblance to what you referenced in your link.
@pacifica
–Where I worked everyone had to fill out the form, not just Merkins. Problem was if you were a US person you couldn’t fill it out! and had to deal with the W-9.
–This wasn’t an Australian bank (I have yet to find one that seems to care where I was born!), it was the foreign office of an Israeli bank. The banking people there, as opposed to the general populace, have had their antennae up for years.
–No I don’t think you’re dumping on me. The whole business is an outrage, there are things that get me more angry than the (old) W8-BEN though the new one looks pretty scary.
@Chears
Let me get this straight – you think we should buy gold, right? =)
Tricia. You referenced the wrong W8. Your link is to W8 Ben-E. Which is not for individuals. W8ben is for individuals, is one page, and isn’t sent to the IRS. It is used to tell withholding agents that the person concerned is not aUSC so they can benefit from reduced withholding.
Pacifica. You ‘get your 15% back’ by using it as a tax credit on your Canadian taxes.
Re:
Thanks, KalC. I’d thought in the 1970s that I’d have to file a US tax return to get back the approx $20 per year on the withheld interest my stock. So I didn’t. Didn’t realise I could have taken it off my Canadian taxes.
I sure won’t invest in the US again though — or even give even a dollar to a US charity, for that matter — due to that country’s quest to bleed every possible dollar out of and demonise every person who was born in, or had any connection to, the US.
@KalC
You are right. Jumped the gun. Thanks for pointing it out.
@Pacifica
It could have been the 15% treaty rate. I know when my IR/annuity interest came, it was automatically 10% taken off because it was sent to a foreign address.I asked them to take an extra 5% thinking that was the treaty rate. Fortunately, even when I closed them out and was renounced, because the income was effectively connected to a US business, no 30%.