“DOING NOTHING” WAS NEVER AN OPTION. TODAY THIS POEM OF DRYDEN COMES TO MIND:
“Fight on, my men,” says Sir Andrew Barton,
“I am hurt, but I am not slain;
I’ll lay me down and bleed a while,
And then I’ll rise and fight again…”“Fight on my men,” says Sir Andrew Barton,
“These [English dogs] they bite so low;
Fight on for Scotland and Saint Andrew
Till you hear my whistle blow!”
[Republican Overseas motion for preliminary FATCA injunction denied (September 29) by Thomas Rose, U.S. District Court Judge in Ohio. Here is the link to the decision.
— Win or lose our Canadian injunction, we will do as George says: “…get straight on to the Charter challenge.”]
This is the affidavit of Sue Murray, which is part of the submission of Government of Canada in response to our request for a delay in the banking information turnover. Go to this link which contains this and other affidavits.
Canada claims that a delay is not possible given the specifics of the IRS regulation.
Also, it appears that about 155,000 bits of private banking information are waiting to be turned over to a foreign country.
Here is her affidavit:
I, Sue Murray, of the City of Ottawa, in the Province of Ontario, SWEAR THAT:
1. I am the Director, Competent Authority Services Division, International and Large Business Directorate, Compliance Programs Brancl1 (“CPB”), Canada Revenue Agency (“CRA”), and as such have personal knowledge of the matters deposed to in this affidavit, except where they are stated to be based on information and belief, in which case I believe them to be true.
Discussions with the IRS
2. Subsequent to the hearing of the summary trial (which took place August 4-5, 2015), on August 27, 2015 there was a call between representatives of the CRA (myself, Richard Montroy, Assistant Commissioner, CPB, and Ted Gallivan, Deputy 000059 2- Assistant Commissioner, CPB) and Douglas O’Donnell, Commissioner-Large Business and International Division, of the US Internal Revenue Service (“JRS”).
During that call the issue of a possible injunction application in this case was raised with Mr. 0′ Donnell. There was general discussion ·of the impacts of such an injunction. Although no definitive answer was provided, it appeared that it would be very unlikely that the IRS would be willing to grant Canada an extension of time to provide information to the IRS in order to avoid an injunction application.
3. On the afternoon of September 18, 2015, the IRS issued a notice, attached as 1::-;hibit ‘ A’ (the «Notice”), in which they indicated on pages 18 and 19 that they would consider granting extensions of time to certain jurisdictions to comply with reporting requirements under an intergovernmental agreement (IGA) related the US FATCA provisions. Specifically, the portion of the Notice that could be applicable to Canada is that pertaining to B. Model 1 IGAs for which the Obligation to Exchange is
in Effect.
4. Mr. Montroy again requested a call with Mr. O’Donnell. When the call occurred, on September 21, 2015, after the appellants had withdrawn their request for an injunction hearing, Mr. Montroy was not available, but a number of CRA representatives, including me and Lisa Anawati, Director General, International and Large Business Directorate (ILBD), CPB participated in the call. The CRA representatives informed Mr. O’Donnell of the outcome of the summary trial application in this case, and that an appeal would be filed, and sought clarification from Mr. O’Donnell on the application oftbe Notice to Canada. Mr. O’Donnell made clear that the Notice did not pertain to Canada’s circumstances and that the U.S. continued to expect that Canada would comply with its obligation to provide its information by September 30,2015.
5. On September 23, 20J 5, after the appellants indicated that they would once again be moving forward with an injunction application, [sought clarification from the IRS 000060 – 3 – regarding whether they would grant an extension of time to provide the information if the appellants were successful in obtaining an injunction.
6. On September 24, 2015, there was a call between representatives of the CRA (myself, Mr. Montroy and Ms. Anawati) and Mr. O’Donnell. During that call it was confirmed that the US was not prepared to grant an extension because the Canadian situation is not covered by the Notice criteria, as the legislation and systems are in place to be able to effect exchange. Given that the Notice does not contemplate such an exception, this was the US position even if Canada is subject to a Court ordered injunction. In addition, Mr. O’Donnell confirmed that the exchange is anticipated to be reciprocal [!] and should Canada be prohibited from delivering its information, the US would not provide theirs.
Change in transmission date 7.
Under the IGA there is an obligation to exchange information by September 30, 2015. Leading up to the summary trial hearing we were asked to advise when the transmission would actually take place and we estimated that it would occur sometime within the September 15 – 30, 2015 time period, in order to allow for technical difficulties that may arise once transmissions began. When, after the hearing of the summary trial, we were asked to advise the court exactly when transmission would start, we determined that September 23, 2015 would be the probable date. However, just prior to September 23, 2015 we realized that we would need more time to make the appropriate arrangements for transmission. In recognition of the need to again provide a date before the September 30, 2015 deadline, and to avoid having to change the date again, we decided that transmission will not take place before September 29, 20:15 and will instead take place either the 29th or 30th of September. 00061
-4 –
Information to be sent to the IRS
8. I have reviewed tbe information which has been provided by Canadian financial institutions and is to be sent to the IRS. The package consists of approximately 155,000 information slips. Each slip represents one account and one account holder.An account holder can be either an individual or a corporate entity. There are instances where a single individual or entity holds multiple accounts. Allbaugh unable to provide a precise number, I can say that the number of individuals represented by the 155,000 information slips is less than 155,000.
lJ. Based on my review of the information slips I can confirm that there are no information slips in relation to either of the appellants in this proceeding. I have reviewed the appellants’ notice of application and note that the injunction they seek in paragraph 1 applies to any information to be sent under the Canada-United States 1:·11/wnced Tax !Hformation Exchange Agreement Implementation ct, being s.99 and Schedule 3 of the Economic Action Plan 2014 Act~ S.C. 2014, c.20. However they also state in their notice of application that they are only seeking an injunction in relation to a “subclass” of information. I have reviewed the remedy sought by the appellants’ in their summary trial application, on the assumption that this is the relief being sought in paragraph 68 of their notice of application, and note that the CRA is not generally in possession of information which would permit it to sort the information slips provided by financial institutions to narrow them to a subclass of information.
Impacts of an Injunction
W. If the CRA is unable, due to an injunction, to transmit the required information to the IRS, and no extension of time is granted by the IRS, Canadian financial institutions will risk losing the benefit of the deemed FATCA compliance that they would otherwise obtain through the IGA. ln particular, as of October 1, 2015, if the 000062 – 5 – ·000063 information has not been received by the IRS and no extension of lime has bct.:n granted, it is possible that the Canadian Financial Institutions could be considered noncompliant.
II . The lGA not only requires the CRA to provide information to the IRS , but for the JRS to provide information to the CRA If an injunction is granted and the CRA is not able to meet its commitments under the lOA, the IRS will not provide CRA with the information it has committed to provide. This would have a detrimental impact on CRA ‘s tax compliance work. The information to be provided by the IRS is helpful to tax compliance work in Canada because it would quickly and easily permit the CRA to match financial holdings in the US to specific taxpayers in Canada to, in a timely way, assess their compliance and if necessary commence audit action. As with other information obtained by the CRA, it is compared to that reported on tax returns and where inconsistencies are identified. compliance actions are undertaken and reassessments made.
12. Canada has a long-standing history of exchange of information with many countries, particularly the United Stales and non-compliance with the lGA would have a detrimental effect on our international reputation in this regard.
SWORN before me at the City of Ottawa,
in the Province of Ontario, this 25th clay of
September, 2() IS .
Commissioner
@ BC_Doc
Your 1) doesn’t quite apply to me except I will have to feign amnesia regarding roughly 1 decade of my life. I’m actually “old stock” who feels at risk of someday being stalked and delivered to the gigantic anaconda across the border.
So my two things are:
1) Why I donate to the Charter challenge.
2) Why I will vote ABC, strategically.
Putin feared FATCA sanctions but wold accept sanction on something dear to most Russian hearts.
http://www.telegraph.co.uk/finance/economics/11780708/Western-sanctions-are-hitting-Russia-harder-than-anyone-realised.html
“Western sanctions are hitting Russia harder than anyone realised
IMF predicts Russia will lose 9pc of its GDP because of sanctions imposed amid the Ukraine crisis ”
What does this tell you about FATCA penalty and the Canadian ability to resit.
Greeks government who ignored the referendum watch their economy suffer even though they now have tog along with EU. They have a FATA agreement in substance. Do you think a majority of Greek would have voted for FATCA penalty? What happened to Swiss referendum.
“Meanwhile, data released on Monday showed that Greek manufacturing activity plunged in July to its lowest level on record as a three-week bank shutdown caused new orders to dive and created serious supply problems.
Markit’s purchasing managers’ index (PMI) for manufacturing, which accounts for about a tenth of the economy, fell to 30.2 points, the lowest reading since records began in 1999. A measure of 50 denotes growth.”
“Although Greece struck a bailout deal with its creditors last month, political in-fighting in Athens over the conditions could still result in prime minister Alexis Tsipras calling an early election.
The Greek economy has begun to reverse the gains it was making before Mr Tsipras’s Syriza-led coalition took power in January on an anti-austerity platform.
The European Commission expects Greece to go back into recession this year, with the economy contracting by between 2% and 4%.
The Greek economy was in recession for six years until 2014.”
http://www.bbc.com/news/business-33754005
The Greek government has a FATCA agreement in substance it probably will be signed when more serious issues are fixed.
@George III
“What does this tell you about FATCA penalty and the Canadian ability to resit.”
What does this tell you if the US demands other countries collect taxes, penalties, interest and FBARs from US tainted persons resident in those countries, including dual citizens?
They will roll over for sure. Then the US will say, “good doggie.”
I just saw that Republicans overseas said that Judge Rose has given out an order denying the motion. So sad for us.
The Summary Trial, the two injunctions…they were necessary but Judges are just flawed men and it required both a wise man and a brave man to rule against either government on such technical issues.
The very core argument is if it is lawful to treat two sets of Canadian Citizens differently where the sole difference was that one was born in Canada and the other through no action on their own was born a mile away in the USA and spent what might have been hours in the USA.
Its time to clear the deck and get straight on to the Charter challenge.
The only option left for expats is to renounce US tyranny. America’s founders did it, so should we.
Many thanks to RO and the James Bopp team. Very special thanks to all the plaintiffs who stuck their necks out for non-resident Americans world-wide.
Also, special thanks to Solomon Yue, Michael Desombre and Rand Paul. Expats across the globe salute you!
Does anyone have further information about the Bopp case? I know an injunction has been denied but what about the constitutional questions? When is the full case going to be heard? We’re not done yet!
@Muzzled, I am sure the case will go forward.
But….
1. American expats need another citizenship if they only have one.
2. Those with clinging nationality need to get rid of the clinging.
3. The only question is between renouncing and relinquishing if you can, and if you relinquish do you get papers or stay undocumented.
The era of the Expat American is gone, finished, caput……
@All
A different Federal Judge ruled exactly the opposite as the RO Judge in Ohio did about two weeks ago in a similar case regarding members of Congress suing the executive branch. Definite ground for appeal by J Bopp. Will provide more info later on.
What is clear from this whole FATCA situation is that America has the financial clout to rape the world. Question I have is whether corporations in America have similar power over the US government and whether that gives a little power to us as consumers.
If we all boycotted American companies and wrote to each saying that we will no longer be “valued customers” because of FATCA, requesting their support with lobbying and the funding of legal action, I wonder what results we will get? FATCA is proof, if we need it, that money talks and, together we might be able to put significant pressure on American corporations. Thoughts?
I think another reason why the US wouldn’t grant the extension to Canada is that it wants Canada’s example to use against any other country where a stay or injunction might be sought. We’re not the only country where it might be possible to mount a suit. We’re not the only ones thinking dominoes toppling. It is why it was important to the US that it could point to Canada as an early IGA signatory.
I’m sure the US wants to forestall any other suits and extension requests if it can. It also knows just what we know – that once they get their hands on the data they can do whatever they want with it since FATCA and the Patriot Act don’t allow for any notice or recourse (even if some of it turns out to be the property of some non-US persons mistakenly collected and transmitted). So, once they get the data, they’ll churn out their convenient fictions and distortions and trot them out for their homeland audience as they did for the OVD programs, and they’ll pretend that FATCA has been a success after all – and cite the 155,000 records that the CRA is prepared to remit – pretending that they’re ‘hidden’ ‘foreign’ accounts, and issue total balance figures that they’ll pretend are ‘untaxed’ assets owed to the US. Whereas we know that those balances will be mainly post-Canadian taxed wages, etc., which don’t tell anyone anything about any verifiable ‘untaxed’ ‘US taxable’ revenues.
And the Harper government needs the US to say no so that it can continue to justify selling us all down the river and misusing Canadian taxpayer funds and abusing Canadian citizens and residents by keeping up the fiction that the US would actually unleash the FATCAbomb on Canadian FIs unless we were thrown on the pyre as a sacrifice to the US Treasury gods.
Really, how much of an incentive would the CRA have to press the IRS in any real way? They have to continue to rationalize what they are doing by saying they had no choice – and now, to pretend that they gained something from the FATCA IGA other than sparing the FIs.
The CRA has no reason to stand up for us or to fight hard to get a delay in transmitting the data because they and their masters are on record about how FATCA is a good and necessary thing. They’re not going to change their stance now. Also, they were able to use FATCA to rationalize asking for more money:
See their budget increase request;
“……$4 million increase for the implementation of tax measures, including the implementation of the intergovernmental agreement between the Canada and the United States to enhance the exchange of tax information, announced in Budget 2014.”
from;
http://www.cra-arc.gc.ca/gncy/fnncl/r150227-eng.html
‘Canada Revenue Agency
Quarterly Financial Report
For the quarter ended December 31, 2014
Statement outlining results, risks and significant changes in operations, personnel and program
‘Highlights of fiscal quarter and fiscal year to date (YTD) results’
‘Analysis of Authorities’
Note that the CRA continues to choose to refer to it as “…enhance the exchange of tax information…” and seemingly doesn’t like to call it FATCA.
And, re that fictional FATCA ‘reciprocity’, this is what the Dept of Finance said:
Finance Committee on May 29th, 2014
General Director, Tax Policy Branch, Department of Finance
Brian Ernewein;
“At the moment, there’s more information that we’re required to collect immediately and provide to the U.S. than they are required to collect immediately.”
https://openparliament.ca/committees/finance/41-2/39/brian-ernewein-12/
Unless the Canadian government was giving the IRS progress reports or the IRS was in Canada actually monitoring the banks and government procedures, how the hell would the IRS even know if Canada was 100% ready?
Unless it’s something you genuinely want, delay, delay, delay for as long as you can!
@ Bubblebustin
Of course the CRA was giving the IRS progress reports. That’s their new boss.
I’m beginning to think the only true way out of all this is mass automation/mass abundance. There is talk we are rapidly heading to this kind of future where no one works and everything is done by artificial intelligent robots and applications. At this point there is no ‘income’ as we once understood it as well as no concept of wealth. This in turn means there is no need for taxes as nothing costs anything to produce, maintain or manage. The sooner this happens we are all ‘free’. Time frames are for the year 2035-2045.
Reciprocity is a joke because IF Canada fails to hold up their end of the IGA by the deadline, then their banks will get slapped with a 30% penalty. The U.S. can send in almost nothing because it doesn’t matter, there is ZERO penalty.
So sorry, Stephen, about the RO lawsuit injunction failing. I’ve only read snippets but it’s clear the American judge doesn’t get FATCA. He says: all Americans with specified foreign bank accounts or assets are subject to reporting requirements, no matter where they happen to live. The provisions Plaintiffs contend discriminate against “U.S. citizens living abroad” actually apply to all U.S. taxpayers, no matter their residence.
He doesn’t get it! The lawsuit was not filed because “foreign” accounts are “subject to reporting requirements” no matter where the U.S. citizens live. He doesn’t understand what makes the reporting requirements so onerous and unliveable. FATCA makes it IMPOSSIBLE to have a basic local bank account in some countries, even for their spouses. (The judge thinks that how spouses and banks react is their own affairs, not to be blamed on FATCA). Also, if you’re in a country where you can get or maintain a local bank account, guess what. Unlike the people who have a local bank in the U.S., you have to file FBARs with the Financial Crimes Enforcement Network and piles of other paperwork for being “foreign” and be subject to their judgments (willful or nonwillful) and according penalties. And if the FINcen agents are anything like this judge, the judgment will be nasty.
FATCA is not the problem, CBT is. Unfortunately it’s unlikely that anyone will challenge CBT because there is nothing in it for US residents, and nobody really cares that much about expats.
I’m very grateful to Mr. Bopp and RO for attempting their challenge, but let’s face it (this is going to sound awful) this lawsuit is more about the Republicans protecting their wealthy constituents living in the US. If FATCA was only imposed on US persons living outside the US, would Mr. Bopp or RO be involved in any of this?
@Marie, I don’t have the link, but the reason S. Yue of RO started the fight was because so many American-born people overseas were feeling that they had no choice but to disown and renounce their US nationality because of FATCA. No other expats (of other nationalities) has been dealt the severe blow that we have. I don’t think the R.O. is in it to protect any wealthy constituents in the U.S. and clearly, Stephen Kish, a plaintiff, isn’t either.
@ George, You’re right. The era of the Expat American is gone, over, kaput.
@Jan
The judge bought into Justice’s argument that our problems are “self-inflicted”, by the sounds of it.
It might take a while, but the U.S. is going to figure out why the rest of the world taxes based on residency. This is the end of American global migration on any significant scale.
Don’t worry, all the GOOD educated people are leaving the USA or have left and are ditching their citizenship. The USA is bringing uneducated needy people in droves… they are pretty much destroying themselves financially.
@NativeCanadian,
Err. Some of us are highly educated completely un-needy people who happen to have been offered a job in the US and though it would be exciting to check it out. Some of us are so un-needy in fact that we can’t leave because of the exit tax.
I feel that I had to jump though loads of hoops like leaving the country to get new bits of paper, fingerprinted when I entered etc for the privilege of paying a huge amount of tax to the federal government. I was repeatedly told I didn’t pay my fare share and fined huge amounts of money because we didn’t file some bits of paper. At the same time those that crossed the border illegally are held up as saints.
They added the exit tax as a new law part way though my adventure.
My adventure turned a little sour when in came Obama. Many people here voted for this guy. Now many here want to vote for a party that has plans that sound identical to Obama. They even picked similar numbers (anyone earning CAD$200k+).
@Marie,
Mr. Yue told me that it was after he read my story in the WSJ and a story about Donnalane Nelson’s experience, he started to think about things and contacted Mr. Bopp.
In general, may I gently remind that ABC will not necessarily deliver the blow to Harper. There is a very good site StrategicVoting that gives direction to which candidate is most likely to beat the Conservative in each riding. Especially important if one lives in a swing riding (there are many). If we don’t do this, it is likely the vote will be split and we might end up with the Conservatives again. We must vote strategically, no matter how much we might have to hold our noses….
I heard a very interesting statistic today that really, is quite alarming. I don’t know what the total percentage of CDNs that voted in 2011 was but, the Conservatives, from the total number of eligible voters, really only received 18% of the vote. (It would be 38% of those who voted but apparently a fair number of people did not).
“This is a solidly Conservative riding; strategic voting will not make any difference.”
As I’ve known all along and as confirmed by this statement from Strategic Voting there will be no help to Heave Steve coming from my riding/district but I urge every Brocker who lives in an area that can help, to hold your nose if you have to, and vote ABC, strategically. If you know anyone who has issues of their own with the Harper government, please try to direct them to the SV site as Tricia suggests.
http://www.strategicvoting.ca/swingdistricts.php
We’ve had enough bad news today. Let’s do everything we can to prevent the Canadian election results from being a downer too.
Why was there an announcement here a few weeks ago that a CBT law suit would be filed inside the USA “very soon” by another group. This was after we were ignored in the SFC report. What a tease!
CRA data handover to IRS brings NO SURPRISE to the realist.
So, 155,000 information slips. What exactly constitutes an “information slip”?
Nothing other than W-9 and W-8BEN?
GREAT SURPRISE that broccultists have not elevated this shred onto a pedestal of obsession.
@Phil not meant as a tease. Things have gotten complicated. Please appreciate it is a very small group of people who are working. It will happen when it happens.
@usx- It doesn’t surprise anybody particularly. Did you have some particular advice as to what we should do then, given you seem to think we should do nothing?
No, nothing to do with W8 or W9. An information slip pertains to one account, with name
address, account number, balance, deposits and withdrawals. There are duplicate names so it
is somewhat less than 155,000 people.