Liberty and justice for all United States persons abroad

The Isaac Brock Society

Posted on by Posted in Issues regarding US persons abroad 169 Comments

Originally, my understanding was that existing customers would not be signaled under FATCA regulations unless their accounts were over $50,000. Yesterday, I spoke with a woman whose accounts never exceed $10,000 in aggregate. Furthermore, she is a young mother who hasn’t worked much in the last few years since coming to Canada, and so she has never had an IRS tax liability, as her income would be well below the Foreign Earned Income Exemption. She holds her accounts jointly with her Canadian-only husband. This case highlights why we need the legal action of ADSC.

Yesterday she received the following correspondence from her bank.  It shows that they have determined that she has US indicia. They have threatened her with reporting her accounts to the CRA in violation of section 8 of the Canadian Charter of Rights, which would require the CRA to obtain a warrant before seizing her account information. But now the TD Bank has threatened to transfer her account information to the CRA. But what crime has she committed that the TD has threatened this action? None at all.

I have recommended that she do nothing–not fill out the self-certification form. But I’d like to hear what others think. Please discuss.



Here is the self-certification form. Please note the date at the bottom: June 9, 2014.

169 thoughts on “Is TD Bank overzealously ferreting out US persons?”

  1. From the information provided in this post, it sounds unlikely that she has a CLN. Given that, she can’t very well sign a self-certification form that says she isn’t a US person for US tax purposes, because under US law (with a US birthplace and without a CLN) she is a US person for US tax purposes unless she has a CLN (since I gather she has a US birthplace). Hence signing the form would be “uttering a false document” which is a criminal offence (in both Canada and the US and, AFAIK, one that can result in extradition if the US were to pursue that course; I personally know of a Canadian who was extradited to Canada about 20 years ago from the US for having uttered false documents to CRA, so I know extradition has worked in the other direction in a tax case). However I’m not a lawyer and any determination of whether that still is an extraditable offense would need legal advice.

    I concur with Petros’ advice that she NOT sign the self-certification form, for the above reasons. But I think if she has any doubt as to what to do, she should get competent legal advice (which I can’t provide, nor AFAIK can Petros).

  2. Well, the other question I have is whether her account information will indeed be sent to the CRA for transfer to the IRS, when in fact her accounts balances in aggregate are so low? What possible justification for this kind invasion could there be? Did the IGA actually include this kind of trivial account balances be sent to the IRS?

  4. I agree with Schubert and Petros regarding the self certification form. At some time she may wish to ditch U.S. personhood and get a CLN. She may not be ready for that step right now.

    I’m guessing that TD has done a data search of its accounts and is sending letters to anyone with clear U.S. .indicia. They likely haven’t looked at account balances yet as they don’t have to do that till after December 31.

    Many suspect that the $50,000 guideline will be ignored by some FIs, but I don’t think the letter indicates, just yet, what TD will do.

  5. I have been saying for a long time that banks and investment houses are NOT going to go by those thresholds. In fact it was Deloitte who stated they wouldn’t bother with them and some banks said it was too much trouble to look for ALL U.S. persons every year and then on top of that find the ones that met the threshold balances. So they indicated they would just report them all. One place I read there was mention of the fact that they felt the software would have to be more costly and two tiered in order to bother with the threshold balances. It would make sense for them to just report everyone and let treasury and IRS sift through to find those with the higher balances. So even if you did not meet the thresholds to have to file FBARs and the rest you will probably still have your banking data go to treasury and IRS anyway.

  6. If this makes you as sick to your stomach as it makes me to mine, donate, donate, donate to http://www.adcs-adsc.ca/.

    And, we all must decide what we will do *when* we receive such correspondence from our local Canadian (or any other country) *foreign financial institution*. Make it even easier on yourselves, Canadian foreign financial institutions — just turn over the private financial account information of ALL Canadians to a foreign country. Why should Canadians have any such rights afforded by the Charter of Rights and Freedoms and other Canadian laws?

    Donate.

  7. Peter,

    My response to your post has been to pass this information immediately on to the Arvay team with comment.

    I suspect that this info will be helpful.

    [Everyone, please remember to keep donating to keep our lawsuit alive.]

    Stephen

  8. My previous comments fit this post exactly.

    I’ve been trying different ways to explain FATCA to people not familiar with the situation and thought about the bank’s approach to the FATCA data witch hunt.

    FATCA Data Process

    The Bank charges you with the criminal offence of being a ‘US Person.’
    The bank’s prosecutors send you a ‘self certification’ form to defend yourself.
    If found guilty, your sentence is your private financial data goes to the IRS.
    If you don’t defend yourself, you’re automatically convicted in absentia and your sentence again is your private financial data goes to the IRS.
    The bank acts as judge, jury, and executioner.
    You have no right of appeal.

    I think this pretty much sums up the FFIs process to data collection.

  9. One answer is to close accounts at TD. Then go to credit unions to open accounts.

    Local credit unions with small total assets are totally exempt. Larger credit unions with Local Client Based classification only report on member accounts held by non-Canadian residents. Do your homework before opening an account anywhere.

    Of course the best solution is to proceed with and win the lawsuit against enforcement of FATCA in Canada.

  11. Larger credit unions with Local Client Based classification only report on member accounts held by non-Canadian residents. Do your homework before opening an account anywhere.

    MORE ON THIS PLEASE.

  12. It would seem that TD’s decided to error on the side of caution on two fronts, that is with detection and over-reporting. It’s not over reporting if TD allows the customer to cure herself of indicia, it it?

  13. Currently, TD is focusing on existing clients with known US indicia, and new clients. I imagine that at some point they will be querying ALL existing clients on their ‘US personhood’ and asking for similar self-certification. If you don’t self-certify or falsify documentation, you may be presumed to be a ‘US person’ by default. This fits right in with Don’s ‘FATCA Data Process’ (aka witchhunt). So much for ‘don’t ask don’t tell’.

  14. I agree with @Joe Smith. I have a US birthplace too, no CLN, and have not yet been presented with such a document by my bank (RBC) but I do anticipate that day may come (hopefully it won’t).

    I will choose if and when necessary to defend the position that my relinquishing act was not required by law to be documented with the US at the time and thus I have no CLN. When required, I may offer all of the “proof” of my relinquishing act instead of a CLN. (By the way, I’ve been in Canada since 3 months old, born in the US to two Canadian parents).

    I have a relinquishing act committed in 1985. I also am not going to pursue a CLN yet because it sounds like at present there is an absence of clear guidelines for how staff determines who “qualifies” for a CLN. There is too much room for their subjective opinion as to my “intent” at the time, and I do not want to subject myself to the interpretation, mood, or otherwise of some consulate employee on any given day.

    The TD form this person was issued claims regulations require a W-8BEN form, AND a Certificate of Loss of Nationality. Now, I am not so familiar with what the nitty gritty details of the IGA, but does it specifically state somewhere that a CLN is required to be shown at banks to prove we are not US citizens? Or is that an indication of the TD bank going over-zealous with clients and playing more nicely with the US than it does with it’s own Canadian citizens?

  18. I suggest this person and their spouse:

    1) Do not respond to the TD forms. Do not sign anything.

    2) Open account(s) at local credit union using non-birthmarked ID such as drivers license, Canadian SI card, Canadian citizenship card, or Provincial Health Card (where allowed – not allowed to use OHIP card for bank acct. ID in Ontario).

    3) Close all TD accounts and take as bank draft

    4) Deposit draft in new Credit Union Acct.

    5) Tell TD EXACTLY why account was closed and document all interaction.

    6) Contribute info to ADCS – if possible along with a donation as well 😉

    7) Encourage EVERYONE in their circle of influence to switch from TD Bank to credit unions.

    I’ve been with a credit union for decades: the personalized service, low fees and sense of community is terrific. Zero comments from them regarding FATCA; but I’ve never brought it up.

  20. By the way…

    Had my financial advisor over the other day. Took out a new investment. There was a section about US citizenship on the application form to which I checked “no”, I was not a US citizen after verbally explaining that I relinquished long ago, and have no CLN because I was not required to obtain one in 1985. He accepted that info a we went merrily along our way–me, a Canadian Citizen only.

  24. Any credit unions anywhere in Canada that offer RDSPs AND accept out-of-province account holders?

    i.e., VanCity says:

    Unfortunately, we cannot offer membership outside British Columbia.

  25. I figured that TD would be over zealous in their *US Person* hunt. Compared to other banks in Canada… they have the biggest presence in the US… when I was in NY… they were more branches of TD then they were of McDonalds… If u don’t sign… they will turn the info over… Also realize they will require u to update the form every few years… My other q is… even if u close the account now… would they release the info to CRA to pass on as a show they are doing what is needed? I live in an area in Quebec that leaves very little choice in banking options. I am joint with elderly US persons in Canada… who all want bank books and demands to use a big bank… So I have no clue how I will deal with this situation yet… Thank u for sharing this…

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