Thanks to @HelenBurggraf for this about the upcoming problems created by the Dutch banks. You can see the actual video from the Dutch banks here – is this information accurate or not? https://t.co/WW1K973T4l https://t.co/wR3hhghhO7
— U.S. Citizen Abroad (@USCitizenAbroad) August 31, 2019
Thanks to Helen Burggraf at American Expat Finance for reporting on this story. Helen was recently interviewed by the BBC on this topic. (See also this article that appeared on the STEP blog.)
The most important issue in the world today (forget about the demonstrations in Hong Kong) is whether US born people can supply banks with a US Social Security Number! Yes, it’s time to formally document, those undocumented US born people, who have always lived in other countries!
By way of background, the FATCA IGAs require that the banks include an individual’s TIN (Social Security Number) as part of FATCA reporting. Because the “powers to be” in U.S. Treasury, never contemplated that there might be accidental Americans (what in the world are those?), who did not have a Social Security Number, Treasury relaxed the requirement of a Social Security number until December 31, 2019. It is NOT clear what happens on January 1. 2020. Do the banks cease to be compliant with their obligations under the FATCA IGAs? Are the banks required to close the accounts of those life forms, who were born in the USA and are living as “undocumenteds” without a US Social Security Number? It looks like the Dutch banks think that account closures may be appropriate. There have also been “bank noises” coming out of the UK and France suggesting the same thing.
The UK, France, Netherlands (and Canada) have the same kind of IGA. Actually, most of the world has the same FATCA IGA. This means that “accidental Americans” the world over may be having problems. It’s just that “USness” (usually based on indentification of place of birth) is more visible in some countries (Europe) than in others (Canada).
Since it’s the IGA that governs what is required to be disclosed, it’s helpful to look to the IGA to see what is actually required. Not a single media article has referenced the section of the various IGAs that would require the closing of accounts. But, no matter …*
As Ms. Burggraf writes:
In the latest development in what is becoming a fast-moving international story concerning the bank accounts of tens of thousands of “accidental Americans” living outside of the U.S., it has emerged that the Dutch Banking Association has posted an animated video on the home page of its website in which it warns such clients of the need to get their U.S. Social Security numbers – if they don’t wish to lose their Dutch bank accounts.
A spokesperson for a European accidental Americans organization said that the video appeared to suggest that Europe’s banks were “well on their way to becoming the willing agents of the U.S. Internal Revenue Service.“
The actual video (which is well worth the look) is referenced in the following tweet:
A public service message about #FATCA from the Dutch banks – look out! They say they may no longer be able to provide services to those who where "Born In The USA" and are therefore @TaxCheatByBirth! https://t.co/Nf6HvJJakA
— U.S. Citizen Abroad (@USCitizenAbroad) August 31, 2019
Yes, it’s true. The Dutch banks are very anxious to assist in subjecting Dutch citizens and residents to the U.S. tax system.
Hard to believe that:
1. The United States is claiming tax residents of other countries as their own U.S. tax residents; and
2. That the banks are so willing to assist in facilitating this.
It apparently hasn’t dawned on these people, that the U.S. and the U.S. alone, defines exactly which Dutch residents are subject to claims by the United States.
In any event, it seems to me that the video makes some claims of questionable accuracy. If you agree, perhaps you could post some of these as comments.
And yes for those who are only interested in what steps they might take to get a U.S. Social Security the answer may be found:
Here for those living in Canada (actually its worse); and
Here for those living outside the United States and Canada.
The Dutch banks are blanketing the airwaves requesting that those with a U.S. birthplace provide the banks with a Social Security number. It’s not easy having a U.S. birthplace. In fact, life is probably too short to live it as an (accused) American.
To apply for a Social Security Number or not not apply for a Social Security Number, that is the question. Whether tis better to …
What should these poor people do?
*Since Canada has the same kind of IGA as the Netherlands, France and the UK I thought it might be interesting to get the Canada Revenue Agency’s description of the Social Security Number issue. Interpret this as you will …
U.S. federal taxpayer identification number (U.S. TIN)
12.24 The U.S. TIN of a specified U.S. person that is an account holder (or a person identified as a controlling person) must be reported. However, there is a phase-in period in connection with preexisting accounts. A U.S. TIN includes:
a social security number (SSN); an individual taxpayer identification number (ITIN); and an employer identification number (EIN).
12.25 It must be reported for the 2014 to 2016 reportable years in connection with a preexisting account only if the U.S. TIN exists in the records of the reporting Canadian financial institution. If it does not exist, the financial institution must report the specified U.S. person’s date of birth if that information is in its records.
12.26 For the 2017, 2018 and 2019 calendar years in connection with preexisting accounts, a reporting Canadian financial institution that has not obtained the U.S. TIN is required to:
– review electronically searchable data for any missing U.S. TIN;
– request any missing required U.S. TIN from each account holder annually; and
obtain and report the date of birth of each account holder and controlling person whose required U.S. TIN is missing.
12.27 A financial institution must make reasonable efforts to secure an account holder’s U.S. TIN. A financial institution is authorized to ask its account holders to provide a U.S. TIN at any time regardless of the phase-in provided for in the Agreement (see paragraph 4 of Article 3 and paragraph 4 of Article 6). If an account holder does not have a U.S. TIN, the account holder is required to apply for one and provide the number to the Canadian financial institution. If the account holder does not provide a U.S. TIN, the account remains reportable.
12.28 “Reasonable efforts” means genuine attempts to acquire the TIN of the account holder of a U.S. reportable account.
Reasonable efforts include contacting the account holder (e.g., by mail, in-person or by phone), including a request made as part of other documentation or electronically (e.g., by facsimile or by e-mail); and reviewing electronically searchable information maintained by a related entity of the financial institution. However, reasonable efforts do not necessarily require closing, blocking, or transferring the account, nor conditioning or otherwise limiting its use. Notwithstanding the foregoing, reasonable efforts can continue to be made after the above mentioned period.
It is doubtful that this is a FATCA letter per se. It looks to me as though this is a standard letter that is being sent out under both the FATCA and CRS sections of the Income Tax Act. That’s why it’s somewhat vague.
The letter is NOT specifically being sent to someone who has “self-identified” as a U.S. person but has not provided a Social Security Number. When the CRS took effect in 2018, large numbers of people received CRS letters who never received FATCA letters. The reason is because banks simply “tagged” a FATCA inquiry (“Are you or have you ever been a U.S. citizen” on to the CRS inquiry (“Tell me where you are a tax resident”). CRS does NOT have the $50,000 account minimum which spared large numbers of U.S. citizens from receiving FATCA letters. The CRS inquiry has had the effect of identifying large numbers of U.S. citizens who otherwise would not have become involved in this because of accounts less than $50,000.
The fines for non-responsiveness are found in the Income Tax Act of Canada – I think that the fine for not responding to a FATCA inquiry may be only $100 (with the CRS fine perhaps higher). But, in any case, the fine is completely irrelevant and diverts from the real issue.
If you look at the information sheet you will see how the bank has blended the CRS and FATCA issues.
I do NOT interpret this as a request for Social Security Numbers at all. It is an initial inquiry that is designed only to determine whether you (1) generally are a tax resident of another country and (2) specifically if you are a U.S. citizen (making you a U.S. tax resident.
The correctness of the Social Security Number is checked at at least one Consulate on passport renewal.
I’ll admit there are two possible readings of “Our records indicate you have not provided complete information for your Foreign Tax Residency or US Person Status.”
1. Customer has provided no information at all and needs to fill out the basic form (however they see fit).
2. Customer has self-identified as a foreign tax resident and/or US person but has not provided a TIN/SSN.
The CRA fine business is likely nonsense. The letter, like the content on the CIBC site, does a poor job of disentangling CRS and FATCA.
Thank you for this post and your response.
“Poor job disentangling CRS and FATCA”, or deceptively blending the two? No mention of account closures with a lack of SSN come January 1st. Is the bank misleading US persons into believing that the CRS penalty “may” apply for not providing a SSN under FATCA? The following link can be found under FAQ “I am a US person, but I do not have a US TIN, what will happen?”. CIBC makes it sound as though getting a SSN is easy, and link you to the $500 penalty that “may” apply to not providing a TIN for CRS, here on page 4:
Furthermore, the document linked to by CIBC is dated 2016, and on page 4 reads:
Proposed. It is by no means clear that the $500 penalty even exists.
Very, very misleading, CIBC. Bad bank, bad.
Thanks for posting that link to CIBC’s letter. I notice that in the header they rattle off their latest slogan, “Banking that fits your life”, while later in the body of the letter they proceed to stick it to you.
At least I now know that CIBC banking doesn’t fit my life in the slightest. It all reminds me of TD and their stupid green easy chair campaign of a few years back.
Because this thread is about Dutch banks, I copied BB’s comment above to the FATCA thread and moved the replies to it there.
Thank you for making sure that the conversation doesn’t stray off course, but isn’t discussing how a Canadian bank deals with the same topic (the December 31, 2019 deadline for SSNs) and how it compares to other countries relevant to the conversation?
You’re right. It is relevant, and I’d forgot that the USCA even wrote about Canada in the original post. Obviously a good Labour Day weekend here in the nation’s capital. 🙂 I’ll move them back.
Thank you, pacifica.
I don’t blame your eye from labouring on Labour Day, you deserve it! Feel free to remove this comment too.
Oops, should have written “I don’t blame your eye for not wanting to labour on Labour Day”!
I recently wrote to Canada’s Revenue Minister (some may recall that she responded to me a couple of years ago when I asked whether my Canadian banking info was reported to the CRA and IRS as a result of FATCA) asking what Canada is going to do come the end of the year when the US expects FFIs to close accounts of “recalcitrant” customers considering Canada guarantees the right to a bank account. I am going to follow up with a question as to whether there is in fact a CRA fine associated with not providing a TIN under CRS rules. Anything else I should ask?
It’s always worth asking them to state publicly what they will write privately – and particularly to mention the non-collection rule.
BB You could mention that the IGA is up for renewal and of course the US is not living up to their side of the bargain.
Good suggestions, thanks.
I just found this. It’s an old article, but I don’t recall it being posted on Brock:
@ Ron regarding I.D.. The TD bank pulled up the form on the computer. We were all in the office of the bank with the business adviser for the firm for the purpose of changing signing authorities. She filled it out and checked all I.D. and then asked if anyone was a US citizen for tax purposes.
Which ID? Drivers license or was passport or anything with birthplace required?
I realize that nobody in that room would have been hiding US citizenship but it’s useful to know if the ID requirement has not changed.
@ Ron They asked for (2) pieces. They didn’t care as long as it was picture ID and recognized ID by all levels of government. The point I was making is be prepared to be asked if a) it’s trust accounting or b) it’s a business.
re :$500 penalty for refusing to present aTIN for an account ( CIBC)
The latest GUIDANCE ON ENHANCED FINANCIAL ACCOUNTS INFORMATION REPORTING (31st July ,2018) ,article 8.82(pg 104) mentions a possible $100 fine for not reporting a requested TIN. Doesn’t mention subsequent penalties if one doesn’t comply..
Article 8,33 recognizing the changing nature of the the INAs as a reason for not having an CLN was still intact..
Thanks – that’s what I suspected, just “official” ID not anything specifically showing place of birth.
Thanks for looking that up. As I suspected, the “$500 CRA fine” threat on the CIBC site is pure BS. Someone who isn’t a customer should probably complain…
The canadian court view was that no one forces you to comply nor can the IRS collect from you. Sounds valid . But what happens when our CRA fines a canadian for not having a TIN from a foreign government to which he/she has no connection to, apart from just being born there. Sounds like what Europe has gone through in a way, renounce or we ‘ll close accounts. Sounds like as time goes on ,the squeeze get tighter.Seems that somewhere in time , the issues have to go back to court..
13.09.2019. Dutch banking association in talks with U.S. officials about ‘certificate’ to address TIN issue, Helen Burggraf, AmericanExpatFinance.
Fascinating (above link by Pacifica777). I wonder if this will be done in other countries. I also wonder if “some sort of certificate that can prove that [an American bank account holder had] startedthe loss of nationality procedure” would be issued not only to renunciates who pay USD 2350, but also to those who claim to have lost their US citizenship by virtue of taking on another with that intention (but not paying the USD 2350).