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!
@All, asking country of birth does not aid in identification. Asking Place of Birth would aid identification. Country of birth does not narrow things much.
Thanks to Haydon I have now read the OECD Common Reporting Standard. Asking country of birth is only a requirement solely to the extent that host country allow already requires the collection of that information.
I would guess that in most of the West, asking country of birth is NOT a requirement in AML KYC.
To be honest, after reading the OECD CRS I have little problem with that as it is preventing individuals from hiding money outside their country of residence to avoid taxation.
The problem with FATCA is that the compliance cost far outweighs the amount of any revenue generated!! FATCA and CBT is punative in nature for leaving the homeland. OECD CRS is paying your fair share and is actually soft touch administratively.
And yes the hypocricy is grand with the USA not signing on to the OECD CRS.
I could understand the USA thumbing their nose at OECD if and only if FATCA was not on the table.
@Mark Twain, asking not place of birth but country of birth is solely a sop to the USA.
In much of the world citizenship is not obtained because you were lucky or unlucky to be born there!!
There are lots of babies born in the UK each day who are not UK Citizens!! Ditto with many other countries.
@calgary411. You are welcome and thank you.
About 2 hours from now they’ll be a new video posted on the same YouTube channel.
I know I will be hearing from some of you when that is out!
For green card holder in Canada especially people who do not plan to return (old expired green card and people who left the states more than a year ago/ The Canadain government say you are not US person for FACTA. I think the green card is invalid if you are out of the states for 1 year.
There is 2 things
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html
“I hold a U.S. green card. How does this affect my tax residency?
If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.
However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.”
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/fq-eng.html#q2-5
“IRS Publication 519 states that the U.S. domestic rules that determine if a non-U.S. citizen is a U.S. resident do not override tax treaty definitions of residency. If you are considered a resident of Canada and the U.S. under each country’s laws and the Canada–U.S. tax treaty considers you a resident of Canada, the U.S. has to treat you as a non-resident taxpayer and you should not identify yourself as a U.S. resident to your Canadian financial institution.”
I believe that the above rules can apply to US ex pat with CLN who have not completed the exit tax process. Just do not cross border. The IRS considers you a US person for tax purposes until you have done all the exit tax stuff.
You may want to do the w8ben but not own US assets, to be on safe side. Write on w8 ben that you do not want to own US assets because of exchange rate and other reason (dividend tax credit pain in the ass doing Canadian taxes). Brokerage have the ability to shut down your accounts at their discretion. Schubert once mentioned it. It should be noted that US stock market has outperformed Canadian stock market for a extremely long time.
Petros why do you not ask your lawyer friends if Computershare Canada (this is the transfer agent for most Canadian companies and provinces) send information to IRS? If you have actual shares in your hand (safety deposit box) the transfer agents pay dividends.
I think Computershares Canada is a wholly owned US subsidiary and info is stored in USA.
I agree we should all resist as much as possible. My middle finger is all they’ll get from me.
http://youtu.be/JvkRskvG0Ag
Regards,
Middle Finger
Thats too funny!
Well that was very therapeutic, Middle Finger. Middle finger is known as FATCA finger here, welcome!
Here’s one more for your viewing pleasure
Citizen Extraction
Part 1
Part 2
Unfortunately for those among us who have been labeled as so-called “US Persons”, the future is here right now and almost as dire.
Regards
Middle Finger
Maybe someone can offer thoughts on the following:
In an effort to become compliant by filing from now on, my choice is between
1/ filing 3 years of delinquent returns + 6 years of delinquent FBARs. Is this called “quiet disclosure”
2/ file going forward, i.e., file in 2015 for 2014, and wait and see.
I anticipate no owed taxes. I am small fish, though middle class. Dual citizen, living in highly taxed EU country, no business. Huge taxes.
I have decided to file before my bank “finds” me so when they do I can tell them I have filed and am compliant.
An accountant I contacted said the IRS doesn’t like “going forward”. My problem is that it is hard to get information for my FBARs dating back 6 years. It is possible to do, however.
Another question is should I file myself, or through a professional. I know, that’s up to me, but just wondering how the IRS reacts.
Another question is what happens if I do my own thing and file 3 years returns + 3 years FBARs — this would be to me quite reasonable and open; would, again, this “irritate” the IRS and prompt it to ask for more (3 more years of FBAR)?
Last question: My instinct would be, as I file, to write an explanatory letter to the IRS to the tune of “I have realized recently that compliance is very important, and a legal obligation, and that I have not been compliant. Living in a highly taxed EU country as an EU citizen, it did not occur to me that I should file returns even if no tax is owed in the US. It is my intention to become fully tax compliant from now on”.
However I wonder if this sort of reasonable (and true) explanation may in fact get me into more trouble than not saying anything.
http://youtu.be/TGprVYpzEzA
Do let me know what you think – I am sure you will!
@Haydon, “Do let me know what you think – I am sure you will!”
It could have aired on The Tonight Show with David Letterman.
John and Jill Taxpayer would have been laughing and laughing.
You put a lot of work in this, you know your stuff but your video points out unintentionally the absolute absurdity of all this.
@George. Excellent. Glad you liked it. It is filmed with an iphone6. The battery was running low and I did not know this causes it to stop recording video but keep recording sound when the “low battery” alert comes up. This is why “advertising” can be seen on screen in two places.
I record it in my garage in front of a green screen.
Anyway – glad the content works.
If anyone has any more links concerning banks reaching out for FATCA compliance and annoying customers, I’d appreciate a heads up. I’ve been saying for years that this is a BIG problem but the banks often believe otherwise. Very few realise that FATCA is a dreadul customer experience.
Thank you, Haydon Perryman. These are indeed a very professional products, your videos. Keep up the good work.
Your statement,
is right on — it seems to me no one can really understand what we customers ‘having the dreadful customer experience’ will experience unless they are actually going through what we are. On that note, surely some of them, those banking people, must be going through it because they will also be those identified as *US Persons* in whatever country they reside. No?
@calgary411 That is an interesting point about “US persons”. I know a few people who have become “Specified US Persons” having met the substantial presence test and are none too happy about it.
I have heard this being referred to as “taxation without representation”. Some have also asked where a “Specified US person” gets to cast their vote.
Banking people (outside the US), as a whole, are not going through much pain on FATCA. Rather, its a veritable jamboree of lucrative work.
Also, these projects tend to be run by people like me i.e. compliance/accountants/audit/risk rather than, say, marketing or Front Office. Such people tend to be task orientated and not terribly outgoing. I generalise, but I think those who deeply care about the customers, and to be fair, there are many, are not well represented amongst those running FATCA programmes.
In 2011, when I told clients that customer comms was FATCA’s biggest challenge, people looked at me like I had three heads.
In general, I still don’t think banks are seeing FATCA through the eyes of the customer. It is almost as if FFIs think they have “FATCA Disease” and that the customers must “take their medicine” so that the FFI can “get better”.
But the pain, I believe, will be felt when people finally realise that customer inertia can, and will, compromise FATCA compliance. It will only be when deadlines are missed that the extent of this problem is realised.
Many FFIs believe that they have the customer outreach under control but IMO they are mistaken.
IMO it will be in 2016Q3 when attestations are made to the US IRS, that FFIs realise that there is a serious problem.
In general FFIs see themselves as the victims.
Projects tend to be graded as red, amber or green. Most FATCA projects are reporting green or amber. I would say these Projects are like water melons: green on the outside, red on the inside.
I personally hope all FI clients in danger of being FATCAed make the FI watermelon heads red all over, inside and out. I wouldn’t mind in the least if the FI watermelon heads actually explode when their clients drag their feet about complying with outrageous paperwork demanded by that very foreign and most malevolent country called the USA. FIs are NOT the victims. They are tyrant enablers and client betrayers. FATCA threatened FI clients are the ONLY victims.
Note: The above was all typed with my FATCA finger.
Fred, I like 3 yrs of each. On the FBAR electronic submission website, http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html
There is a drop down menu for why you are late and ‘I didn’t know I had to’ is an option So is ‘I don’t consider my account to be foreign.
They are going to overwhelmed with millions of these things -most showing low amounts.. they won’t know what to do with them.
same with tax returns. Since you won’t owe taxes due to the FEIE and or ‘foregn’ tax credit, there will be no penalties. Do it yourself. make a best effort. Good luck.
PS A letter probably won’t make a difference. These things are done by computers. I suppose it wouldn’t hurt. Don’t forget there are 150 million returns filed each yr.
Here is the latest in the FATCA series. I think you will enjoy it!
http://youtu.be/dPDnafkbBss
Thank you, Haydon Perryman. I had a quick listen earlier today and will listen again to absorb more. I did like what I heard — and your departure into adding in sound effects from other things we’re listened to.
I wonder what you think of this new product and how it will relate to what your suggestions for how best for banks to do their compliance for FATCA, etc? Press release from Ottawa / product from Ireland: http://www.pressreleaserocket.net/vizor-simplifies-fatca-and-aeoi-reporting-obligations-for-tax-authorities/46394/.
http://vizorsoftware.com/fatca/
@calgary411 Thanks for your message. I have not seen their product, so I can’t comment in detail. I do think any solution that addresses both FATCA and the CRS is part of the solution.
That said, I strongly believe that for both FATCA and the CRS, the biggest challenge is tracking and monitoring outbound and inbound customer comms.
(“Don’t just comply – prove it – or die.” Haydon Perryman.)
Response rates, in the first instance, from customers (W8/or equivalent) will be <10% and even when a response is received, validity will be 20% – 35%.
If Vizor's solution addresses that, then it is an interesting proposition.
re;
“…In general, I still don’t think banks are seeing FATCA through the eyes of the customer. It is almost as if FFIs think they have “FATCA Disease” and that the customers must “take their medicine” so that the FFI can “get better”….”
Love the analogy. Rings very true. And totally congruent with the flavour of the face of the CBA performing on video before our Parliament, and in the media. Oh pity the poor CBA and IIAC.
If the FFI can’t see the problem from the perspective of the actual ownver of the legal local assets in question, they probably also wrongly consider the account contents to somehow belong to the FFI by right and not the actual accountholder. And if interest rates stay so low, then what stops us from choosing to invest in our homes and other things rather than in an account with the FI? If accountholders choose the painful compliance path – then afterwards, what stops them from leaving the FI in anger and resentment, and taking their current (and future) assets with them forever? Each one of those individuals deemed ‘reportable persons’ whose accounts and assets are threatened have multiple non-US family members and friends who can also choose to move accounts.
Banksters are full of overweening hubris if they don’t get that they are already not anyone’s favourite people. It takes very little impetus to get family, friends, co-workers and acquaintances eager to share their favourite worst FI experience ever. Banksters are already concerned with how to make clients ‘sticky’ and how to keep them. FATCA has me saying FU to the banksters, and I AM already compliant and now no longer a reportable ‘taxable person’. Some people may go along with the banksters under duress. But that doesn’t mean that they won’t remember and hold considerable resentment that their OWN money is being held ransom.
Our domestic banksters are now increasingly the visible extraterritorial accomplices of the IRS abroad. Their self serving argument that they ‘had no choice’ is threadbare and unconvincing.
Bankster communications and statements like these http://isaacbrocksociety.ca/2013/11/26/td-vows-to-make-fatca-a-comfortable-experience-for-impacted-customers/comment-page-3/#comment-5350654 show no concern for the accountholder consumers and fellow citizens, residents and taxpayers at all.
Haydon Perryman, I’ve just listened again and recommend your (all of your really) latest video, though directed at FFIs rather than the victims of implementation of FATCA IGAs. Your British humour conveys very effectively the complexity of FATCA documentation and how simplified FFI forms would work so much better than the toxic W8 and W9 that mere mortal ordinary persons cannot effectively decipher. Yours could well mesh with what George has been suggesting here at Brock.
Thank you for all of the work you’re presenting on this — not a class level of *US Person 101* but I think many here can understand what you’re saying. The question is can the FFI’s or the Revenue Agencies?
@calgary411 I pondered a little on your comment about “not a class level of US person 101”.
And yes, you are right, I am aiming at FFIs rather than the victim.
I guess my themes are these:
FATCA is interpretive.
Treat your customers as you would like to be treated.
Rely on your ability to evidence good faith attempts to comply with the regs by documenting what you do.
Understand that some of your customers will hate FATCA for good reason. Hence, 100% compliance is not possible.
In a nutshell: fail but evidence goodfaith whilst always remembering that the customer comes first or goes somewhere else.
IMO FATCA is here to stay. Five years ago we could have prevented it but we did not do that. We have to live in the world as it as, not as it should be. We can’t prevent FATCA. That ship has sailed. I know many of you disagree. We can prevent the CRS but only if we stop focussing on the past (FATCA).
Maybe we can’t stop the CRS either but we can make sure America signs up by embarasing them or by treating the IGAs as breached given the lack of reciprocity.
Presently the U.S. has no reciprocity on FATCA and is the only OECD member of the entire 34 not to have committed or signed up to the CRS.
This means that the U.S. is the biggest secrecy jurisdiction in the world and remains so, whilst weakening all the others.
This means the hot money will go to the US.
Given that there is no way they’ll get even the $8.9B they say they estimated, the only “benefit” of FATCA is that money flows to the US.
Meanwhile we argue about spilt milk whilst allowing the US not to sign up to the CRS.
Also, nothing has changed. For financial secrecy, in general put you money in the US. For secrecy of beneficial ownership go to the Caymen Islands. For corporate secrecy keep ownership at less than 25% in an Inter Governmental Agreement country.
It’s shocking, world wide misery on a worldwide scale with nothing positive achieved.
Thanks, Haydon Perryman, for your additional comment.
Of course, I am one that doesn’t like to hear “FATCA is here to stay.” Today Alliance for the Defence of Canadian Sovereinty ( http://www.adcs-adsc.ca/ ) has reached $300,000 in donations and will make the February 1st $100,000 installment of $500,000 for Canadian litigation against the Government of Canada for its implementation of the IGA signed with the US FATCA, a great feat on the Canadian front.
My next question for you, from a comment on another thread, how in the world will the IRS do what it has set out to do for both FATCA and ACA, given: http://classic.slashdot.org/story/15/01/22/0417207 / http://www.computerworld.com/article/2873372/irs-warns-of-downtime-risk-as-congress-cuts.html?null? Among the most troubling for expats might be the statement in the article, “A new system to protect against ID theft will be delayed, and other IT cost-efficiency efforts will be curbed.”
@calgary411 Congrstulations. I hope I am mistaken and I wish you luck. I sincerely hope your campaign succeeds.
Regarding the article, considering the email fiasco that occurred at the US Internal Revenue Service and that they still use some of the same technology they had when JFK was in power, I have to say that their ability to keep data safe and private is not without risk.
Let’s face it, if a tax authority from a poor country had a record like that, no government would send them sensitive data and few would question that.
Again. Congratulations and the very best of luck.