Author Archives: Joe Smith

Has anyone heard anything new on Alterna being exempt from FATCA reporting?

http://maplesandbox.ca/2014/are-other-canadian-credit-unions-being-as-responsible-about-fatca-as-vancity/comment-page-1/#comments

I am delighted and, as a roughly-35-years member, proud to report that Alterna Savings and Credit Union. formerly CS Co-op and formerly mainly in Ottawa but now I believe with branches elsewhere in Ontario, IS IN FACT A LOCAL CLIENT BASE FINANCIAL INSTITUTION UNDER FATCA even though it has assets of more than $2 billion.

I received today the following reply to my query (from two days ago) to Alterna, which I quote in full as it is (at my request) classified public information by them in their reply. This is a full copy-paste minus only my personal identifiers.

“Thank you for contacting Alterna.

“In response to your email, Alterna Savings is a full-service, member-focused and community-based financial co-operative with over $2.4 billion in assets and we must comply with all applicable laws and regulations under FATCA since July 2014. In order to minimize the impact to our members, Alterna registered as a Local Client Base Financial Institutions, and we are only required to collect information and report on member accounts held by non-Canadian residents that are considered a U.S. person.”

(BTW I appreciate that a phrase in that last sentence, “non-Canadian residents,” could be interpreted as persons resident in Canada but not Canadian citizens, OR persons not resident in Canada that are considered US persons. The correct interpretation is the latter, according to the CRA website’s FAQ mention of Local Client Base institutions, which is much clearer. CRA says a Local Client Base institution “will not be obliged to apply due diligence or report on accounts held by individuals who are Canadian residents.” I.e., Canadian citizen or not, doesn’t matter, they don’t get reported.)

For whatever reason or oversight, Alterna doesn’t actually mention their Local Client Base status on their FATCA webpage. I’ve written a reply strongly urging them to correct that oversight. Last I checked, their webpage says they must comply with all applicable laws and regs, but they stop short at mentioning the Local Client Base etc after that in the above quote. Ridiculous; with that extra sentence they likely will attract significant business away from local chartered banks, not mention putting at ease the minds of so-called US persons resident in Canada who already have accounts with them. I mentioned these points too.

FYI, I wrote to them “on behalf of several US-origin friends” mentioning in parenthesis that I am a Canadian citizen and NOT a US citizen nor US resident for US tax purposes (I’ve had a CLN since 1976, actually). So I figured there’s absolutely no risk to me of asking the question about Local Client Base status.

Since I know some folks are nervous about even writing queries like this as possibly “outing” themselves, I would urge all readers of this thread who already have a CLN, are thus not even slightly at risk, and who also are members of any credit union, to do as I’ve done and ask your credit union, on behalf of US-origin friends and fellow members, whether they’ve registered as Local Client Base and, if not, exactly why not. And report back on this thread. As a member and voter of the credit union it’s your absolute right to demand to know this, and to demand to know why the hell they haven’t registered as such if they haven’t. It’s your organization, its board owes you a reply.

ASK SPECIFICALLY whether your credit union has registered for Local Client Base status and, if not, why not. If Alterna’s staff were dense enough not to realize the importance of mentioning this on their website, maybe other credit unions don’t get that point (and might even neglect to mention this in an email reply). Don’t just ask if they’re complying with FATCA; even Alterna has said that (see above). Go the extra step and ask specifically about Local Client Base registration. Others haven’t until now, and as a result there has been some mis-information on this and other threads that Alterna might be reporting accounts of Canadian-resident holders. THEY WILL NOT BE DOING THAT.

BTW maybe there are some good reasons why some credit unions can’t register, but I know for a fact that Alterna has for some years now provided US-dollar accounts in our local branches and also their ATM cards link with Cirrus and Interac (as well as The Exchange, Accel, and Coop Network) ATM networks. Cirrus and Interac are definitely world-wide, I’ve used my ATM card from Alterna to get local cash from ATMs in the US, Germany, Greece and Switzerland with no problems. Neither of these services seem to be any impediment to Alterna’s Local Client Base status.

Also BTW, a number of months ago I inquired whether someone not a resident of Canada could open an account with Alterna (claiming I was asking on behalf of a visiting friend from the US) and was politely told that Alterna can’t legally open accounts with anyone who doesn’t reside in Ontario. So I don’t know who they in fact would ever have to report to CRA and IRS, unless maybe Ontario-resident members who later move to the US but keep an account here for visits might be allowed to keep the account open. Or maybe snowbirds who screw up and stay in the US longer than 180 days or whenever it is when suddenly you’re US-resident-pumpkin for tax purposes under IRS regs.

Anyway, great news for anyone living near an Alterna branch in Ontario! And BTW I’ve been a very happy member and client of Alterna since the late 1970s. I can recommend them without qualification, in terms of service and convenience. Maybe not quite in the completeness of their current FATCA webpage, though, but I hope they’ll fix that …

What do people think will happen if a “US Person” Canadian citizen gets their bank records sent on to IRS?

The IRS and its inadequate ‘amnesty’
Sunday, June 22, 2014

The U.S. Internal Revenue Service’s announcement last week that it is extending its tax amnesty program for American citizens living abroad is more a reminder of the unfairness of U.S. tax laws than it is a welcome relief. As many as a million Canadians – not to mention millions more people around the world with dormant U.S. citizenship – are liable for taxes and penalties that are patently unjust.

The U.S., unlike other countries, demands that its citizens file income taxes and make annual declarations of holdings in foreign banks, regardless of circumstances. Even a Canadian who was born in Florida 50 years ago while his or her parents were on an ill-timed one-week vacation, and who has never since lived or worked in the U.S., is as obliged to report to the IRS every April.

Many millions of people around the globe are U.S. tax delinquents, even if they don’t owe a penny in back taxes, thanks to fair and sensible international tax treaties. They have never paid U.S. income tax, either because they were unaware they should, or because the IRS simply didn’t seem to care.

For more see article here.

U.S. tax deal jeopardizes Canadians’ privacy: Tim Harper

New Democrats are calling on the Conservatives to acknowledge the concerns with the U.S. Foreign Account Tax Compliance Act (FATCA) and agree to remove it from Budget Bill C-31.
“Despite broad opposition, the Conservatives are charging ahead with the implementation of this agreement,” said NDP National Revenue Critic Murray Rankin (Victoria). “Serious concerns remain about the potential violation of privacy and constitutional rights, as well as unknown costs to Canadians.”
Bill C-31 moves to implement the Canada-US intergovernmental agreement on the FATCA and also to grant the Minister of National Revenue sweeping powers to make any regulation necessary to carry out the agreement.
“How can the Conservatives justify burying this agreement – that could negatively affect 1 million people and that has nothing to do with the budget – inside a 359-page omnibus bill,” said NDP Finance Critic Nathan Cullen (Skeena—Bulkley Valley).”There’s no excuse. FATCA must be removed from the budget so it can be properly scrutinized.”

http://www.ndp.ca/news/conservatives-must-remove-fatca-budget-bill

This is the way I see the immediate future.

1. Continue our lobbying and support for the Charter Challenge;

2. Get our personal situations in order regarding the $50,000 thresholds and plans to cross or not cross the border — many solutions are possible;

3. Clarifying the Credit Union story [if they are indeed excluded because of the 2% rule this is a great chance to move the equity agenda forward and nail the banks]; and

4. Sit back and wait to see the storm that arises when 1,000,000 Canadian citizens — most of which are still probably oblivious to all this — are thrown under the bus.

Let’s meet at L’espresso Bar Mercurio, 321 Bloor Street W Toronto, ON M5S 1S5, southeast corner, Bloor St. West and St. George. Event is 6:00 PM nearby. So meet at 4:15-4:30 PM. I will ask for a space at Mercurio. May still be spaces still available at conference. I made a reservation for 15 people.  The food is lunch-type sandwiches menu, casual and they are definitely open. Reservation made under Isaac Brock Society and/or “Dennis”  See you then!!!
http://ccla.org/pathways2privacy/

Finland 1940

We are now refugees
in Finland.

My little daughter
Returns home in the evening complaining that no child
Will play with her. She is German, and comes
From a nation of gangsters.

When I exchange loud words during a discussion
I am told to be quiet. The people here do not like
Loud words from someone
Who comes from a nation of gangsters.

When I remind my little daughter
That the Germans are a nation of gangsters
She is glad with me that they are not loved
And we laugh together.

Bertolt Brecht

Dear xxx:
You keep sending me the same message. I am not sure why since the answer to your rhetorical question is obvious – FATCA does affect all people living in Canada who were born in the USA and retain their citizenship or never had it taken away.

Regards,

Jim
James Turk
David Robinson

James Turk <turk@caut.ca>

David Robinson <robinson@caut.ca>
———————————–

Date: 02/05/2014 02:42PM

Subject: This CAUT member wants an answer.

Under the agreement, financial institutions in Canada will not report any information directly to the IRS. Rather, relevant information on accounts held by U.S. residents and U.S. citizens (including U.S. citizens who are residents or citizens of Canada) will be reported to the Canada Revenue Agency (CRA). The CRA will then exchange the information with the IRS through the existing provisions and safeguards of the Canada-U.S. Tax Convention. This is consistent with Canada’s privacy laws.

http://www.fin.gc.ca/n14/14-018-eng.asp

Jim, tell me again how FATCA doesn’t affect the hundreds (thousands) of CAUT members that were born in the USA?