I asked Beach Metro News to publish our ADCS press release, but they said it was against policy. However, the editor told me that if I was to write a Letter to the Editor, it would go into the next edition of the paper. Sure enough, he featured it prominently on page 6 with a headline he added that couldn’t be better. Perhaps our gang could go make some comments 🙂
Click here to make comments on the online version:
GwEvil’s Letter to the Editor
That’s a great letter, GwEvil! Congrats on getting your letter to the editor published. Do they they have an online edition where we can comment? Nice work!
@Bubblebustin – I provided a link right there where it says “GwEvil’s Letter to the Editor
Great letter GWevil.
My comment:
Re: “Accidental Americans punished by US-Canadian Agreement”
Thanks for printing Gwen D’s letter regarding what many refer to as “the worst law that no one has ever heard about” – the American law, called the “Foreign Account Tax Compliance Act”. As a Canadian born to Canadian parents in the US, but having left USA as a baby, I have been following the FATCA drama in Canada and throughout the world, for the last year and a half. With the recent implementation of this American law in Canada, imposed under threat of economic sanctions by USA, the ‘witch hunt’ for Canadians born in USA begins officially this Canada Day.
I feel sorry for the tens of thousands of Canadians who still have no clue about FATCA, and no clue that USA considers them delinquent US tax filers, simply because place of birth on their Canadian passport is USA. These unfortunate Canadians with ‘US persons’ status, will not even know WHY ‘the nice lady at the bank’ is asking them where they were born, and may innocently answer ‘USA’ without realizing that they have just marked themselves “Reportable to the IRS.” Their first clue that something is really wrong, may not be until they get a penalty notice in the mail from the IRS for an amount exceeding the amount in their bank accounts. IRS will calculate penalties by comparing the FATCA reports sent from the banks(via CRA) to the IRS, to the ‘FOREIGN Bank Account Reports’ that US persons are supposed to be submitting every year to the Financial Crimes Enforcement Network, detailing their LOCAL bank accounts.
Expect some intense drama to unfold over the next year or so, as 10’s of thousands of Canadians wake up to a real life nightmare.
Thanks. I could have save my old eyes the exercise, if I’d been paying attention, lol!
@WhiteKat – great comment! I hope people wake up quick!!
@GWevil
Well written letter from the heart, easy to understand. I hope it gets people’s attention.
@ GwEvil
Comment done and into moderation.
@ WhiteKat
I like that angle you took and I warn you I might steal it in future comments.
@Em, please ‘steal’ whatever you like if it will help get the ‘job’ done. We’re all in this fight together.
A remedy could be revising the Canada-U.S. tax treaty. This treaty covering all matters of taxation between citizens of Canada and the U.S., by not saying otherwise, is equivalent of the Canadian government saying ok to double taxation. The treaty could have lots of exemptions such as for accidental US persons, family home, life insurance, pension, etc. etc.
@JC, interesting point, and one which has been raised here before I think by GeorgeIII.
However, even if USA never had citizenship based taxation, wouldn’t we still need a tax treaty to negotiate disputes over who gets to tax what, for example, in such cases where a resident and citizen of one country collects government benefits from another?
Correct me if I am wrong, but doesn’t the tax treaty clarify that CPPC is not taxable by USA for a resident in USA, just as Social Security is not taxable by CRA for a resident in Canada?
JC, Right on.
Revising the Canada-U.S. tax treaty NOW. Common sense. Do it NOW. Put the brakes on the insanity.
What do you think, would the U.S. negotiate this for every country it is now assaulting?
Sorry GwEvil
Looks like my comment may not come out of moderation. Give me an idea of what I should delete and I’ll try again tomorrow.
Thank you Gwen D. for your letter. FATCA implementation was smuggled into Canada in a hidden panel in the luggage compartment of another of Harper’s omni-buses. It needs to be hauled out and exposed for what it is — Canadian government approval for a US witch hunt for anyone with a US connection (no matter how minuscule) and for a massive data transfer to the USA of private, sensitive, financial information about individuals who are Canadian taxpayers. It will affect 1 to 4 million people in Canada — those the IRS deems to be “US persons for tax purposes” plus their family members and business associates with whom they share accounts. If anyone finds themselves in this targeted group they need to check out stopfatca.ca and consider making a donation to ensure this litigation to challenge the Canadian government on FATCA goes ahead. Thank goodness the Alliance for the Defence of Canadian Sovereignty recognizes the importance of privacy and the value of a nation’s sovereignty.
This thread had me doing a little research on the Canada-US tax treaty where I stumbled across this link that includes a segment from CBC’s “The Current” that may take more than a few of us down memory lane. It was recorded the day before the 2011 OVDI closed, and features at least one character familiar to Brock.
http://www.uscanadataxtreaty.com/
@Em – it may be that the paper is so small that they have limited hours/staff. Or…if it doesn’t show up by tomorrow, maybe take out the request for a donation. Allowing that might be against their policy.
@ GwEvil
O.K. Will do.
GwEvil and I recently spoke to a professional fundraiser for advice on how to communicate our story to the public.
She emphasized that community newspapers are a great source for good communication and that local newspapers should not be ignored.
Could more people follow GwEvil’s example in the Beach Metro News and continue to post letters and articles in your community newspapers?
Wouldn’t it be great if Homelanders could send op-eds to their local papers about how the USG has limited their global mobility by taking away their financial freedom via FATCA.
– Difficulty setting up businesses abroad
– Opening bank accounts abroad
– Foreigners won’t partner with US citizens to invest in small businesses because they don’t want any of their private financial data available to the IRS
– Can’t take advantage of tax efficient advantages abroad for retirement to offset high overseas taxation
– Double taxation because the USG doesn’t recognise high oversea Social Insurance Contributions is really another form of taxation
– Passive income (example your pension) isn’t included in the Foreign Income Exclusion
– 3-4% Obamacare investment tax which you receive ZERO if you pay it
– Always liable in future to the whims of the IRS / US Congress who can change the definition of US person or a Reportable Account anytime in the future.
– American abroad left open to blackmail because foreigners know they can report you to the IRS
– Your personal security has been compromised by FFIs using third parties to handle FATCA data which could be sold or given to terrorist groups
This is what the US Congress and President Obama have done to all US citizens worldwide. Effectively putting a virtual noose around our necks to trap everyone in the US Tax system.
Renunciations will soar as more and more people become aware of this problem.
Great letter, GwEvil! You told it like it is! May your words reap rewards, both in funds for the lawsuit and in more people becoming aware of what is happening.
@WhiteCat
I did not suggest getting rid of the Canada-U.S. tax treaty but to have a go at getting it revised.
The treaty is quite important for Americans abroad and it helps limit double taxation, but it does not prevent double taxation. The Canada-U.S. tax treaty does not limit the U.S. government, as much as it could, in the U.S. pretense that Canada is sovereign territory of the U.S. in regards to taxation of pensions etc.
So then can there be some coordinated plan at having a go at getting this treaty revised?
What is the status of the US / Canada Tax Treaty — does the IGA over-ride?
It was my understanding that the IGA does over ride the tax treaty.
For which there should be repercussions as Treasury has NO authority to negotiate with sovereign nations tax treaties and this fact does form the basis for one of the issues James Bopp is litigating against FATCA.
Ergo, our people had no authority to deal with them and it should be that if one is dealing with an illegal entity all deals are OFF.
But then that would make sense , now wouldn’t it!
As far as illegalities are concerned , lets see how Mr. Koskinen is looking lately. His visits in front of the congressional committee is not going well and now it has been revealed that he was less than forthcoming with congress and Congressman Ryan stated ” I do not believe you” … well no one does. Nor do they believe anyone about what actually went on. NOW it is revealed that they have been sending on personal data and information including financial to the FBI so that they can criminalize politics. If they can do this to folks within the borders, what is to prevent them from doing whatever to any poor soul in their sights? For the ruling that Americans abroad have NO constitutional rights ( According to the judge) means they can do what they want and there will be no congressional hearings for them.
BUT our government COULD have done something to protect Citizens here and those who are here legally who reside here long term. But they didn’t.
When you see what is happening on the southern US border and you know what has happened here it all makes it clear just what is afoot.
@calgary411
Your question about does the IGA over-ride the Canadian-U.S. tax treaty is a very good one.
I am not a legal/tax expert but I am definitely getting double taxed. So here is my view of it:
The IGA between the U.S. and Canada helps facilitate FATCA requirements of financial firms reporting Canadian account information on all US Persons. The IGA then also makes it Canadian law for these financial firms to report on US Persons. And it helps override any Canadian privacy laws.
The Canada-US tax treaty is currently completely separate from FATCA/IGA. As a US Person you are supposed to file a U.S. tax return every year (unless your income is something like below $7,000) and you are supposed to report FIBAR and 8938 on all your “foreign accounts” if those accounts are above the minimum thresholds. FATCA/IGA will soon get Canadian financial institutions to accumulate the financial information on US Persons that will end up in the hands of the IRS. The IRS will then match U.S. tax return, FIBAR reports, and 8938 information with the information from the Canadian financial institutions.
All those accidental US persons and others who have gotten away with not filing US tax returns, not sending in FIBAR, not doing 8938, all these persons will be “smoked out” with the help of the Canadian government and Canadian financial institutions, who will effectively bring the IRS to the home of every Canadian US person. The IRS will ask why all the above has not been reported, and perhaps this will be by way of notification with demand to pay very large noncompliance penalty for non FIBAR filing and back taxes.
The Canadian-US tax treaty comes into play when a person is filing both Canadian and US tax returns. The treaty acts to reduce double taxation. For instance, earned income. You earn income in Canada and Canada taxes this income. The treaty then allows you credit against the US return on taxes paid in Canada on your earned income. The Canadian tax is more than the US tax, so no US tax is owed on your earned income.
Here are the unfair problems with the tax treaty:
* The tax treaty treat every tax independently. For instance, earned income is its own silo, dividends are their own silo, capital gains is its own silo, pension fund is its own silo. So the Canadian tax for earned income is way higher than the US tax but you can not use that excess credit against other taxes the US has that Canada does not have.
* Pension funds. The tax treaty does not have exemptions for Canadian pension funds. I believe it is if you are not a “high earner” (make less than $105,000 per year) then the US wants to tax withdraws at the US marginal rate. If you are a “High earner” the the US would not tax withdrawals but will tax the gain in value of the pension fund over the year at the U.S. marginal rate as ordinary income. So there is no credit for Canadian tax paid. And while you may think the US earned income exclusion applies, no it does not as in determining the tax for your pension, the earned income gets added to the gain in value of the pension fund to arrive at the marginal US tax you owe.
*US death tax, capital gain on sale of home. If Canada does not have these then the tax treaty allows these taxes to sail right through and apply and then there is no credit for any of this tax paid to the US against taxes paid in Canada. Plus if the breadwinner dies then potentially all the assets that for a Canadian only person goes to supporting the spouse and family, these potentially get substantially taxed including pension, life insurance, family home, etc. All get ripped out from the surviving family. So then where is the Canadian government in all this to protect Canadian families against the US? And uphold Canadian’s rights to life, liberty, and the pursuit of happiness?
*Often the best tax deals offered by each country for its residents are cancelled out by the other country.
*It is very unfair for the families of a US person especially if they are the main breadwinner. The U.S. has something called a marital deduction that if someone dies unexpectedly (perhaps earlier than normal life expectancy) then in the U.S. most all the assets get passed to the spouse tax free. However, if the spouse is a nonUS citizen, this marital deduction does not apply. There is something like a $650,000 exemption then the US death tax applies – unless the money is put into a QDOT with a US financial institution – and any income distributions then get taxed as normal US tax but any principal attracts the 40% death tax.
*Even if a US person does not owe any US tax, all the reporting and the tax returns are a serious drain of time and tax advice expense, that I believe represents in itself a substantial double taxation.
All of the above prompted the formation of the Issac Brock Society.
This is why I have asked for update of the Canadian-US tax treaty to exclude the family home, life insurance, pensions, and other substantial exclusions for Canadian residents. Once these exclusions are in the treaty, then by US agreement then it would be hands off USA. As these exclusions are not in the tax treaty which the Canadian government signed, then it amounts to the Canadian government approval of double taxation of Canadian residents who happen to be US persons. My view of this is that it represents the Canadian government ceding some of its sovereignty to the US government.
MODERATOR: May we please have a strand on revision of the Canadian-US tax treaty.
Those are great points, JC, but the US unable to take a poke in the eye from those Canadians who attempt to flout US tax law by hiding behind the treaty will probably seek to overturn the clause that says that the CRA will not collect from a Canadian citizen on behalf of the IRS. Knowing our current Canadian government they’ll capitulate.
GwEvil: great piece. I agree we should all be writing similar letter.
JC: you should be a tax lawyer. I know about the taxing of capital gains on principle residence in Canada (actually that is my main reason I renounced but there are a dozen other ones). But I did not know about the death tax. You say… “The U.S. has something called a marital deduction that if someone dies unexpectedly (perhaps earlier than normal life expectancy) then in the U.S. most all the assets get passed to the spouse tax free. However, if the spouse is a nonUS citizen, this marital deduction does not apply.” My wife is Canadian! Glad I am out!!
@bubblebustin The point is the existing tax treaty may not be hidden behind and kind of permits the U.S. to double tax Canadians. The IRS does not want the CRA to collect taxes, the IRS wants the payments direct. A treaty that would allow exemption to many so that they really may hide behind it, with the Canadian government on their side, would be good.