Global News has the following report:
U.S. sues Vancouver dual citizen for over $1M for not reporting accounts
This is big news. And it reveals and confirms my prediction of what FATCA would be used for: To go after the bank accounts of “US persons” living in foreign countries by using FBAR fines and FATCA information. I called it the Master Plan.
A few observations on this article:
(1) Clearly this lawsuit should help the ADSC lawsuit. Here is a case of real hazard that failure to protect Canadians from IRS intrusiveness will result in.
(2) This case is not based on tax owed, and so this is purely an FBAR matter. But IRS code has no jurisdiction in this matter.
(3) The article doesn’t say where the lawsuit is taking place, but then says that the papers were deposited in Seattle in Federal court.
(4) The fine of $100,000 or 50% of account is wrong: Or did it go up from $10,000?
(5) President Donald Trump has made no difference in the persecution of so-called “Americans abroad”.
(6) This is a Canadian living in Canada. He is therefore an innocent person being sued by the government of the USA, for small money. I.e., he is a minnow, and what Nina Olsen has called a benign actor.
(7) The lawsuit shows that QI provisions are not sufficent for the USA government to seize Canadian accounts in Canada.
(8) The Justice Department is not suing this person in Canadian court. But perhaps that will come next.
U.S. government suing Canadian resident for $1.1M over bank form
@nonanonymous, Perhaps the Justice Department is testing the statute of limitations in court. If that works, then some of us who are counting on the six-year SOL are f—ed. We will never be able to leave the clutches of the Land of Freedom.
Yes, we live in a Demagogic Society.
‘there is a similar popular bias against dual citizens in Canada. The perception is that duals have enjoyed (or potentially could enjoy) the advantages of US citizenship, so why should they not comply with its obligations?
I encounter this view constantly, in various fora, comments along the lines of “ten years ago you were all boasting about being able to work in the US, but now you’re pretending you didn’t know that you had to file taxes” etc.’
Here’s a retort for next time.
If the person is able to work in any of the 10 provinces, they willingly pay provincial income tax to all 10 provinces on their Canada-wide (and worldwide) income, right?
It sounds like the lawsuit alleges (though likely falsely, it alleges) that Mr. Pomerantz resided in the US during the years he’s being sued for. If so, ADCS would be better off not trying to cite an not-quite-relevant case.
On a practical note, there is one commenter in particular, Kathy “Powell”, who could use upticks on the CBC article for her efforts to set things straight … if anyone here has CBC commenting privileges. (I gave mine up when “real names” were required.)
As for Jeffrey Pomerantz who is truly living “a friggin’ nightmare”, there’s just too little information to create a clear picture of his situation. I won’t judge him as others at CBC are doing. I’m just shaking my head at how those without a clue keep tossing in misinfoturds to muddy the waters even more. What is crystal clear to me is that the villain in this scene is the IRS/DOJ and even if Jeffrey Pomerantz is guilty of something he doesn’t deserve to be completely impoverished for it.
No, it’s just much easier to generate public support for people who are more deserving of sympathy. I can’t see anything “demagogic” about that idea.
I don’t feel hard done by if people like myself, who put their US citizenship to use, are not perceived as innocent victims on the same level as those who never left Canada as adults but who are suddenly facing US tax bills. Makes perfect sense, really.
Agreed, the situations of “accidentals” no better highlights the injustices. Accidentals need to be our poster persons. Unfortunately, this case may be poster material for condors.
The above comments say the person probably got on the radar via Swiss and Turks and Caicos Islands accounts. Of question is how the CIBC and RBC accounts got on the radar? Was this FATCA information “exchange?” If so, that may bolster the ADCS case and support the testimony of Robert Wood.
Then this would support a case that the Canadian Government is violating the tax treaty with providing FATCA information where the tax treaty says that the Canadian Government will not assist the U.S. collect tax debts for Canadian citizens resident in Canada at the time the tax “debt” was incurred. Certainly providing information on accounts, account balances etc. for the purpose of of assisting a tax claim based on the existence, account balance, and nonreporting of such accounts is directly assisting the U.S. government. Otherwise, such claim may not be made. Additionally, IMO, even the filing of such extraterritorial claim by the U.S. government is punishment in an of itself and should invite Canadian Government intervention and financial support even if the U.S. tax claim gets overturned.
Will the Canadian Government change from its position of bovine passivity in regards to its Charter Rights and tax treaty protection obligations in face of U.S. extraterritorial tax?
This is contra to the propaganda that exemption from FATCA reporting of retirement accounts was a big win in the negotiation (same, by the way, as for all other nations). Not out of harms way, even though the Canadian tax treaty is considered among the best for protection of retirement accounts!
This references the U.S. Treasury Department definition of exemption of double taxation (tax no higher than for each country for each category of tax), while the application of U.S. tax jurisdiction violates the justification of taxation as provided by Immanuel Kant: that tax is only justified in exchange for providing services and for the protection of property. The U.S. neither provides government services to residents of Canada (roads, hospitals, unemployment, etc.) nor does it provide for the protection of property (police, courts, army, etc.). Therefore, the U.S. claim of tax jurisdiction over Canadian residents is not justified. Full stop. The extra tax should be zilch, especially if one has no money or investments in the U.S.. And there is no justification for the extra compliance and penalties if there is no tax jurisdiction.
IMO, the Canadian Government should be sued for the tax treaty itself by not providing exemptions and protections for Canadian residents, of which accidentals no better highlight the injustice of CBTax and the shirking of the Canadian government obligation to protect its residents. Hopefully as the ADCS case progresses more of the injustices will be highlighted.
I wonder why it has taken so long for this case to hit the papers. The suit was filed 10 months ago. I agree that this particular case seems to be about a very old error (and therefore may not be FATCA related). But I also believe that this could be the shape of things to come if this whole matter is not brought to a close by Congress in these next months. While it may not be the perfect example, I do believe that this case is illustrative of the vulnerable position in which the government of Canada has placed all it’s US-immigrant citizens, of whatever economic means, by adopting the FATCA IGA.
The $10,000 fine is for unwillfull noncompliance. The fine for willfull noncompliance is the greater of $100,000 or 50% of the highest balance of the year.
FBAR is wrong. It doesn’t matter if you are sympathetic or not.
The very nature of there being some who are more sympathetic than others shows that we do not live in a society that considers fundamental principles of justice as the most important consideration. It is thus a Demagogic Society, not a free society.
Right, fine, we live in a demagogic society. Next…
Of interest, links to legal documents, posted on the Facebook group.
Follow the second link, the Pomerantz2 document. Short and extremely funny.
10 months? Isaac Brock Society doesn’t seem to have covered this Pomerantz until today. So we were scooped by Global and CBC.
“in a worst-case world the US could retroactively reject past renunciations”. Did they not retroactively reject relinquishments?
Yes, homelanders have been whipped into a frenzy over “offshore” accounts. There is no reasoning with them once that term is applied. Whetherr it is applied correctly or not does not matter.
I’m not sure that Pomerantz being resident on non-resident in the US during the period in question (2007 through 2009) is terribly relevant – either way, he’s a US citizen and legally required to file FBARs for his non-US accounts.
The first link leads to a relatively short (and digestible to a non-lawyer) document. It appears that claims have been made against him quite some time ago, with specific reference to the 6-year statute of limitations.
If Mr. Pomerantz resided in the US during the period in question then the US targets someone who resided in the US during the period in question. The ADCS lawsuit would benefit from the US targeting someone who didn’t reside in the US during the period in question.
This may explain why the case has just recently come to light:
2016 US DEPT OF JUSTICE (DOJ) TAX DIVISION: FBAR PENALTY COLLECTION CASES
– By : P. Patel Date : 07-Mar-17
“The US Dept of Justice (DOJ) Tax Division recently published it annual summary highlights of civil tax matters. The publication is linked here (Updated through December 16, 2016), and contains brief summaries DOJ Tax activity (decisions, court filings, etc.).”…
“Recent collection case filed by US Dept of Justice Tax Division in 2016 include:
United States v. Jeffrey P. Pomerantz (W.D. Wash.) – On May 13, 2016, we (DOJ) filed a complaint against Jeffrey P. Pomerantz seeking to reduce to judgment penalties for willful failure to file Reports of Foreign Bank and Financial Accounts (FBARs) for 2007, 2008 and 2009. The penalties amount to over $800,000. Pomerantz is a U.S. citizen residing in Vancouver, British Columbia. In 2003, Pomerantz formed a shell entity in the Turks and Caicos to manage his investments. The Turks and Caicos entity opened several Swiss bank accounts with Sal Oppenheim Bank, over which Pomerantz retained signatory authority. However, at the time the IRS initiated an exam of his tax returns in January 2010, he had not filed any FBARs for 2007, 2008 or 2009. During the course of the exam, he filed FBARs. Pomerantz has a pending case in the U.S. Tax Court contesting tax deficiencies and fraud penalties asserted for 2007, 2008, and 2009. The deficiencies and fraud penalties asserted by the IRS against Pomerantz and his wife arise in part from income deposited into, and income generated by, the late-reported and unreported foreign accounts.”
See more at: http://www.patellawoffices.com/blog/protecting-your-assets/2016-us-dept-of-justice-doj-tax-division-fbar-penalty-collection-cases/#sthash.ufjRbBdL.dpuf
@nononymous, on the SOL, yes, you seem to have explained it. The judgement was made some time ago and so this case has been in the works since before the SOL expired. So that said, it would appear that I am myself clear for those years, 2006-2009, and 2010 will expire in June. Once one is facing the court however, the SOL will not expire.
“If the person is able to work in any of the 10 provinces, they willingly pay provincial income tax to all 10 provinces on their Canada-wide (and worldwide) income, right?”
An excellent argument, or so I thought until I used it. The response was, “Oh that’s just silly!” and that was from me own mom!
Typical condor spew:
“The case illustrates the inherent unfairness of the U.S. tax rules,” Reed says. “While those rules are really unfair, they probably aren’t changing any time soon. It’s been this way for a long time.”
“The best way to get a bad law repealed is to enforce it strictly. Abraham Lincoln.”
I agree that hysteria over “offshore” accounts is misplaced when it refers to (or sideswipes) ordinary people banking in the countries where they live. However, there is another sort of offshore account. It may be difficult to generate much sympathy for a guy who lived in Canada and the US but set up a Turks & Caicos corporation with Swiss bank accounts. That’s potentially quite different.
Agreed but to the typical homelander it is the same. All the hear is “offshore account”. They have the belief of an evangelical when it comes to “offshore accounts” being good for only nefarious purposes.
But, as I think you know, there are perfectly legit reasons to have the accounts and corporations he has. May not be able to conduct business legally in those countries with out them, for example. I had local accounts in Japan when I was a student here and I have helped many foreign students open accounts in my college town. We, they and I, still had accounts in our home countries at that time. Some of the wealthier students had accounts in more than one country as they spent time in other countries growing up and spent vacation time it them. Ordinary situation for many.
Just try telling that to a homelander though. I have had no luck, anyway. Even those living here in Japan and who operate businesses think that cases such as the one discussed here must be due to some intentially criminal act on the victim’s part. They can not, will not conceive that such bad events can happen to an innocent.
However, as thisis the only way to over turn this, I am open to suggestions as to how to reach them.
Just saying, Turks and Caicos + Switzerland ain’t the best optics.
Pomerantz smells fishy. Definitely not the aroma of a minnow. Harsh sunlight ups the reek.
Reminder for Petros: No such thing as SOL for fraudsters. Sun never sets.
Yes, but we all are “fraudsters”, hence the need to prove we are clean with our yearly FBARs.