This week I had a chat with a kind donor to our Canadian FATCA IGA lawsuit. She is a Canadian citizen who has lived in our country for more than four decades.
I asked her (as I now ask many) to predict what Canadians will do when the FATCA law identifies them and turns them over to a foreign country.
This Canadian told me how she will respond when her neighborhood bank turns her over to the United States Internal Revenue Service. She said:
“First time visitors to the “Isaac Brock” and “Maple Sandbox” websites are regularly advised to “Read, read, read before you take any action” when you discover that the IRS wants you.
Generally good advice, I would say, except that I would change the channel a bit and say “Read, read, read, and then take NO action“.
I would strongly urge people to read, read, read, and then take the time to live with the injustice, the absurdity, the absolute moral bankruptcy of FATCA before they commit themselves to any course of action.
Live with the feelings of unfairness and discrimination that surround FATCA; let the oppressiveness of the situation really take hold. Then take a deep breath, and another, let the fear subside, and then let the outrage and anger come forth and “Just say NO”.
We all know that the whole premise of FATCA (Citizenship-Based Taxation) is fundamentally wrong, so why do so many of us so readily agree to participate in a system that is “wrong”? Fear, anxiety, expediency, whatever?
When I am faced with a really complex situation that is impossible to figure out, and FATCA would be one of those, I try to pare things down to fundamental principles that let me see things more clearly. Really, in my mind, FATCA is no different from the scenario of the school yard bully.
The Harper Canadian Government should have stood up to the U.S. bully’s threat of sanctions and said “No”. It didn’t.
Canadian banks and financial institutions should have refused to become agents of the IRS. They didn’t.
Our Members of Parliament should have challenged the government to address issues of sovereignty, privacy, and equality of ALL Canadians. By and large, with a few notable exceptions, they didn’t.
So now it’s my turn; it’s my turn to stand up and say “No”. And I will.
I will refuse to fill out any “foreign” tax information forms, I will refuse to give my financial institutions any information on place of birth, and, if necessary, I will lie with an absolutely clear conscience.
I will refuse to let the bully play in my yard.
I realize that this is a course of action (or inaction) that might make some people feel uncomfortable. But, speaking personally, I feel much more uncomfortable being forced to do things that I know are wrong, and I know that FATCA is wrong.
It’s just wrong, plain and simple. So I’m not doing it.
I am now, and will remain, willfully non-compliant. End of story.”
@Tom
“the bank holding your mortgage can call it in (?) and foreclose on your house if they find you guilty of U.S. Personhood.”
Really? WWhere and how could mortgages be related to FATCA? I don’t think banks typically want to foreclose, it’s rather a hassle for them.
Is it immoral to lie to banks, governments, etc. in regards to FATCA? I guess you could compare it to a Jew living in Nazi Germany. Would it have been immoral to lie to the Nazis when they asked if you were a Jew so they could put you in a concentration camp? I don’t think so!
Am I the only one getting this thread confused with the harlot one?….the same line of conversation is happening in both posts.
@Yankee Boy, be careful comparing our situation to the Jews. It is upsetting to some Brockers and has generated long, long threads of ‘debate’ in the past. TD won’t be putting any of us in concentration camps, just comfy green chairs. Having said that, I agree with you 100%.
@ Yankee Boy
“Would it have been immoral to lie to the Nazis when they asked if you were a Jew so they could put you in a concentration camp? I don’t think so!”
Not immoral but still fraught with potential danger once the lie is discovered. Many Jews after lying to the Nazis would have then found a way to flee to another country or hide “underground” (sometimes literally underground in caves in the forest!!!) – – not so easy to do in this situation. Just be aware of, and prepared for, the consequences as being caught in this lie will be ever present……
@Tom – thank you. It is interesting that many of the Thai banks in Laos are listed as non FATCA when they are clearly FATCA registered in Thailand. Also, in Sri Lanka the Central Bank has said that Sri Lanka banks can comply with FATCA if they wish (via a direct agreement with the IRS) but that no IGA is currently in negotiations (i.e. it’s a pure FATCA compliance issue). It’s all very confusing.
@Jim Beam – with a non US place of birth and using a non US passport to open an account, you are under the radar so long as you don’t admit/self disclose (and to stay that way you will likely have to lie on a bank form as to other citizenship you hold besides German). Your risk is relatively low at this point. IF you were to disclose your accounts on a US tax return, and not yet been discovered by the bank as a US citizen, I would expect that the IRS will contact your bank sometime in the future and advise them you are a US Person and ask for reporting….that is my guess as to what may happen in year 2016.
I have been following Jim Beam in this thread. We can all think back to that moment when we started to realize all this BS with the IRS and Treasury may actually be real. The loss of innocence, as it were. I do believe someone like Jim Beam is likely safe as his birthplace does not betray him. Who knows….
Thank you guys for your inputs and opinions on this topic. It was a big woow moment when I first learned about all the FATCA and stuff. I also used to be pretty vocal about my US citizenship and proud to be member of US community. It is sad that now I rather keep being silent about it. I only use my american passport to travel to America. Otherwise the German passport gets me visa-free to more places than the American passport.
What do you guys think about people who are getting naturalized in the U.S. and then they go to live to their own native countries? Are they also those flying under the radar?
@Steve : What do you think that will happen in 2016 ?
@JimBeam, ” I also used to be pretty vocal about my US citizenship and proud to be member of US community.”
I am not vocal anymore and promptly correct anyone that calls me an American.
It won’t be too long before being called an American will feel more like an accusation.
It’s begun: FORMA-GEDDON
“As previously noted, the validity of non-U.S. approved self-certifications may be called into question because of language included in certain portions of the Intergovernmental Agreement (“IGA”) stating that the Foreign Financial Institution (“FFI”) may use a Form W-8/W-9 “or other similar agreed form” to document an account holder. The IRS has updated the FATCA General Frequently Asked Questions (“FAQs”) on its website to address this language and define what it considers to be “a similar agreed form”…
http://www.fsitaxposts.com/2014/10/21/irs-released-faqs-validity-non-u-s-approved-self-certifications/#comment-1617
@ Bubblebustin
“, , , being called an American will feel more like an accusation”
I think this has already begun. Over the years I have always denied being an American when people found out about my birthplace. Of course I didn’t know the US had given my citizenship back. Many of us here don’t want this label and it truly does feel like an accusation. I have always been glad that my parents left the US and that we did not grow up there.
@ Bubblebustin
Well, these FAQs about “non-u-s-approved-self-certifications are REALLY THICK to get through (I feel drowned in lawyer-speak / government-speak), but it sounds like even the locally-designed self-certifications will have to spell out all the potential punishments and signatures will be need to be known as being done under penalty of perjury if the information is found to not be true. So what is the penalty for perjury? Is that penalty of perjury in Canada or would you be extradited to face this judicial consequence in the US because you signed a form about a US law? Anyone else going crazy with this one?
@LM
Thanks for you effort to decipher this…you got way further than I did. I can’t put any of this in the greater context. I all sounds bad to me. Can’t these people even make things simple, or without a bogeyman around every corner? I know, dumb question…
Bubblebustin – – In simple terms, the psychologist in me thinks that anyone who writes such obscure, complicated text has a very very strong need to see themselves as intellectually beyond others, superior to others and in need of dominance over others (even in a narrow range of life). Seems to me that the IRS might attract that kind of person, don’t you agree? It would be interesting to see the handwriting of some of these folks……
When I took Canadian citizenship over 40 yrs ago, I distinctly remember the judge told me during my interview that if I took citizenship here, I would lose my US citizenship & I should think hard about that. He obviously didn’t think it was a good idea at the time. I love how the US wants so much to keep me, but the Mexican’s who come over in order to have their babies born there are not welcome. Hopefully, a change in US administration will clear all this mess up. One can hope.
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@JimBeam … I am in almost the exact same situation as you. I was born in …. to US parents, I a …. citizen, look like a …., sound like a …., identify with …. culture and I AM a …..! I thought it was merely a happy little bonus to also have a US passport, so many years ago I studied in the US and filed returns from US sourced income around that time, I was never made aware of any other tax obligation. I use my US passport to visit the US (as they will not allow me to travel to the US on my …. passport) I use my …. passport for ALL other travel. I learned about Citizen Based Taxation recently and could not believe it (neither could my accountant and lawyer). I thought I would have very little taxes to pay because of tax treaties but I was worried about fines and penalties. I have paid a s*#% load of money for legal advice from well known specialist law firm only to find according to the complex tax laws, (it’s very complicated) it is clear that I owe more in taxes then I can afford to pay, it would wipe out my income, my retirement, my home, everything. Yes double taxation, backdated, I have already paid full taxes in my country of birth/residence and do not get US tax credit for most of it because it does not qualify. I want to give up my citizenship and never set foot there again but I cannot renounce or relinquish because I can’t come into tax compliance without losing everything that I have worked my whole life to build. I am not one of the Super Rich but I have worked hard to ensure that I am not a burden to my family for tax payers for my retirement. What are my options? It feel like I don’t have any. I’m still trying to come to terms with it all, as you can imagine.
Reluctant Niece, I couldn’t read and not respond. I’m only married to a half-Merkin’…. (Canadian-born, lived here all his life, considers himself Canadian, does everything in Canada, nothing in the States, not even a passport) and we’re facing the same kind of soulsearching you are. It sucks.
I haven’t found any stories of anyone being fined by the IRS for FACTA or FBAR. I’ve read where people have voluntarily paid fines they believed they owed, but not a direct letter from the IRS stating they owned money.