Reposted from ADCS-ADSC blog
The end of the beginning …
Time flies. It seems like just yesterday that your FATCA lawsuit was filed. Well, it’ been a year. It’s been a busy year. A “busy year” always seems like “just yesterday”. I am spending next week in Vancouver. The obvious reason is that I want to watch the opening round of your lawsuit. Win, lose or draw, please understand that this is going to be a long process.
Tis the season …
It’s election season. It’s widely believed that Prime Minister Harper will “call the election” this weekend. An election affords an excellent opportunity to discuss “all things Harper”. Of course to discuss “all things Harper” might include discussing “all things FATCA”.
Democracy is NOT a spectator sport – I have a suggestion for you …
Consider running as a candidate in the upcoming election. You can run as an “Independent Candidate” (a concept that has always been dear to my heart). You could also run as a “small party candidate”. Both the Green Party and the Progressive Canadian parties have voiced opposition to FATCA. If you are interested in running (I am quite serious) shoot me an email, I will explain how to do this. It’s very simple. You will have fun. You can make “FATCA” part of the overall debate about the Harper Government.
FATCA lawsuit – round 1 …
The summary trial on August 4, 5 will be based on “affidavit evidence”. What this means is that the evidence is presented to the presiding judge in the “form” (no pun intended) of written statements. If the evidence were offered through a “live witness” the witness would/could be “cross examined”. The same thing is true for “affidavit evidence”. I found it quite interesting to read the Government’s “cross examination” of your witnesses (Professor Christians and Mr. Wood). The cross examinations reveal both good news and bad news:
First the Good News …
I have the distinct impression that the Government lawyers do NOT understand what FATCA, the IGA, CBT, etc. are about.
Second the Bad News …
I have the distinct impression that the Government lawyers do NOT understand what FATCA, the IGA, CBT, etc. are about.
When the good news and the bad news are the same …
Yes, the “Good News” and the “Bad News” are exactly the same. It’s hard to understand and explain the technicalities of these issues. What is a “poor lone judge” to do? I am completely confident that our lawyers are vastly superior to the Government lawyers. Yet, the question is whether the judge will understand the issue(s). We will see …
Remember that win or lose this is going to be appealed. The “FATCA Chronicles” are heading to the Supreme Court of Canada where the issue will be decided by nine judges.
Litigation – Judges and the Supreme Court of Canada …
Judges matter and they matter hugely. I commented on this in my recent “Message in a bottle 2: Democrary, the Appointment of Judges and the Canadian Charter of Rights and Freedoms“. (It’s interesting that Sean Fine of the Globe and Mail has just written a series of articles (July 24/15 to July 31/15) where he discusses the same theme. Mr. Fine has written an excellent series of articles. I urge you to read them.)
Explaining the ADCS lawsuit to “every day people” …
We are all ordinary “every day people” until we are personally affected by issues in an extraordinary way.
It’s amazing that a group of “every day people” has organized, funded and implemented that first “FATCA” related lawsuit against a government that signed an IGA. Canada is the country most affected by FATCA and the country with the “moral authority” to resist FATCA. The Harper Government could have chosen to be the “FATCA Terminator”. Instead it decided to establish itself as a “World Leader In FATCA Implementation”. This is further evidence of the Government of Canada behaving as “managers” instead of as “leaders”.
As Templeton Growth Fund (one of the original PFICs) would say, you should be:
“Proud of your past and Confident of Your Future” …
I strongly suggest that you take pause and reflect on this simple fact. It’s my hope that your efforts will inspire residents of other “FATCA Infested” countries to stand up to their governments. We will see.
You may think that you are “ordinary”. But you are “extraordinary”. You have made this FATCA lawsuit happen. That’s the simple “FATCA of the matter”.
It’s about education and the biggest problem is …
It’s hard to explain this stuff. You must keep it simple. You must demonstrate the injustice. I would put it this way:
The Government of Canada has agreed to help the United States impose U.S. taxes on “certain Canadian citizens and residents”. In order to help the United States do this, the Canadian Government has passed laws requiring Canada’s banks to report the bank accounts of those “certain Canadian citizens and residents” to the government. The information goes first to the CRA and then to the IRS. The Canadian banks asked the Government of Canada to do this. The Government wanted to help the banks. You should let Stephen Harper know how you feel about this on October 19.
But, who would believe you anyway? It’s so fantastic that most people believe that you are making it up. But, then again, they have yet to receive a FATCA letter. This is a good moment to refresh you memory with an afternoon at the movies:
Standing Committee on Finance Meetings re FATCA https://t.co/9fDxWSSdcT via @YouTube – Government of Canada imposes US FATCA law in Canada
— Citizenship Lawyer (@ExpatriationLaw) August 2, 2015
“Information Exchange” triggered by the choice of residence vs. information exchange triggered by the immutable characteristic of “place of birth” …
Regardless of your views of “information” exchange FATCA is very different from the OECD common reporting standard.
FATCA is NOT based on residence. It’s based on a claim of “jurisdiction over individuals” based (primarily) on a U.S. place of birth. Furthermore, the United States in its sole discretion defines who is a “U.S. person“.
The OECD standard is based on residence in one country and bank accounts in another country. Furthermore the definition of “residence” is defined by the OECD and NOT by any one country.
This distinction was recognized by the ADCS lawyers as follows …
FROM GINNY AND GWEN’S JULY 30 2015 REPLY ARGUMENT TO GOVERNMENT:
“…Though the defendants [the Government] assume the plaintiffs are citizens of the US who therefore owe compliance obligations under the domestic laws of the US, the plaintiffs themselves do not consider the fact of their birth in the US subjects them to the laws of a foreign state, whose citizenship they have never accepted or acknowledged. On its face, there is no legitimate reason for Canada to help a foreign state identify and punish them for failing to file forms they do not believe the foreign state had any right to demand of them, particularly where, as here, there is no reason whatsoever to believe they are engaged in tax avoidance or evasion…”
“…The defendants’ say in answer that deemed tax residence of US Persons under US tax law and the consequences that flow therefrom is a domestic policy choice that is beyond this Court’s role to evaluate. But construction of Article XXVII is a matter of international law. And international law does not give the US any presumptive right to impose its domestic tax reporting regime within Canadian territory. As noted by one international law scholar:
‘… For there is clearly no general rule of international law granting all states extraterritorial
rights in other states. If among any particular states extraterritorial rights exist, they either
stem from a treaty or from special customary practice that amounts to consent on the part of the
territorial state….’”“… the defendant’s position relies on seeking to locate the IGA within an emerging “international consensus” on automatic information exchange, from which it actually radically departs. In all other examples of this emerging consensus, information is only automatically exchanged where the individual maintains an Fl account in the disclosing jurisdiction and there is an indication of actual residence in the receiving jurisdiction. This is the same basis upon which information has been automatically exchanged between Canada and the US for decades prior to the IGA. In this situation, the taxpayer is doing something international, by banking or investing in a foreign jurisdiction. By contrast, the plaintiffs are banking and investing at home. While one might legitimately believe there is a heightened risk of avoidance or evasion where a taxpayer maintains foreign FI accounts, there is no such indicia of increased risk to justify the disclosure of Canadian FI information of Canadian residents…”
“…The defendants’ attempt to paint the IGA itself as extrinsic evidence of a broader intention of the parties in agreeing to Article XXVII is without evidentiary foundation. In fact, as set out in the Supplemental Report of Allison Christians, the IGA is not an agreement between the same “parties” to the Convention since, on the US side, it has not been submitted for ratification to the US Senate, which was a party to the Convention. Indeed, the constitutional validity of the IGA in the US is dubious, and that validity is a matter currently being litigated there…”
Why not just stand on a street corner (even in the United States) and ask people the following question …
Do you think its okay for the United States to try to impose taxes on people who don’t live in the United States on income that was not earned in the United States?
Give it a try …
Why we will win …
It’s very simple. At the end of the day, FATCA, CBT, FBAR, etc. are moral issues. They are just plain wrong. They trample the human spirit and impede human progress.
“First the Good News …
I have the distinct impression that the Government lawyers do NOT understand what FATCA, the IGA, CBT, etc. are about.
Second the Bad News …
I have the distinct impression that the Government lawyers do NOT understand what FATCA, the IGA, CBT, etc. are about.”
Hey! FATCA and CBT are American, and the IGA is dual including American.
So you need something more, which you forgot…
“Third the Ugly News …
I have the distinct impression that the Government lawyers do NOT understand what FATCA, the IGA, CBT, etc. are about.”
Thank you, John, for this simple, short and beautiful statement that says it all.
“Why we will win …
“It’s very simple. At the end of the day, FATCA, CBT, FBAR, etc. are moral issues. They are just plain wrong. They trample the human spirit and impede human progress.”
I agree that the gov’t defenders have no clue what FATCA, CBT and FBAR really are. The Arvay team has a tough job.
We don’t even need to drag the US into this. This can be a solely domestic discrimination issue.
Many Canadians with non-Canadian birthplaces are now being targeted by the Canadian government for extra scrutiny by the CRA, and without any suspicion of wrongdoing.
As well, it seems to me that it will still be a domestic discrimination issue against the Canadian Charter of Rights and Freedoms if, then as a result of litigation findings, instead of the CRA turning the private financial information of US-deemed US Persons over to the IRS, instead it is done directly by the banks. No?
The only way it would not be is to turn the private financial information of EVERY Canadian citizen and permanent resident over to the US IRS. Mr. Arvay’s response to the Government of Canada defendants on Gwen and Ginny’s behalf touches on that very thing.
@Calgary411
That’s certainly something I’ve been emphasizing for a few years now. On the US side, the FATCA IGA’s fall well short of finding their target, on the Canadian, Canadians are being discriminated against for not having a Canadian birthplace.
…and some for having a Canadian birthplace but who were born in Canada to US parent(s), placing some US-deemed US citizenship superiority over their birth in Canada, never to have lived in or received any benefit from the US — some of those *non-meaningful US-deemed US citizens* that Stephen Kish describes.
Canada offering the life’s blood of those born in the U.S. seems to be enough to appease the IRS tax gods at this point, perhaps because they know it would be going too far? They’re already way out on a limb, it seems.
bubblebustin,
On the surface, though…
to appease the IRS tax gods, I had to pay them Canadian blood money as tax on Canadian government contributions to the RDSP I hold for my son. They now have from me, as the accounts I hold on behalf of my son had to be and were identified on my FBARs, US$3,661 of Canadian taxpayer money funneled through me. All of that so I was able to successfully renounce my US citizenship in 2012 (although I was warned I had lost it in 1975 when I became a Canadian citizen) and file my 8854 to say I had done so. (This does not take into account all the stupid mistakes I made along the way so I could not claim that 1975 reliquishment.)
The above clip shows exactly why we cannot vote Conservative in the next election. Just listen to the howls of laughter by the Conservative members of Parliament as this MP discusses the situation of a mentally challenged young man caught up in FATCA.
And I particularly like how the Conservative MP (Mr. “Congress has spoken”) goes on to imply that’s it’s not too bad because this young disabled man can just break the law, fly under the radar by keeping the accounts Registered, or under 50K. Jackasses!
I just watched the above clip for the first time and it makes me absolutely sick. It also makes me want to fight all the more…..my next donation will be in the mail tomorrow.
@Calgary411
This makes me sick. The Canadian government should be smacked upside the head for allowing these “treaty gaps” to steal from your son’s financial security and my retirement funds earned on the sale of my home here in Canada. Prof Christians has no idea why the Canadian government allows this to continue. Stupidity? Malice? Both?
One has the impression that certain government officials have a secret deal going on behind the backs of others who clearly state “this is against the canadian charter”. It just feels like they have been bought.
@ Polly
Putting on my hyperbolic, jingoistic tin foil helmut … It crossed my mind once or twice that besides threatening the Canadian gov’t with “an offer you can’t refuse” vis a vis the 30% bank sanctions, the US treasury envoys might have also offered to set up a secret kickback scheme whereby a small portion of the form penalties collected would be used to reimburse the CRA for its assistance in making it happen. Could they be that devious? Wouldn’t surprise me. However Harper is at U.S. beck and call so he could have just been doing his usual “must please Master” thing too.
Reimburse the CRS? I was thinking paying government officials. Or giving them some sort of benefits.
If a person makes an information report to the IRS about another person, and the report leads to the IRS collecting penalties from the other person, then IRS gets to decide whether the IRS will pay a percentage of the penalties to the person making the report. So for example the IRS would decide to pay a percentage to a Candian banker or CRA employee. But if you or I find an IRS employee illegally counselling others to commit perjury on US tax returns or an IRS employee corruptly altering IRS records, the IRS would decide not to pay a percentage to you or me. These decisions would be legal.
@ Polly
I doubt Harper cares about being paid off. His big thing is power and yet he’s got such a bad case of misguided puppy love for the USA and ultra-right ideology that he slobbers and submits (free of charge) when directed. We need a PM who loves Canada and everyone therein, first and foremost. I can’t imagine what happened to that man along the way to make him what he is today — controlling, calculating and completely enthralled by the power of others while seeking more of the same for himself. My understanding is that Harper was infected by “The Calgary School” and the teachings of Leo Strauss.
Bubblebustin and 2 terrified to sleep — also to Marie,
Thanks for watching that clip (again, Bubblebustin and for the first time, 2terrified2 sleep) of our Canadian government in action. Sick people indeed, those Conservatives who someone voted into office. Could have been someone like you or me believing their interests and that of all Canadians would be best represented by these people.
May we all ask lots of questions this time around (the long 77 days ahead) and take nothing for granted. We need some stated policy, not the dodging we have so far, on our issues.
Not all Calgarians are part of *The Calgary School*. Good comment, EmBee.
https://en.wikipedia.org/wiki/Calgary_School
Calgary411, my suggestion will break your heart, but please consider making this sacrifice, at least for a few months.
Take your son to a border crossing. Tell the US immigration inspector that you’re not going to enter the US, but your US citizen son is going to enter the US, he needs disability benefits from US Medicare and US Social Security, and they’re going to take care of him at the expense of US taxpayers. Hopefully the IRS will take him to court in the US too, so a US judge can see the effect of FATCA and ET/CBT.
In the video, the NDP and the Cons were talking past each other, but in a way they’re both right. The Con artist was correct that the biggest problem isn’t FATCA but is ET/CBT. Maybe the tax treaty needs to be scrapped and Canada should pass a law prohibiting any foreign ET/CBT from applying to any Canadian citizen in Canada.
Re: The election and our choices, I still want to hear from Tom Mulcair on FATC, The IGA, and banking privacy for every Canadian and legal resident in Canada. Although we heard much from Murray Rankin and Nathan Cullen, it seems Mulcair weasled out from making an unqualified statement against FATCA and the IGA. If anyone sees him at a campaign event, please hold his feet to the fire!! As for Trudeau jr., I fear he is a lost cause and too in love with Obama to help us. He listens to Larry Summers, an Obama man, and hasn’t a clue about our issue(s). If you dear IBS souls are the praying type, now would be a good time to step it up a bit. I know I am, and I am cobbling together another donation too.
Norman Diamond,
Thank you for your recommendation. It’s a novel idea but one I just don’t have the stomach for and I don’t think would qualify as *looking after my son’s best interests*. I just could NOT DO THAT TO my son. I want nothing from the US unless it is one day the freedom to travel at least one more time in my lifetime to the US to see remaining siblings — but WITH my son able to accompany me.
I’m also not a risk taker, especially when it involves my son. Neither I nor my son are plaintiffs in the Canadian litigation as in the interview process it was concluded he would be brought into process that would be for sure confusing and probably harmful for him or anyone like him. Because of this, I have extra respect and will always be grateful to Gwen and Ginny for not backing down in representing all of us. It is not just about my son but about all with similar circumstances. There just WILL BE many sons and daughters like my son, perhaps with a developmental disability or perhaps something else that has affected their capacity to understand, caught up in the absurdity.
I do want Canada to find the courage to stand up and say that my son’s birth in Canada or that of any other *Accidental American* takes precedence over any US-deemed US citizenship — entrapment into continued US-deemed US citizenship because of lack of capacity to be able to renounce just an added burden to that affected category. My son has always lived in Canada and his US-deemed US citizenship is the very definition of *non-meaningful*.
You’re right, my son’s problem and the problem of every person who is an *Accidental American*, who had no choice in the matter of where or to whom they were born, is ET/CBT. It is an abomination. I will continue to support litigation in Canada and a future US litigation mentioned — the one against CBT itself.
Lake Superior Guy,
I did get to ask the question to Justin Trudeau (awhile back when he was in Alberta and it was a post here quite a ways back). His convoluted and wimpy answer didn’t even relate to the question. That plus his taking NO STAND against Bill C-51 had me cross JT off my list.
I’ll be one of I hope many who will ask Mr. Mulcair the question — as has been done by ADCS-ADSC letter to all the party candidates. I’ll always be grateful for the way Murray Rankin and Nathan Cullen stood up for us but there must be a definite policy statement made. Will the litigation help them take that bold and courageous step? I hope so.
Calgary411, my next door neighbour is in exactly the same situation as you: came to Canada 50 years ago, has a developmentally disabled child, now a grown up, and an RDSP. My neighbour is now 80 years old, a widow, and in no condition herself to be wrestling with US tax lunacies. However, she has been a life long NDPer and her husband actually ran as a candidate many years ago, so maybe there is some added NDP traction with her story. Do you have any sense about how many people in Canada would have a story similar to yours and my neighbour’s? The stories are so powerful that it seems like their impact would be magnified geometrically with each new telling.
@Embee
Thats just it Embee- define “puppy love”. What is that really? Usually it translates into “love for prosperity”.