Virginia La Torre Jeker J.D., has weighed in on how the IRS Notice 15-66
will affect Model 1 IGA countries.
TIMING OF EXCHANGE OF 2014 INFORMATION UNDER A MODEL 1 IGA
Treasury and the IRS will treat foreign financial institutions (FFIs) covered by an IGA as complying with, and not subject to withholding under FATCA even if the relevant partner jurisdiction has not exchanged 2014 information by September 30, 2015, as long as the partner jurisdiction notifies the U.S. competent authority before September 30, 2015, of the delay and provides assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible.
The point to be made here, is that notification is what is required not permission.
Entire article can be found Here.
More on Virginia La Torre Jeker J.D., can be found Here.
Has Canada sent “notification” to the IRS? considering that this notification must provide “assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible”, is this good new or bad news for Canadians concerned about Canadian sovereignty?
If I was living in Australia I’d be really hopping mad – as mad as I’ll be if Canada doesn’t give notice prior to the 29th!
If I was living in Canada I’d be really tail slapping mad.
Well I think thats what beavers do….
I cannot imagine how a jurisdication could fail to provide assurance that a good faith effort is being made if the information is ready to send. If a jurisdiction is being sued, and another suit expected to go to the Supreme Court of Canada, one would think that government might consider it prudent to put reporting on hold. The notice does not say that the info must be sent if it is ready. This is so bloody simple it would seem it shouldn’t need to be said.
@Anybody out there (in Canada) – – Will the public be informed / will we be able to find out if this date IS sent anytime between now and September 30?
@Tricia Moon
If a jurisdiction is being sued, and another suit expected to go to the Supreme Court of Canada, one would think that government might consider it prudent to put reporting on hold.
I think you are correct if–and this is a big if–you believe the only chance to stop the Canadian IGA is through legal action that eventually goes to the SCC.
Essentially you are asking the gov’t of Canada to delay sending the data but to promise to do so if the SCC eventually rules in the gov’t’s favour.
But in so doing you may be preventing the Canadian government from ever delaying sending the data for any other reason–for example if Elizabeth May becomes PM in October and wants to rip up the agreement entirely regardless of what the courts say.
But maybe you believe the chance of a future Cdn gov’t ever wanting to rip up the agreement without a nudge from the courts is very low. So maybe your strategy is the right one. I’m not sure–it just seems risky so I’m nervous.
Dash
This is only an opinion on a blog. It is not a strategy. It is not a position of ADCS.
Pls excuse me but this sounds wrong on two points:
First, there’s no suggestion whatsoever that lawsuit is only way to stop the iga. Clearly, an opportunity that no one would ever have imagined, even if only temporary, has arisen where on some level, the IGA has been (temporarily) stopped.
Second, it is simply not the case that a request is premised on the existence of a lawsuit and that failure of the lawsuit amounts to a promise to send the info. The government of Canada would not request an extention because of the lawsuit and then promise to send the info if the lawsuit failed. Is that what you mean?
I am referring more to the government considering “how it looks” for them to be so harsh.
@Queenston……….this is like fishing out of a barrel.
Especially if its notification only…………….
The Government is involved in serious litigation and is taking all steps to put the litigation behind it so the IGA can move forward on solid ground.
The USA would have to say we do not care about your stinking Charter.
@LM
of course we would get the information out. Not to worry…..
@Dash, “Essentially you are asking the gov’t of Canada to delay sending the data but to promise to do so if the SCC eventually rules in the gov’t’s favour.”
And the Government rightly should send the data if the SCC rules in Harpers favor.
On another thread you mention “good faith effort.”
As part of good faith effort, the Govt should be doing everything to expedite the trial and get it to the SCC as quickly as possible.
@Tricia Moon
The government of Canada would not request an extention because of the lawsuit and then promise to send the info if the lawsuit failed.
My fear is that Harper might indeed make such a promise before 9/30 in the process of requesting an extension.
Would such a promise bind future PM’s? I don’t know. Will Harper actually make such a promise? I don’t know. That’s why I, too, am just commenting on a blog and am not in a position to set strategy. But this is where I’m nervous.
@George
And the Government rightly should send the data if the SCC rules in Harpers favor.
Not if new legislation repealing the IGA legislation has been passed by then. Of course that is unlikely to happen unless the PM is someone other than Harper.
George: You said “The USA would have to say we do not care about your stinking Charter.” They already did.
@ Trish – I have no concerns about ADCS / IBS / Maplesandbox spreading the word. After 18 months in this issue with everyone, I know I can trust the facts to come out here.
My concern was whether or not the [Harper] GOVERNMENT (or any of the party leaders) would actually inform the public / actually allow them to know that yes/no the data has gone out / will not go out and, if it has been or is about to be sent to the IRS, when it was / is to be transferred. The yes/no is important but also the “when” of that action (and when was the decision made).
@Queenston To the best of my knowledge, the government had no intention of asking the IRS for an extension. However they did, push back the date they were sending the information (from September 23 to September 29, where it still stands). Since that time, we have put on a major push to get the information to people who might be able to convince the government otherwise.
@LM- We will know if/when the information is sent to the IRS. It will not be sent prior to September 29th.
I cannot guarantee we will know exactly “when” the decision will have been made. What the government will do with regard to notifying the public is anyone’s guess. It will not be a situation where the government can “disallow” the information being released.
@ Trish, Thanks – things are moving so fast.
I went to see the 3 major candidates in our new riding last Sunday; I’ll try to see our current MP (Conservative, now running for re-election the riding near us that was part of our riding before our area was carved out) and push for another Conservative letter up the Conservative hierarchy. I doubt he will be interested (we had some back and forth about FATCA in 2014) but I will try. Sorry, dont do FB or Tweet.
@Dash
To the best of my knowledge, there is no suggestion that PMSH has been involved at any level, of this situation. I am not experienced in political affairs and don’t know if anyone could make such a promise to the IRS, Such a promise could not have much weight if the CPC does not control the next Parliament nor if the SCOC found the IGA to be inviolation of the Charter.
I believe part of the reason for the extension has nothing to do with whether or not other countries are ready but that the IRS is not ready. Given the behaviour of the IRS during OVDP and penalties, they don’t strike me as an agency with a tendency to be lenient, nevermind flexible. So I suspect the IRS presents it the way that they have, to make them look better (as in “saving face”). IOW, I don’t think they are going to require tons of explanation or justification for not sending the information on Sept 30. It’s just business. They offer something. We follow through by asking. There is a year longer for everything to “come together.” In terms of any later release of information, for Canada I expect it will depend upon:
1)whether or not a “stay”/direction from the Court as a result of the Summary Trial is given
2)whether or not Canada takes advantage of the extention
3)who, if anyone, controls the Parliament after 10/19
4)effect of any Supreme Court level of litigation
If they do send the information on Sept 29 (or before any of these other future developmentsfi) there is no way to weigh it all out. And as life constantly reminds us, more unexpected things will pop up along the way so we will just continue to fight this, step by step, in the best way we can. I think one thing we’ve learned here, is that we can rely upon each other to keep at it. That’s really important.
I think we are all scared about what the possibilities could be and we have no choice but to wait and see what will happen.
@LM
no sorry necessary. The social media aspect is mentioned in the title but if you look at the whole post, you can see all sorts of things have been added along the way. Direct personal contact is always powerful.
“The USA would have to say we do not care about your stinking Charter.”
Didn’t they already say that? The US already says it doesn’t care about its own constitution. The US already says it doesn’t care about the US-written Japanese constitution. The US Supreme Court already blasted the Florida Supreme Court for trying to obey Florida’s constitution when Bush Jr. had won the second-largest portion of the people’s votes. What’s one more?
Tricia, or anyone else who has this information:
I’ve checked the text of the Canada-US FATCA enabling IGA, and I can’t find the section that states that if there is a conflict between the IGA and the Canadian Charter of Rights, the rules in the IGA shall prevail. I remember reading it, but I can’t find it now. This is the section that proves that the Harper govt. has destroyed the Charter, so i wish I could find it.
Thanks.
@Queenston
You need to refine the assumptions in your question. The IGA enabling legislation does trump all other Canadian legislation (with one exception, see below).
But no legislation passed by parliament can trump the constitution. And the Charter is part of Canada’s constitution. That’s why ADCS is mounting a constitutional challenge to the enabling legislation. The ADCS claim is that the enabling legislation is unconstitutional.
………………………………………………………………………………………………………..
Here’s the background on the enabling legislation trumping all other legislation (but not the constitution.
Bill C31
Part 5
CANADA–UNITED STATES ENHANCED TAX INFORMATION EXCHANGE AGREEMENT IMPLEMENTATION ACT
99. The Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act, whose text is as follows and whose schedule is set out in Schedule 3 to this Act, is enacted:
4. (1) Subject to subsection (2), in the event of any inconsistency between the provisions of this Act or the Agreement and the provisions of any other law (other than Part XVIII of the Income Tax Act), the provisions of this Act and the Agreement prevail to the extent of the inconsistency.
http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=6495200&File=104#14
Queenston,
Look, also, at this post at MapleSandbox: http://maplesandbox.ca/2014/proposed-fatca-law-to-override-candian-laws/
@Queenston
“This is the section that proves that the Harper govt. has destroyed the Charter, so I wish I could find it.”
Harper has not destroyed the Charter. To do anything to the Charter would need a constitutional amendment. And parliament, by itself, simply can’t amend (change) the constitution.
What Harper does is repeatedly pass legislation (laws) in parliament that violate the terms of the constitution (in this case, the Charter portion of the constitution).
So people then have to challenge Harper’s laws in court as being unconstitutional. If the court rules that the legislation in fact is unconstitutional, the law is struck down as being an invalid law.
Okay, so you’re Joe Banker, in a country where you are forbidden to disclose the data to IRS under local law. But not to worry, your country has signed a IGA so when you provide the data to your country’s tax bureaucrats, you’re covered. Therefore, you relax and continue to buy U.S.-based investments covered by FATCA. Oh, but your country’s tax bureaucrats fail to comply in time, and you get hit with a 30% withholding even though you have a GIIN (I guess it gets revoked). Very classy. Bottom line: Don’t invest in U.S.A.-based investments, period.
That is not to say, of course, that Harper wouldn’t like to destroy the Charter as he keeps assaulting it in so many ways. I wish he and his merry wo/men had to pay court costs for all that reversed legislation out of their own pockets rather than the pockets of Canadian taxpayers. What an irresponsible way to govern.