UPDATE SEPTEMBER 19, 2015: SEE ALSO DISCLAIMER AND LITIGATION UPDATES.
[This post, which began in May and having over 1000 revisions and 2000 comments, is being retired from service and updates. It lived through the success of reaching a total of $500,000 in donations from our kind, dear supporters who had little money to give, the hope and disappointment with the summary trial decision, and the certainty that we are now finally moving on to the Charter trial.]
CANADIAN CHARTER TRIAL UPDATE:
— We have instructed the Arvay team to prepare for the “Constitutional-Charter” trial. This means that our focus now, as it was in the beginning of our lawsuit, is on the Charter trial.
Unless there is a new expense in the future that we have not anticipated, the monies from your donations will be sufficient to take us through the “constitutional-charter” trial in Federal Court. However, to pay other legal bills we will need additional donations from our supporters, and a request for donations will appear on another post soon.
OUR LITIGATION HISTORY:
One year ago, on August 11, 2014, Litigator Joseph Arvay filed a FATCA IGA lawsuit in Canada Federal Court on behalf of Plaintiffs Ginny and Gwen, the Alliance for the Defence of Canadian Sovereignty (en français), and all peoples.
Because of a Government delay we initiated a “summary trial”, using a portion of the arguments, which offered the possibility of preventing private banking information from being turned over to the IRS before September 30, 2015. See Alliance’s Claims, our Alliance blog, and AUGUST 4-5 SUMMARY TRIAL FILINGS in LITIGATION UPDATES.
Just got in from medical appointments and am so interested in what has transpired. Seems like the Govt have their hands in the air and are repeating that “Congress has spoken”. Like robots. Good God what has happened to Canadian Sovreignty and the Rights of Canadian residents.
If anyone could organize to get a set of the cds that cover the trial I would gladly pay for a set.
@Ginny:
My free square would say: Government had the opportunity to protect both the banks and Canadian Citizens and Residents by the simple insertion of ‘ except for Canadian Citizens and Permanent Residents’ into the IGA the gov was so anxious to sign.
That the IGA is illegal in the US and would have certainly been litigated and is so now, in the interim it would have protected both Canadians , Residents and banks not to mention privacy and above all Sovereignty. That is how simple it would have been. Offered up by various MPs no less than 6 times, it was rejected out of hand by the Conservatives, too scared and too intimidated by the banker swivelling in his chair,US lawyers and US tax consultants to take under consideration one simple amendment that would have avoided this entire court case.
PM Harper and the Conservatives would have been heroes protecting sovereignty and privacy and Canada’s citizens and residents while the FATCA issue was fought out in the US where the fight belongs. In addition , it would have been a model for governments all around the world who have been faced with the same dilemma.
More filling the Bingo card from Stephen:
I wonder how the judge took to the radical concept answer about U.S. law stops at the U.S. border. Seems he is also not buying into this is no different than a T4. I don’t think the feds are having a very good day.
Another good morning to the Canadian government’s lawyers:
I became a Canadian citizen BY CHOICE in 1975, when I was warned by aUS Consulate that I would be losing my US citizenship by doing so. (I considered that advice true and at the very least a gentlemen’s deal.)
My children were born in Canada, although to two (at the time) US citizens. They were never registered with the US (although that makes no difference and, even with the consequences of US citizenship-based taxation). My daughter and I have officially renounced and have our CLNs to show to our (formerly) local CANADIAN *foreign financial institutions*. My adult son who has never lived in the US and has never had any benefit from the US cannot renounce his automatically ACQUIRED US-deemed US citizenship as he does not have the *requisite mental capacity* to be able to do so. Further a parent, a guardian or a trustee cannot act on such a person’s behalf, even with a court order. That is the definition of ENTRAPMENT into ongoing, year-after-year-after-year cost of compliance with the help of US tax lawyers and US tax accountants for no US taxes ever owed — other than the taxes the US imposes on the Canadian Registered Disability Savings Plan (RDSP) that is to help ALL CANADIANS WITH A DISABILITY save for some of the additional costs that their disabilities bring them.
No, dear Canadian government lawyers, the RDSP is not exempt from having to be reported to the US by the deemed-US taxpayer (only the banks from turning the information over to the CRA to then be turned over to the IRS. Would this not somehow be a form of tax evasion — the Canadian government telling US Persons in Canada that their registered Canadian investments are exempt for reporting?
This is the way the Canadian RDSP is taxed by the US for US Persons in Canada (from my US tax lawyer) — :
I paid the US IRS US$3,661 as I am the Holder of my son’s Canadian RDSP. That means that the Canadian taxpayer who helped make the Canadian government’s contribution in bonds / grants to my son’s RDSP (different than to other Canadian son’s or daughter’s RDSPs) is discriminatory and seems to me theft from those other first-class taxpayers of Canada. (Those deemed *US Persons in Canada* are second-class to any other Canadians, discriminated by their or their parent(s)’ national origin. This seems to me discrimination on top of discrimination. If there are such consequences of US citizenship-based taxation, either the Canadian government has to stand up for all Canadians (which it could have easily done and been a leader in the world) or the US must change to residence-based taxation as the rest of the world, especially as there is NO CHOICE or an OPT-IN to US citizenship for those with the requisite facts, rather than the OPT-OUT that now exists, especially when anyone, in Canada a Canadian with some *mental incapacity* which includes much more than developmental disability, can be ENTRAPPED into the adverse consequences. Why is Canadian citizenship, mine by choice, my children’s by birth secondary to our Canadian citizenships? Why would you allow that to happen to any Canadian — Congress has spoken? Is it not enough that I had to pay over $42,000 to US tax lawyers, US tax accountants and US immigration / nationality lawyers for my freedom from the US, that my son’s freedom could never be gained?
It is repugnant that Canadian banks come before Canadian citizens and permanent residents. It is repugnant that those the US deems US citizens are now second-class to any others who reside in Canada. It is repugnant that Canada does not first follow Canadian law, then international law, rejecting extra-territorial US citizenship-based taxation law to override the law of this country. If financial information of ANY Canadian was given directly to the US or any other foreign country by a bank without due process, would that not be against many Canadian laws an the Canadian Charter of Rights and Freedoms?
Just waiting for more court feed comments being sent to me from Gwen so we can continue to play. It’s going to be a long day.
Well said @Calgary411!!
The other side of that very coin is that any Canadian Citizen with NO connection whatsoever to the US but happens to have an American spouse is subject to having THEIR information turned over to the IRS for their fishing expedition and determination that their all Canadian income and investments, because they have an American spouse is subject to US taxes and fines for non filing and possible non compliance.
Just who they can get information for and tax is completely in their control. They can and do change the definition of ‘US person for tax purposes’ all the time as it suits their intentions to confiscate cash any way they can via form ‘crime’ violations and ‘non-compliance even with no tax owing and with NO probable cause anywhere in sight!
Again, this all could have been avoided by one simple amendment in the IGA!
Do the government lawyers really believe what they are saying?!? Do they really believe FATCA is no different than a T4?!? (For the info of non-canadians, a T4 is a statement of income issued annually by an employer for tax purposes).
The government seems to have had no problem *exempting* Canadian registered accounts — although that was for the banks and not all the people who are required to both report and pay taxes on those accounts.
@Deckard
You just gave me some flash back memories of boycotting both California grapes and SA wines. Those were the days.
@All:
“Judge asks:
Can you substantiate that this is a routine reporting system. I would like the evidence”
I like where the Judge’s thinking is going!
@Furious
My free card says: US LAW stops at its border
@Ginny:
TOO Right!!
What amazes me is that the gov argument has not changed ONE iota from the very beginning. Not ONE! All this BS about needing to go over nearly 100,000 documents and needed a delay was all just that. A delaying tactic. They have not looked beyond their noses nor their initial argument : Congress has spoken. What exactly have they been doing since this suit was launched nearly one year ago?
Picking their noses?
Federal lawyer just filled another square for me.
“the whole intergovernmental agreement has been signed with all kinds of countries so that their banks don’t get whacked by the big bad US bullies. And that’s why Canada did it too. ”
Too bad we don’t have another graphic artist while Gwen is in court who could make a Bingo card for us, so we could all follow along.
The so called Reciprical square is now filled.
From Gwen:
The defense says “this is reciprocal” and the judge asks “so does Canada have a program by which we can withhold tax against their financial institutions if they don’t comply with the reporting we are demanding of them?” LOL
Justice has just had confirmed that Canada lacks the “hammer” (withholding) that the U.S. has under FATCA to collect against Canadian residents with US accounts who may owe Canadian tax.
Ok, now we’re cooking with gas. Judge just asked Feds “what is the practical measure that we have at our disposal to make sure that they duly report to us as promised?”
Mr. Taylor says “you mean do we have a hammer? No we don’t hammer the US. They hammer us. They will do what they promise through their own laws that they have enacted” (paraphrased)
@Heidi
Your choice of ” If I had a hammer”, today’s theme song was brilliant. That should fill one of your Bingo squares.
@Ginny:
My God! I cannot believe the ‘kicked dog’ argument gov is making to the judge!!
They really are sniveling cowards!
And expect that to be a legitimate legal argument!
Your Honour, that pretty well sums up what we have dealt with for four years. Don’t be surprised if you do not get answers.
And security guards almost had to be called in as the court room attendees got a little too carried way with snickers when the Federal lawyer said:
“nobody held a gun to our heads to make Canada sign FATCA”
Justice noted that a Canadian only spouse sharing an account with a USP will be reported.
@ Ginny.
I have been humming it all day!
I Don’t even buy their lame retort…
“They will do what they promised through their own laws that they have enacted.”
These are not laws, they are intergovernmental agreements, arranged by the treasury, Congress did not get a chance to vote…says Rand Paul in his lawsuit.
@Blaze
This judge is getting it and getting into it. Hurrah! Don’t forget, Canadian taxpayers are paying for this brilliant legal expertise!