As you know, I refused to fill out a W-8BEN for Scotia iTrade. First, I received a letter. Since then, I missed a phone call which I never returned. And now I’ve received at least two e-mails.
This video, with numerous screen shots from the Isaac Brock Society, explains why refusing to fill out bank paperwork increases the compliance cost for the bank, and effectively thwarts efforts of the banks to come into compliance with FATCA regulations.
Congratulations to the Isaac Brock Society!
@ Hayden Perryman
Thank you much for participation in these discussions!
RE the ADCS Charter Challenge to Canada’s FATCA IGA, here is my “elevator pitch”:
Regardless of your focus as a FATCA expert, I urge you to support this suit. It is potentially historic. It is crowd-funded and open-source.And it may redefine concepts of national sovereignty and the limits of US extra-jurisdictional reach.
This is the only statement of claim against a FATCA IGA in the world, and it’s led by Canada’s leading constitutional litigator, in a jurisdiction with an advanced concept of human rights.
Canada is the battleground state for the constitutional legality of FATCA IGA’s. A large number of Canadians’ only tie to the US is incidental birthplace. Also, Canada is probably the world’s leader in so-called “illicit undeclared offshore accounts held by US-persons”.
The case is plead as a human rights violation – discrimination based upon place of birth – not an economic or tax matter. Canada is home to hundreds of thousands of Canadians who have a US birthplace, but no economic nexus with the US: no residence, earnings, employment or physical presence. Some of aggrieved Canadians were born in the US due to medical referral. The plaintiffs in the case represent egregious examples of this.
How often does the opportunity to support this kind of action arise?
Haydon, why are the GATCA-adopters interested in birthplace?
All the GATCA signers are residence based taxation. It has no meaning.
It could only be for FATCA, non?
Otherwise, I made dumb sure that I got my savings out of USA. 25% of the assets of the retirement nest egg. Gone from USA. Like any other informed expat has done. Only my IRA is left in the jail, but I suppose I could work out a way to get that out when needed.
@Mark Twain. They want place of Birth for matching purposes. If they mandated TINs they would not need place of birth. Without the TIN they need place of birth as matching on name alone is very fuzzy.
It’s all about making sure they can target the person who has been reported.
I don’t endorse this – I’m only explaining why they want it.
Regarding ‘place of birth match’, that won’t work for a woman who took on her husband’s last name. And for those who kept their maiden name, such as myself, it might be time to think about making a switch.
@WhiteKat I had not thought of that. I’ve heard of American boyfriends being dumped by their non American girlfriends because of FATCA, but this is a new twist!
Hayden,
I meant switch from maiden name to spouse’s name, not switch the spouse. 🙂
That way, any attempt at matching last name/place of birth from FATCA reports to US birth certificate data would fail.
@WhiteKat Understood. It’s going to be Orwellian when the CRS start capturing TINs.
Haydon-
Love your podcasts!
I am single, and refuse to date American women.
@Haydon, from the Canada Revenue Agency CRA. This makes it very clear by the Government of Canada that asking POB is not a requirement of the IGA or the implimentation agreement.
“Will my financial institution ask me if I was born in the U.S.?
A financial institution does not have to ask its account holders about their place of birth.”
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html
Some may remember how in this report Uncle Carl kicked up a stink about how FATCA would fail to hit it’s intended target:
OFFSHORE TAX EVASION: The Effort to Collect Unpaid Taxes on Billions Hidden in Offshore Accounts”
http://www.acfcs.org/wp-content/uploads/2014/02/REPORT-OFFSHORE-TAX-EVASION-Feb-26-2014.pdf
…and noted by Virginia La Torre Jeker as “the best read of all” in the report was his recommendations on how to avoid FATCA altogether:
“FATCA Reporting Thresholds Can Be Manipulated –
With respect to individuals, FATCA reporting is required for accounts only if the balance in the account exceeds $50,000 at any time during the calendar year. For legal entities, the figure is raised to $250,000. The Report notes that US persons could create multiple low-value accounts and simply evade FATCA reporting. However, the general consensus seems to be that this criticism really amounts to a tempest in a teapot. Realistically, how many US tax evaders will go through such trouble to split millions of undeclared funds into such small denominations within so many bank accounts? For any nefarious readers of my blog — for all your tax planning needs –more information about this “loophole” can be found on page 172 of the Report.
Lack of Information Sharing and Aggregation of Accounts Among Financial Institutions –
Here’s another FATCA avoidance strategy: FATCA requires non-US institutions only to aggregate accounts held by the same person for reporting purposes. It does not provide any mechanism for aggregating accounts held by the same person at multiple financial institutions (nor, might I add, does it require any information sharing among institutions). “A US couple living abroad could maintain three accounts at three banks… together exceeding $1 million, yet legally avoid all FATCA reporting,” the Report provides. I say, this sounds like another tempest in a teapot. FATCA is costing billions of dollars to implement; it is wreaking havoc on the lives of many Americans living overseas. Is the referred “US couple living abroad” worth such a fuss? More information about this loophole can be found on page 172-173 of the Report.
Use of Offshore Shell Corporations –
Another avoidance strategy arises due to various presumptions created by the Treasury Regulations implementing FATCA. Due to the interplay of a series of provisions in the regulations, the Report maintains that their combined effect creates a big fat(CA) loophole that may enable many offshore accounts opened by offshore shell corporations beneficially owned by US persons, to avoid FATCA reporting obligations. Frankly, I had difficulty following the tangled web set out in the Report on this issue. Anyone wishing to untangle that big fat(CA) web should refer to page 173 of the Report.
A big fat(CA) thank you to all those responsible for detailing this wonderful road map to FATCA avoidance!”
http://blogs.angloinfo.com/us-tax/2014/03/17/how-to-avoid-fatca-tips-from-us-senate-subcommittee/
@Orwell. Interesting – no one has expressed an interest in the podcasts – I was thinking about only doing the video clips going forward.
The videos clips take ages though!
@George. Yes, the Candian Inter Governmental Agreement is clear. I guess I’m seeing this through a CRS lense. I think PoB will vanish if a ITIN is provided.
@Bubblebustin A true tax avoided could find their way through FATCA as easily as water finds its way through a colander.
@Haydon
Is this where we get into the semantics of distinguishing tax avoiders from tax evaders?
Tax avoidance: legal
Tax evasion: Illegal
True, true, true. Here in the UK we are beginning to treat tax avioders as pariahs. Yes, absolutely.
I’ve become unaccustomed to those who know the difference.
Tax avoidance is legal, tax evasion is illegal.
I’m not always right and I do make mistakes.
We can be a tough audience, Haydon, lol! It bothers me how avoidance has now become synonymous with evasion, as most countries tax codes encourage avoidance as a means of keeping what’s already ours – and should never be viewed as wrong!
@Bubblebustin Yes. All true.
@Bubbles, “It bothers me how avoidance has now become synonymous with evasion”
It bothers me that a British Citizen (with a US Place of Birth, but carries solely a UK Passport) who is a long time resident in Newcastle, who has his current account on the High Street two miles from his flat with Halifax Bank, a stakeholder pension plan with a UK employer, an ISA with the Newcastle Building Society and files an annual self assessment return with HM Revenue and Custom can be considered as guilty of evasion/avoidance of anything!!!
Said person is hiding NOTHING!!!
That’s because, as we all are painfully aware, George – and as the NTA hopes to change the perception of – offshore us not synonymous with bad!
@Haydon, just a shout out and thanks for your honesty. I/we have seen too many people in the compliance side of the house who take the attitude that this is still a delicious milk shake even though it has a little bit of rat droppings in it.
Its a pleasure to see someone who may still call it a milk shake but soundly agrees a milk shake with rat droppings is not delicious at all.
Long term, the US system of CBT does not and can not work in the 21st Century especially in light of the OECD standard. The rest of the OECD in time will realize the large sucking sound is the USA attacking the tax base of the UK, France, Greece, Ireland…… The USA wants all of the pie and does not want to share it.
Though still only the cry of an infant, there are early rumblings in the Labour Party to enact some form of CBT.
In the end, worldwide CBT will cost the USA as it is the nation of immigrants and the rest of the world is the sender of emigrants.
The US attempt to tax migrants anywhere in the EU will yield nothing, the EU is not a tax haven.
@George You are welcome. Thank you.
Thanks, Haydon Perryman. The conversation you have been having with George and others here has provided good information today. Thanks, Petros, for this thread — yes, we have missed your posts.
There must be more to it than that as date of birth is a far better disambiguater than place of birth. E.g. how many people with name John James Smith are there in the world? Now how many are there that were born in the US vs how many worldwide were born on, say, July 16, 1969? The former would have to significantly outnumber the latter.
tdott, You are correct of course – i.e that date of birth in combination with place of birth and name, narrows the search. But, don’t banks typically (pre-FATCA) record date of birth anyway when opening an account? In other words, place of birth is the missing link post-FATCA.
So that explains why the FATCA letters are unabashedly asking for birthplace and foreign passports. Not discriminating only Americans, discriminating against everybody.
They need to pretend not to discriminate in order to be able to discriminate.