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.
@George – I agree. At present there is no way for the bank to tell if you have a non-US place of birth. However my fear is as FATCA evolves what is stopping the US to basically cross check it’s ‘US citizen’ database with who has filled tax returns after making FATCA a ‘two way process.’ For example, if they know John Schmidt with a particular data of birth hasn’t filed, they send out a data file to every bank in the world and ask them to cross check.
Another worry trend will be the private companies like Experian coming to the rescue to help banks comply. The banks cross check their database possibly eliminating the need for them to ask in the first place. Tag the account US reportable safe in the knowledge that if they’ve made a mistake there’s no recourse for the account holder.
The principle with Residential Based Taxation needs to be followed by only Residential Based Information Exchange needs to be established.
I don’t know why anyone would renounce without being tax compliant, unless of course it’s solely for a CLN to show your bank. It’s like painting a target on your back. What will the IRS do when they get wind that you’ve never filed and continue not to file?
“Accordingly, of the 5,211 former U.S. citizens published by the federal government for the four quarters of 2014 and the first two quarters of 2015 ALL probably continue to be subject to U.S. worldwide taxation unless they have completed IRS Form 8854 as described above and included the required information in a complete and accurate manner and signed it under penalty of perjury.”
http://tax-expatriation.com/2015/08/23/how-many-of-the-5211-former-u-s-citizens-who-renounced-are-still-u-s-taxpayers/
@Native Canadian……see this CBC article of today.
http://www.cbc.ca/news/aboriginal/3-reasons-why-first-nations-voters-are-suddenly-more-engaged-1.3198052
Unfortunately it makes no mention of FATCA and CBT as being another reason. Is there any way you have better “ins” on this discussion to further our cause?
Let Trump scrap ‘born in America’ citizenship and so the world a favour.
http://www.cnn.com/2015/08/24/politics/donald-trump-birthright-citizenship-undocumented-immigrants/index.html
Nobody wants to be a US citizen unless the US changes to RBT.
Thank you for that Pierre. I will look into it today. Also, the T-shirts are ready. I will be picking them up tonight after 5. I chose a small business to print them they need the work more than the large corporate companies.
Just got off the phone with my Con Candidate here locally. Wow, she refused to meet in person and basically said my wife was an American and she should renounce as she must obey American law in Canada. I told her her party is being sued and the news is spreading. Wow, to me calling my wife an American in Canada is a complete insult! She refused anything in writing..wow, and they want to be elected?
@NativeCanadian……excuse me my friend as everyones story is different….mine sure is.
Your wife is a passport carrying Canadian correct?
You may want to nicely write the con person clarifying that she in fact referred to a Canadian Citizen as an American and that you as a Native Person consider this racist and request an apology.
Send it registered mail…….with a copy to the papers.
“is a complete insult! ”
Its not an insult, its disgustingly RACIST.
@George. She knows I am a Canadian aboriginal and that my wife has her Canadian citizenship given to her at birth from her Canadian mother on US soil. This is the easy way for her to say that she is towing the party line. My god, this is the most dangerous party for Canada. I will be picking up and posting my T-shirts that I will be incredibly proud to wear at ALL candidates events and in public!
Ok The shirt has hit the public. I wore my new shirt while doing my grocery shopping tonight and it sparked 2 conversations that ended up with the people being disgusted with the Conservatives. I also let them know as per my conversation with my local Con candidate that anyone that came to Canada is actually NOT a Canadian, they are a “dual” and must obey laws from their home country as Canada is sending private confidential data to one country so far on dual people only. It is clear that if you are a born in Canada Canadian, you are pure and anything else makes you a dual. Canada is now torn in half! I am taking pictures of my shirt and sending a copy to Trish to post on here. The printer said he would be happy to print and send to anyone that wants one. The cost is 20.00 per shirt. I can also give Trish the printer’s information if anyone wants a shirt. The conversations are starting!!!!
@NativeCanadian and others
The British Columbia Civil Liberties Association (BCCLA) has launched a lawsuit against Bill C-24, which creates (so they argue) second class citizenship for naturalised Canadian citizens.
Is there any thought that ADCS might intervene in this case? I am not suggesting that our scarce funds should support their case, rather that we might make common cause, if only nominally?
@Native Canaddian
FANNNNTASTIC!
Can’t wait. I will wear one proudly!
Will put up as soon as you send.
Thank you for all that you are doing!
@Tricia. I sent you pics about 2 hours ago… Thanks!
http://www.bna.com/hearing-set-injunction-n17179935160/
Just a quick update on the Jim Bopp lawsuit. Request for a preliminary injunction will be heard on Sept 4th.
Native Canadian
Just made it its own post. Cannot open the first picture. Can you pls try resending perhaps as png? thnx
Bubblebustin:
You said “I don’t know why anyone would renounce without being tax compliant, unless of course it’s solely for a CLN to show your bank. It’s like painting a target on your back. What will the IRS do when they get wind that you’ve never filed and continue not to file?”
There are many people who have never filed, and never will but need a CLN, as you said, to show their bank (and only people with US birthplaces need one, really). It’s far from obvious that when a CLN is sent out, the IRS is alerted. And even then, the IRS simply does not have the resources to investigate everybody. They rely on self-incrimination and the quite effective tool that is FATCA to force people to comply. But even then, many people owe no tax, especially in the EU where local taxation is significant. No need for the earned income tax exclusion either, when you hit the 50% tax bracket by €30000/year.
Although my situation is different, and I have not renounced, I know personally 2 people in the EU who have renounced, obtained a CLN, and are getting on with their lives and have not and will not ever file anything with the IRS. Once they cease to be US persons, it would be incredibly resource-consuming for the IRS to find out: are they alive? Where do they live? What was their past income, assets? To get them to answer mail, get them to a local court, translate documents, hire local lawyers, etc. Basically it’s impossible for the IRS to go after someone like this, and they’ll do it, I imagine, only if there is a particularly juicy incentive to do so: a high-profile case, lots of money, etc.
Therefore while in theory you are correct, in practice there is no point, for many people, in ever filing anything; just get the CLN and forget the whole thing.
@ Fred You said, “I know personally 2 people in the EU who have renounced, obtained a CLN, and are getting on with their lives and have not and will not ever file anything with the IRS.”
My question is, how does one get a CLN without filing anything with the IRS? Doesn’t one have to file 3 past years (or is it 5) before they let you get a CLN? That’s one major reason we haven’t pursued a CLN. The $3000 CAD price tag plus the price tag of getting all the past years filed. As you said, “they rely on self-incrimination” and we can’t afford to self-incriminate ourselves.
@Fred
.”..in practice there is no point, for many people, in ever filing anything; just get the CLN and forget the whole thing.”
I would take that one step further and argue that there is no point, for many people, in getting a CLN, unless one absolutely, unequivocally, totally needs one. Mileage may vary, depending on exactly how a particular nation’s IGA has been worded and how its FFI’s choose to interpret that language as their own internal policy. For instance, it is not yet clear whether Canadian banks will consistently require a CLN to be provided by US Persons who do not have one in lieu of a “reasonable explanation”, such as the fact that years ago the US did NOT require a CLN to be issued upon the performance of a relinquishing act – like thousands of Americans becoming naturalized Canadian citizens.
I would rather bide my time and stay under the radar as long as possible. How not to be seen. The law of unintended consequences ALWAYS comes back to bite, so even that “simple” little act of stepping foot inside a US embassy or consulate to spill your guts may plant the seeds of your eventual destruction without you even realizing it. Don’t forget that getting a CLN is subject to review and approval by DOS so it’s never a “done deal” until they say it is, so some people may NOT get one and end up in even worse straights. Better to wait it out, if possible, and see if FATCA dies the natural death I predict it eventually will, since it cannot possibly bear its own weight for long.
@ Jan
No, filing with IRS isn’t a requirement for obtaining the CLN. The connections between the two are:
(1) Dept of State
Renunciation (or applying for a CLN based on a relinquishment) itself doesn’t require submission of tax returns. DoS basically doesn’t care about one’s tax status as the citizenship itself (and the issuance of the CLN) is not dependent on one being tax compliant.
Dept of State’s involvement/connection with tax is the following:
(a) At the consulate the person signs DS-4081, Statement of Understanding of Consequences; one of the 12 items on it is Item 10, that renouncing “… may not exempt me from US tax income taxation [etc] …”
(b) The questionnaire, DS-4079, at q. 13 (e) asks “Do you file US income or other tax returns?” The tax question on the DS-4079 is there as an indicator of your ties and connections to the US, which is important if you’re claiming to have relinquished some time ago. For renunciations, it’s basically irrelevant. (DS-4079 is not across-the-board required for renunciation but DoS allows consulates the option to do so (DoS Foreign Affairs Manual, Renunciation). Some don’t, some do. But anyway if you’re renouncing, Q. 13(e) has no bearing on things.)
(c) Dept of State is to provide IRS with a copy of each CLN they issue as per DoS Interagency Coordination and Reporting Requirements, 7 FAM 1243(a).
(2) IRS
To log out of IRS and avoid covered expatriate status, IRS requires that the person file their exit tax form (8854), their final year form, and the five-years-previous-to-final-year forms, by June 15th of the year following the renunciation (or the year following signing of the 4079, in case of relinquishments).
If a person chooses not to file, the citizenship itself remains terminated and the CLN remains valid.
Interesting!
Deckard: I agree 99%
Personally I have chosen to go through the motions of trying to become compliant again because I have a US birthplace, and have already been thrown out of one bank (I had opened the account as an EU citizen, but in 2014 they asked me to prove I was not a US person — I couldn’t; they closed my accounts — Deutsche Bank). My other banks have not found me (yet) but I figured I would need, when the day comes, to be able to show them a CLN (they seem to be adamant about proof here) or say I am compliant and give an SSN, etc. Not having decided to renounce or relinquish (yet) I took the option of starting to file again.
But you are certainly right: one should stay under the radar as much as possible. If I had a non-US birthplace I would right now just put my blue passport under a rug and forget about my US personhood, and absolutely tell nobody, declare nothing, pay nothing, file nothing… That is the best way, my friend.
@Fred
I do sympathize with you and all the others in Europe who are bearing the brunt of FATCA pushback. It is still too early to tell how things will play-out in Canada…
Amazing that the need to hide one’s “American-ness” can now take its place in the dubious historic pantheon of nationalities and faiths who have also needed to hide their origins or identities for their own survival.
Yes, it has indeed become dangerous and shameful to be revealed as a “US Person”. Far more shameful that the United States, The Great Bastion of Freedom™, now treats its own kin in such a despicable manner. There is nothing for Americans to be proud of anymore, except for a few pointless memories of what they’ve already destroyed.
I am one of the “self renouncers”
I will never travel to amerika again
I will never go the a border crossing
I will never set foot in a consulate (unless there is a special group discount deal on shedding amerikan citizenship 🙂 )
I have moved the majority of my banking to a “local client based” credit union and will move the balance once a few things are cleaned up
uncle sam has no idea who or where I am. I have broken no Canadian laws, the country I am a citizen of and where my home and life has been made.
if uncle sam were somehow able to find me and send me a brown envelope, that and any other such letters will end up at the bottom of my bird cage.
I have broken no Canadian laws and I refuse to live my life looking over my shoulder in fear from a country I want nothing to do with. a country I left in 1966 at age 6.
uncle sam you want me….come find me cause I am not playing your game and making it easy on you to find out who or where I am…..
@Mettleman:
Never fear. If FATCA doesn’t get us, OECD WILL!!
UNLESS we win our lawsuit and the Charter Challenge!!