Bubblebustin says:
Thank you Calgary411 for posting this for me.
As some of you already know, I heard back from Canada’s Revenue Minister, the Honourable Diane Lebouthillier, as to whether my Canadian banking information had been sent to the CRA in last year’s FATCA IGA information reporting.
As it turned out, three information slips were reported from two different investment firms where I had signed a W-9 at some point. None of my other bank accounts where I had not signed a W-9 were reported although one of my bank’s managers knew I was a USP. She retired before it came time to report that account. It’s good to know that the CRA isn’t being extra helpful to the IRS by providing information slips on bank accounts that it is aware of through Canadian tax reporting – yet.
The letter contains a contact number for the Director with the Canadian Competent Authority Services Division others may find useful in trying to get straight answers when having to deal with FATCA.
-Bubblebustin
Thanks very much, Bubblebustin, for sharing with other Canadian Brockers your CRA Letter (linked above)!
An interesting question would then be whether they are only turning over data in cases where someone has signed a W-9. In signing a W-9 one does admit to being a “US person”. But do they ever turn data over when the bank has other reasons for believing that someone is a US person? For example someone at one point showed US identification to open the account or acknowledged a US place of birth? If someone instead signs a W-8BEN (where they claim NOT to be a US person) does the bank ever turn over the data if they think someone is a US person? Do banks ever refuse to accept a W-8BEN and insist on being provided with a W-9 if the bank believes the customer to be a US person even though the customer claims not to be? What happens if the customer refuses to sign either form saying that in Canada they shouldn’t have to deal with any US forms at all? Does the bank turn over the data? Close the account? Refuse to open the account?
What @bubblebustin has provided is an interesting data point that at least in this case the W-9’s seem to be what triggered the sending of the data but there are still a lot of unanswered questions as to what happens in various scenarios. I hope that the Arvay lawsuit will eventually get to the bottom of how exactly the data handover happens in practice.
@Dash1729
Why wait for the outcome of the lawsuit? We now have a contact with the Competent Authority who should be able to answer your questions. Fire away!
@Bubbles
am so glad you FINALLY got the information. What a hassle. No excuse for it.
Thanks for posting for BB calgary!
Thanks both of you.
Thanks, Trish. I wasted a few months trying to get it through my MP, even though her office said they were working on it. Right.
@bubblebustin
That is a good point–hopefully that contact can answer questions from the CRA’s point of view although the CRA may not be aware of all the policies of the individual banks.
Thanks for this. My experience with the Fatca letter in the UK was that I had to ask questions about why I was receiving this letter after not taking notice of it for about a week. By chance, I looked at it more closely. Then we know what happened, i found out about Fbar and CBT. I never returned the form because I forgot, i realised months later i had not returned the form. Does this mean my information was sent anyway? Do I even want to know? No action was ever taken. I am still happily banking there. and no correspondence from the IRS yet.
I renounced today in London finally. The experience was better than I was expecting. Everyone was so helpful in the embassy and very understanding. Everything was explained to me thoroughly. No one questioned why. I was even given helpful advise about travel these next few months.
What was so surreal was that there were some applicants for passports there and I want to a queue in front of them and I asked if this was the right check in counter. they said they were there for passports and what was I there for. I simply said the opposite. They looked at me with real respect and said congratulations. On my way out, one of these passport applicants stopped to ask me how it’s done. Then my husband came and we took a picture of me outside the embassy and we went to have a drink to celebrate. It was a beautiful warm sunny day in London today. I feel such a sense of relief that it went so well.
Now for the final dual status return next year and freedom.
@Dash1729
Last year on Canadian Money Forum I stumbled onto a thread where a pretty classic “accidental” got into a spat with his bank, HSBC in Victoria. He was born in the US to serving Canadian military, returned within the year. He wanted to move some funds into a mutual fund, the bank asked for his place of birth. Not knowing any better, he said Virginia. Then all hell broke loose. He tried to sign a W-8 but they would not let him; he refused to sign a W-9. Not sure how it all ended up, an impasse last I heard. He was trying to prove that he wasn’t a US citizen due to his father’s status (though as far as we could tell only diplomats’ children avoid citizenship at birth, not military on secondment; I suggested he claim that his father was an attache with a diplomatic passport).
Congratulations, UK Rose. So glad it went smoothly for you and you and your husband were able to celebrate afterwards on a warm and sunny London day.
What a memory of your day, getting by mistake into the new passport line and saying you were there for the opposite. Glad that statement wrought you some respect and congratulations — it sure should have!
GOOD NEWS! For the first time ever we have a Chairman of the Ways and Means Committee who is a cosponsor of the FairTax. He has promised a Fair Hearing. If passed it will do away with all the tax issues of your committee and Americans who live abroad can go back to being citizens of The USA and where ever else you choose, without any tax ramifications. Letters to Ways and means and contributions to Americans for Fair Taxation would help get the Monkey off all our backs and make taxation about raising money and not about Social Engineering and put Karx Marx back in his coffin in Transylvania.
@Nononymous
I just found that old thread. He seems to have been especially blindsided by his bank. It looks like at one point he filed a Declaration of Retention of Canadian Citizenship and he was hoping to use that as a basis for proving that he’d relinquished US citizenship but it isn’t clear what happened from there. Incidentally although his situation is similar to that of the three plaintiffs, it is different in the sense that he was born during one of the time windows when a Declaration of Retention of Canadian Citizenship was required. As far as I can tell the situation of the three plaintiffs is slightly different because they were never required to file a Declaration of Retention of Canadian Citizenship due to being born at different times.
@Dash1729
I’ve seen my bank ask what my citizenship is (I’m a Canadian is a Canadian is a Canadian of course), but I have yet to see a request for “Place of Birth” which I think we can all safely answer as “Planet Earth”.
@UK Rose
Congratulations! I’m glad they made the process easy for you. I’m sure you’re relieved to have it over with.
My investment firm (RBCDS) sent a personal information form with checkboxes for Canadian citizen and US citizen. (Not US person, just US citizen.) I checked only Canadian.
@Middle Finger – I like that suggestion for answering “place of birth” questions! (By the way, are there any people with a non-terrestrial birthplace – or has no one been born in space yet?)
@ Nononymous says
If your financial advisor is a close friend or relative who knows you are an ‘accidental’ they are
at risk of losing their licence by checking ‘Canadian’ on any bank forms.
I went to my MP for clarification on joint accounts coming under IRS tax scrutiny when only
one spouse is deemed to be ‘accidental’ or a ‘US person for tax purposes’. My uninformed
MP did not believe the IRS could tax joint accounts when only one person was ‘accidental’
but agreed to get his assistant to investigate. Here is the answer or non answer we received.
Following up again. I should mention the main points that came out of my phone meeting with the Minister’s Special Assistant yesterday. This, of course, is not the Ministerial response – these are just the points I took down from our conversation.
Providing them to you here for your reference…
– The government’s position is that the agreement was made behind closed doors. While it does not disagree with the agreement in principle, it disagrees with how the previous government negotiated it.
o Nonetheless, the government believes that FATCA is essential in cracking down on tax evasion.
– The Canada Revenue Agency is committed to applying the law.
o Info will be shared with the IRS as per the agreement.
o The Minister of National Revenue will uphold and defend the practices of the CRA.
– As for your specific questions, they have no clear answers.
o However, they say that your financial institution will have a better idea of what they’ll be sharing with the IRS if they ask for information on your joint accounts.
o The banks have a legal responsibility to disclose everything they share to you.
My MP has written a letter on our behalf to various government ministries. It has been a month
with no response. I want my MP to stand up in Parliament any ask ‘why my spouse is considered
a ‘tax evader’ but he would have to grow a pair to do that.
I’m pretty sure the investment firm “knows” about my status – they also handle some of my parents’ money and my parents have discussed this with them. I figure they don’t care, for two reasons: by my signing a form, they’ve done their due diligence and it’s on my head; my accounts are all RRSP so not reportable anyway.
The investment advisor and I had a long back and forth when I first refused to answer the question on the grounds that RRSP accounts were non-reportable – why did they need to know? I told them I wasn’t saying anything about US citizenship until they assured me that none of my account or personal information would ever leave the bank. They could not give me a guarantee, so I threw them a curveball by offering to sign a W-8, which was obviously a big lie. At that point they dropped the issue and sent me a personal information form to sign with only the Canada box pre-checked for citizenship. I signed it “without reading the fine print” – or at least that’s my excuse.
Of course it’s possible they’ve flagged me as a US person or as “recalcitrant” but presumably they’re not reporting RRSPs so it doesn’t matter. And if it became an issue I’m sure they’d do the safe thing – keep quiet and fire me as a customer.
So this whole nonsense has only managed to entrap people who unwittingly checked off the wrong box, everyone else remains in the clear.
There you go, you’ll be scarred for life for being honest and open about yourself.
The lesson is, never say more than you absolutely have to, and never honestly answer any question that appears to be irrelevant to the services your are paying for, and never ever answer a question that may be used against you in a discriminatory way, which apparently includes questions about your nationality and location of birth.
If you imagine that Donald Trump is asking the questions, then you’ll have a much better idea on how to answer them.
I don’t have a huge problem being dishonest in my dealings with large institutions, so yeah, I’m fairly happy with this outcome. It’s the simple solution.
@Middle Finger
*place of birth*
Hospital… where… the maternity ward…. acting confused also stops the stupid qs or move the topic to something they want u to shut up about… if u are talking with men… start the feelings discussion…. they do not want to hear it…
The elders in my family yells at us about saying too much to anyone outside the family….they survived a war by lying or saying nothing… we use to make fun of them about it… now we understand…. biggest lesson learned…. do not over explain yourself… say as little as needed… no one has to understand your intent… its none of their dang business….
@UK Rose
Congrats… the big boulder is off your shoulder… u can move on with your life….. never to look over your shoulder again
http://www.cpapracticeadvisor.com/news/12246540/report-shows-banks-unprepared-for-new-fatca-crs-cdot-regs
Surprise surprise the accuracy of FATCA returns is in question. If I was told to fill in a W9, I would put in a false SS number, at least the IRS would have to allocate resource to ‘match up’ names and SS numbers – make them work for it.
At present FFIs have no way to determine the accuracy of SS numbers so it’s somewhat of garbage in garbage out at the moment.
For some reason any form related to FATCA seems to bring out the latent dyslectic in me. I am quite prone to transposing numbers and sometimes I even have difficulty remembering where I was born and which country I am a citizen of, LOL.
FWIW, SSNs can be validated (to some extent), so a false SSN picked out of thin air would probably fail validation and may be caught by the FI before being sent to the IRS.
See:
https://www.ssa.gov/employer/ssnweb.htm
https://www.ssa.gov/employer/randomization.html
Assuming the FI cares enough to check. I’m pretty sure mine doesn’t. They’ll just do the minimum to cover their asses, which in this case might be to collect and pass along whatever data the customer gives them, without any attempt at validation.
Why would a FI give a rat’s ass whether the data is correct or not? Its not like they are making big bucks administering this make work project and it is of absolutely no benefit to them. I have hunch that the IRS will find that sifting through all the incoming data will cost them more than they could ever hope to collect. At least while they are wasting their time figuring out all the errors in this flood of new data, they won’t be hounding some poor Homelander over the bank interest he forgot to declare.
This is not only a government project, folks; this is a US government project. The US government is the world’s largest and most dysfunctional organization and it is now charged with implementing a fool’s errand.