— U.S. Citizen Abroad (@USCitizenAbroad) October 13, 2014
The article referenced in the above tweet includes:
Fraud isn’t the law’s only unintended consequence. FATCA has also spawned a booming business for cross-border accountants in Canada, which is home to hundreds of thousands of U.S. citizens. Most Americans living here owe no U.S. taxes because Canadian taxes are generally higher. Many, however, have never filed or stopped filing years ago, and now risk being exposed by FATCA’s net.
The threat is forcing many Americans out of the shadows and into the offices of accountants licensed to do U.S. taxes. With demand brisk and supply of experts limited, some individuals report being charged as much as $4,000 a year to do relatively straightforward U.S. taxes – filings that would typically cost less than $1,000 in the United States. An individual who hasn’t filed for years can easily face tens of thousands of dollars in accounting fees to come clean, even if they owe no U.S. taxes.
Given that roughly 7 million Americans live outside the United States, FATCA is an accountant’s dream.
FATCA is also proving to be extremely costly to most financial institutions. In a recent speech, the head of a U.S. umbrella organization for banks, brokers and asset managers said his industry is facing compliance costs that could eclipse the IRS’s $11-billion (U.S.) annual budget.
There is no new information in this article. The “FATCA effects” described are old, well known, and well worn. At what point does “FATCA damage” evolve from “collateral damage” to intentional damage.
The #FATCA is that this damage is NOW willful!
Here is the first comment to this article from a certain JCDoubleTaxed:
JCDouble Taxed 21 minutes ago
FATCA is very significant in that the US forced Canada under threat of being banned from the global banking system, to adapt FATCA as part of Canadian law in the form of an IGA agreement. In the process, the US forced Canada to disregard Charter Rights and privacy laws of Canadian citizens, and adapt institutionalised financial discrimination of Canadian residents who happen to have US citizenship.
Such institutionalised discrimination – asking ALL account holders if they have US citizenship or not – and potentially confiscating 30% of an account value without appeal mechanism, and without any relation to if they owe US tax or not, if a US Person answers that they are not a US Person; such discrimination has similarities to the institutionalised financial discrimination of Jews in preWorld War II Germany. You heard this right, the US has become a totalitarian state in regards to its US persons abroad!
Part of it all is that the US is the only country in the OECD that practices citizenship based taxation – taxation rights based on citizenship rather than by country of tax residence. Picture a Canadian living in Canada for 50 years, the US wants to tax them. Picture a mother brought to a US hospital for a birth because of a strike in the Canadian border area – this US person for a few days, the US wants to tax them for life. Canadian FATCA IGA laws will now smoke these US persons out and force the CRA to hand over their account information to the US IRS.
There is a tax treaty that helps reduce double taxation but it does not prevent it. Often there are taxes that the US has that Canada does not and then these just flow on top. It gets worse. Many tax deferred accounts that Canada has such as for retirement, education, and disability, the US does not recognise as they are not allowed in the US and the US wants to tax unrealised gains and to penalise them so that there is no benefit to them. Do these sound like accounts of US tax cheats?
Canada has not defended the rights of the roughly 1 million Canadians who are US persons to live a normal life in Canada. Canada has let the laws of the US sweep over the border without opposition. Is then Canada an independent country or the 51st state?
Any taxes the US collects from Canadians do not go back into services for them such as road, hospitals, schools, etc. “Taxation without representation and without government services or benefits is tyranny.” The US becoming more totalitarian, where the freedom and well being of its citizens does not even enter into the equation.
Where the Canadian Government has allowed these US laws to flow across the border and become the laws of Canada, The Alliance for the Defence for Canadian Sovereignty (ADCS) opposes these laws though legal claim to uphold and defend Canadian Charter Rights. ADCS is accepting donations for their fight. See the message boards at IsaacBrocksociety dot ca for more information.