Last week a U.S. appeals court confirmed an earlier judgment that the plaintiffs “lack standing” in their case against FATCA. I thought this news deserved its own post.

In response, Republicans Overseas has declared its firm intentions to prosecute this matter all the way to the Supreme court.

cross posted from citizenship solutions

In an earlier post I explained why the Canada Revenue Agency assisted the IRS in collecting a $133,000 U.S. dollar penalty on a Canadian resident. The bottom line was that he was presumably NOT a Canadian citizen and therefore did NOT have the benefits of the tax treaty. This post is to explain where the penalty came from in the first place.
 
Will you walk into my parlour?’ – #Americansabroad and IRS “amnesty” offers in the 2009 #OVDP
 
 
It has been widely reported that a U.S. citizen residing in Toronto, Canada since 1971, paid a $133,000 U.S. dollar penalty for failing to file IRS forms disclosing that he was running a business through a Canadian corporation.

How did this fly get caught in the spider’s web?

The Spider and the Fly is a poem by Mary Howitt (1799–1888), published in 1829. The first line of the poem is “‘Will you walk into my parlour?’ said the Spider to the Fly.” The story tells of a cunning Spider who ensnares a naïve Fly through the use of seduction and flattery.
The poem is a cautionary tale against those who use flattery and charm to disguise their true evil intentions.

The Spider and the Fly: Some things never change … https://t.co/GvSvoO7sO5 pic.twitter.com/fZC8pPZGuL

— Citizenship Lawyer (@ExpatriationLaw) August 13, 2017

More here

cross-posted from citizenship solutions

Introduction – Guest post by a perfectly ordinary person who renounced U.S. citizenship for perfectly ordinary reasons

In a recent submission to Senator Hatch I argued that what the United States thinks of as “citizenship-based taxation”, is actually a system where the United States imposes U.S. taxation on the residents and citizens of other countries. That submission
included:

On July 4, 2017, Americans living inside the USA celebrated the “4th of July” holiday – a day that Americans celebrate their independence and freedom.

On that same day, I had meetings with SEVEN American dual citizens, living outside the United States. This “Group of Seven” were in various stages of RENOUNCING their U.S. citizenship. Each of them was also a citizen and tax paying resident of another country. They varied widely in wealth, age, occupation, religion, and political orientation. Some of them have difficulty in affording the $2350 USD “renunciation fee” imposed by the U.S. Government. Some of the SEVEN identify as being American and some did NOT identify as being American.
But each of them had one thing in common. They were renouncing their U.S. citizenship in order to gain the freedom that Americans have been taught to believe is their “birth right”.

On August 2, 2017 posts at the Isaac Brock Society and numerous other sources, reported that that there were 1759 expatriates reported in the second quarter report in the Federal Register. The number of people renouncing U.S. citizenship continues to grow.

Now on to the guest post by Jane Doe, which is a very articulate description of the reasons why people living outside the United States feel forced to renounce U.S. citizenship.

John Richardson

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See the U.S. Constitutional analysis of FATCA article Neill has found.

From the document:

“…The FATCA reporting requirements arguably resemble that of a general search warrant. It was enacted in order to curb tax evasion of U.S. citizens using foreign accounts.

However, while the information reported can be useful to the IRS in confirming the income reported by individuals, there are no particularized suspicions in collecting this information from every foreign U.S. account.

Doing so assumes that every U.S. citizen with a foreign account is a “crook” evading his taxes.201

Additionally, the searches at hand contain the potential for abuse. This is due to the “access to this information without invocation of the judicial process.”202

The scrutiny of a neutral magistrate helps to balance societal and individual interests in the collection of the information at hand.203

Without a warrant issued through the judicial process, the search is an unreasonable violation of the individual account holders’ Fourth Amendment rights…”

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This is an update on our FATCA IGA legislation lawsuit in Canada Federal Court.

The Court ordered (May 31, 2017) that Plaintiffs provide:

— Additional personal, detailed documents related to their financial affairs. [Our litigators felt that this request was not relevant to the lawsuit or of tenuous relevance to the issues raised in the action, but Court disagreed.] Plaintiffs have now provided to the Defendants the financial documents and the Court has ruled that these documents will be kept confidential.; and

— A list of harms that the Plaintiffs know and allege have already occurred or certainly will occur. [Description of harms that might occur will be provided in a later submission.}

The harms listed in the submission are generally those detailed by the Witnesses. I am not going to provide the names of the Witnesses associated with their particular situations, but show below a brief summary of some of their harms without names disclosed.

SELECTED HARMS:

--- Harm associated with sharing of account information with United States. Plaintiffs allege that financial accounts of Canadians have been shared with United States and that this constitutes a harm. However, with one exception (name of person who received confirmation of turnover from Revenue Minister listed in document) Plaintiffs have no direct knowledge whether their own account information has been turned over nor do they know names of those who have had their accounts turned over --- that information is in Canada’s possession.

To the extent that these financial documents have been turned over, Plaintiffs allege that this violates their right to the security of person shrined in section 7 of Charter and the protection of Canadian sovereignty, and is a violation of section 15 of Charter.

Other Witness and Plaintiff harms (not all Witnesses or harms are listed below):

--- Business Person who is Canadian and U.S. citizen. Would-be Canadian partners are unwilling to have potential financial and shareholder information disclosed to U.S.

--- Canadian and U.S. citizen harmed by U.S. IRS PFIC costs taxing away gains. To eliminate harm she had to spend monies to renounce U.S. tax citizenship. Suffered psychological harm when filing forms with FINCEN, knowing possibility of large fines if there were ever to be an erroneous mistake. She feels as if she is guilty of a crime she has not committed until proven innocent.

--- Canadian and U.S. citizen on disability harmed by U.S. personhood. On disability benefits, can’t afford to become IRS compliant or renounce U.S. tax citizenship. Not being compliant with IRS exacerbated psychological harm associated with precarious financial situation. This has created conflict within family as he is unable to speak to family member about situation without family member becoming upset.

--- Canadian citizen mother trying to protect incapacitated son deemed only by the U.S. to be U.S. tax citizen. She has suffered psychological harm insofar as she has had her peace of mind taken away and has difficulty carrying on with normal life because she is unsure of her son’s wellbeing in future after she passes away. Has resulted in breakdown of relations within family.

--- Pure Canadian spouse of Canadian citizen who is deemed to be a U.S. person only by the U.S. Spouse received bank letter asking citizenship question on account with U.S.-tainted wife. This places spouse at disadvantage compared to those not married to persons deemed to be U.S. citizens.

--- Canadian citizen and formerly person deemed to be a U.S. citizen. Business partners expressed feelings that she compromised their business by sharing financial information with U.S. To escape harm she paid the costs to renounce U.S. citizenship. Feels that Canada has treated her as second class citizen.

--- Canadian citizen deemed ONLY by U.S. to be U.S. citizen having entity account. As part of the roundup in Canada of all Canadian citizen “entity” account holders who have U.S. taint, she received letter from bank asking for information on citizenship...

--- No CLN, we freeze your account Canadian citizen - deemed by U.S. to be U.S. citizen. It is sometimes claimed that Canadian financial institutions do not freeze accounts if there is a FATCA problem. Not true. This unfortunate Canadian citizen had her account frozen because her proof of no U.S. taint was not good enough: She lacked a CLN (Certificate of Loss of Nationality) that her bank required.

--- Infant receives request from bank to provide information on birth place and U.S. citizenship in order to continue holding account. [Self-explanatory.]

Other: Psychological harms are mentioned including feeling betrayed by the Canadian government, stress and frustration associated with the financial harm, and harm by simply not knowing whether or when their financial account information will be shared with the United States.

—– The brave Plaintiffs and Witnesses are my heroes for standing up for Canada and its sovereignty. I thank the other Canadians who also bravely volunteered, but were not selected.

—– NEXT STEP: In oral testimony Plaintiffs will be examined by Government attorneys, beginning with Gwen at the end of this month…

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