NB: CALLING ALL EU BROCKERS
I am looking for known contacts in Budapest, Bratislava, South Tyrol, Burgenland & Vienna. Interested in local information only. Complete confidentiality assured. If you know someone, please email me at nobledreamer16 at gmail dot com
Hamilton, ON L8P 0A1 MAP
Why am I getting letters from my bank all of a sudden?
The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.
What individuals are U.S. taxpayers? Who is a U.S. citizen?
There are individuals that the U.S. government would define as “U.S. citizens” who:
- do NOT agree that they are U.S. citizens because they have performed a “relinquishing act” under applicable U.S. laws;
- do NOT even know that they may be U.S. citizens because they have never lived in the United States
- are citizens and residents of countries that do NOT allow multiple citizenships
To put it another way: one’s status as a U.S. citizen is NOT always clear.
I have never heard of these requirements! What determines the income that must be reported to the IRS? What “Information Returns” are required to be reported to the IRS?
- FBAR (Now called FinCen 114)
- FATCA 8938 – Report of Specified Foreign Assets
- 5471 – Information return for Foreign Corporation
- 3520 – Information return for a “Foreign Trust”
- 3520A – related to the 3520
I am only a snowbird! Why does this affect me?
- Substantial Presence Test
- Form 8840 Closer Connection Exception Statement for Aliens
- Caution: Streamlined Programs & 35 day rule – Catch 22
What are the ways I can become compliant?
- Offshore Voluntary Disclosure Program – AKA “OVDP – Not appropriate for the vast majority of people
- Streamlined Compliance – A pre-packaged way to “clean up” past compliance problems
- Obeying the law – filing amended tax returns outside the “IRS Created” programs
- Delinquent FBAR Submission Procedures
What costs are involved in renouncing U.S. citizenship?
- The costs of a total of 6 years (5 years prior the year of renuncation plus the year of renunciation) of tax compliance and information returns
- The cost of any back taxes and penalties
- A $2350 administrative fee
- possibility of having to pay an “Exit Tax” (which can be the biggest problem)
WHO: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
Hope to see you, your families & friends. Spread the word!
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.
If I fell into a group that describes you as a U.S. person and it was only my admission and not a proven paper trail fact, and I planned to never claim any rights under U.S. law and in fact did not ever want to live or work in the U.S., I’d omit any U.S.History from my narrative.
If visiting the U.S. I’d swear I had no ancestors from the U.S. and was slightly angry about being asked such a stupid question. Just a visitor and feel sorry for any U.S. Person living abroad who has to comply with the hunting expedition the congress has put all Government Employees on. Any question you’re asked just reply no or I don’t know—-I was abandoned on an orphanage’s steps and my name was pulled from a hat in a maternity ward in the country of my citizenship.
I know this is dishonest, but they shouldn’t have passed such a stupid law, one of the many laws and regulations that will be the reason for the demise of the ”Last Best Hope Of Mankind” pray God, ”Help us get rid of these stupid politicians”, all tools of what Jefferson described as the ”Mobocracy”.
Or in other terms. If a foreign country claims you as a citizen just say no.?
We tell our kids to just say no but as adults we forget that lesson.!
Ironically, the friend who first alerted me to this nightmare over three years ago when he e-mailed me a Financial Post article has received the US person letter from TD, but I haven’t. He and I have the same TD branch.
He received a “Dear Valued Customer” letter in August because he has a US $ Visa for which he uses a relative’s snowbird Florida address. He was born in Canada to Canadian parents and is retired from the Canadian Air Force. He is not a snowbird and does not have a substantial presence in the US.
He did not reply to TD in the time period they gave him. In ear;y November, TD sent a follow up “Dear Valued Customer” letter advising him his account is now considered to be reportable to CRA for passing on to IRS. They have advised he can still submit proper documentation and/or valid identification.
I hope he does this soon. Personally, I am leaving TD for my new credit union.
Blaze. Think how wonderful it would be if the IRS were to be inundated with bogus reports. They are already overwhelmed.
Here is a list of a couple hundred thousand names, Canadians who “MIGHT” or “MIGHT NOT” be US Persons. Most refused to answer questions about US personhood, so there are no social security or identifications numbers included. They all have US indicia, mostly just funny accents so we assumed they belong to you. Go get em, or not.
No letters and my US heritage is fairly well known at my bank. However, so was my intent to shed it upon taking Canadian citizenship and though I have not been asked to prove this, it’s not been questioned. My word is apparently enough.
The banks with major US entanglements seem to be the ones to avoid.
@YogaGirl “My word is apparently enough.”
As it rightly should.
An advisor at BDO mentioned several times at a meeting yesterday that if the bank/financial institution is asking for your TIN/SSN, it is a sure sign the account has been flagged for US indicia and is intended to be reported as a US account.
One advisor indicated they have seen NO FBAR penalties levied on their clients. I asked if I had heard her correctly and she repeated the statement. They have however, seen penalties regarding 5471. I did not think to ask if that was for non-filing or accuracy penalties.
When asked about verification of citizenship, she indicated if a client has only one citizenship, obviously not an issue. For other situations, the clients are referred to an immigration lawyer.
She indicated that institutions will ask the US Person question for all new accounts, even if would seem obvious would not qualify, due to fact an account could grow over $50k during the year.
She seemed less than confident about the protection the CDN govt will offer to those who were CDN citizens at the time tax incurred (over time….). She said even though the original intent to close accounts for those who were recalcitrant had been lifted, it is still in the IGA that accounts can b closed.
Advice for those who are noncompliant-it will probably take a couple of years before FATCA really kicks in but once it does, we can KISS THE STREAMLINED PROGRAM GOODBYE.
This was NOT the Info Session Meeting in Toronto with John Richardson & Phil Hodgen.
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