US expat tax and FBAR: Discussion thread (Ask your questions) Part Two
Please ask your questions here about US Expat tax and FBAR.
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NB: This discussion is a continuation of an older discussion that became to large for our software to handle well. See US expat tax and FBAR: Discussion thread (Ask your questions) Part One.
bob……find a “local client base” credit union….you may have to ask the manager to confirm that they are in fact “local client base” move your bank accounts to this credit union and get on with your life.
i had to get my local credit union manager to call her head office to indeed confirm they were such. there is so much confusion out there about fatca my local branch manager was not clear on exactly what “local client base” actually was.
like others here have said there is no one size fits all solutions to this mess.
read lots here, ask questions about your situation and make up your own mind as to what is best only for you and everybody will have slightly different situations and risk tollerances.
as for me i have no reason to cross the border ever again, no family there, no need to buy gas there, no need to be a tourist there ever again. the last address i ever had in america was at age 6 in 1966. they have no idea who or where i am.
i have my certificate of canadian citizenship in my saftey deposit box and my canadian passport with a usa stamp in it from one of my visits there 10 years ago along with it.
were my bank (where i still do have a couple of accounts) ask me my nationality they would be greeted with “that is a racist question. are you a racist?” i would then explain that in 1980 when i got my canadain citizenship there was no such thing as a cln and i refuse to pay the $2,350 u.s.d. to prove something i am not.
determine your risk tollerance and make your plans and decisions accordingly and then get on with your life.
@Bob were you born of Canadian parents or did you gain Canadian citizenship later through naturalisation? If the latter then you have a case for applying for a relinquishment, assuming you haven’t used a US passport, voted in a US election, etc. If this was done before June 2004 then there is also no exit tax regime you would need to go through.
As others have said, take a deep breath, slow down and research like crazy before you make any decisions. There’s no quick, easy fix and each individual will have a different answer according to their personal circumstances so there’s no one solution fits all. Not wanting to sound nosy, but the more you can tell us of your personal circumstances then hopefully the more tailored our advice back to you can be. But ultimately it’s up to you to decide which course is the best one for you which is why you need to research all your options.
@bob
There are other relinquishing acts that you may have already performed to lose your US citizenship, (apart from Naturalising as a Canadian).
Have you ever held a Canadian Government job?
Have you served in the Canadian armed forces in any officer capacity?
But as Medea says you should not have used your US passport or voted in a US election since doing any of these.
@Bob, there is also a philisophical side to this, and I am not a philosophy guy… Anyays, ever hear of “The Tao of Pooh?”
I shall begin with what I have developed as The Tao of US Citizenship.
I am brutally serious because you must FIRST come to your self indentity in all this before you do ANYTHING else.
Let me start with a fact that I think all Brockers agree with. The era of the Ex-Pat American is d-e-a-d. A long term resident outside the USA who has the sole citizenship of the USA is up the creek and without a boat.
You used a term that is a bee in my bonnet and that is “dual.” Frankly, dual citizenship does NOT exist in the law of Canada other than you have dual citizenship as a Commonwealth Citizen which is recognized in law.
It is an “american thing” to call oneself half irish, one quarter polish and one quarter german.
I have learned much from Ginny and Gwen in my quest for inner harmony as they reject all foreign citizenships “given” to them by any foreign government. Maple syrup runs through their veins, they are solely and absolutely Canadian regardless of any foreign laws.
When you visit the USA how do you identify yourself? This is very important for multiple reasons.
Once you are comfortable as to who and what you are, you can then find a path forward.
Regardless of what any foreign government claims, if you do not recognize their claims nor want what they are offerring, your decision making will be easier.
Regardless of what any foreign law says, in Canada you are solely and absolutely a citizen of Canada.
With that in my mind, you decide the path you will walk.
If you have no need to ever go to a certain foreign country and have no investments there, that will influence your path.
@George. I basically agree with what you said above but there is a problem. In fact, dual citizenship does now exist in Canadian law because our own Canadian government has allowed the US to define certain of our citizens as “US persons” via the IGA. Our government not only allows it, they even now allow US citizenship to trump the Canadian citizenship of these people.
I absolutely agree that one must first decide their own identity and if that means rejecting any and all foreign government claims, then so be it. Your point about self-identity when entering the US is well taken. I personally had to argue with US border officials the last time I visited there. They claimed I was still a US citizen by reason of my birthplace and the fact I hadn’t appeared before a US consular official and sworn the oath of renunciation. I had to insist that the official renunciation process was not the only way one could lose US citizenship and I had lost it by other means. They eventually gave up and allowed me to enter on my Canadian passport. While it was stressful at the time, I am now glad that, in effect, they accepted that I am solely a Canadian. In my mind I am 100% Canadian and I refuse to allow either government (or a bank, for that matter) to define me as a “US person” for tax or for any other purpose. (I would certainly not have any problem answering “no” if I were asked if I am a US citizen by a bank.)
@ Bob, Heidi, Mettleman:
It’s true that in Canada, your money is safe in a Local Client Base credit union. That is for checking, savings accounts, etc. Only problem is investments. These LCB credit unions usually have an investment firm associated with them. For example, Vancity credit union has Credential investments. These investment firms will ask for your “US personhood status” and are fully FATCA compliant, no loopholes here.
@patcanadian…..thanks for that information I did not know that.
I have some rrsp’s with a private local broker who I have been dealing with for 20 years. when I first learned of fatca over 3 years ago I had a conversation with him and he said don’t worry about me asking anything. and life then went on.
late last year I opened up another account with him and with out realizing it they had to do all the paperwork again because it was a new account. on this application it asked the American citizenship question and I did what I thought best. I of course lied on the form and they smiled at me and life went on.
I have employer contributed rrsp’s held with one of the big 5 banks and was in there about 18 months ago having to re sign all the paperwork. when I was there the printer was on the fritz so they could not print out any forms. the very helpful bank lady said I will bring them by your work and you can sign them. she did and as she came at a very busy time for me she missed going over them properly and checking the American box. far be it for me to point out her mistake. I would have lied anyways but hey…..
it is sad that this is the way we have to live but it is the new normal……
@Bob
I appreciate how confusing it is when you first come across the recognition that you are in the same situation so many of us are. There is good advice here. And the best is, take your time. It does sound confusing at first, sit yourself down and take it slowly. There are more options than you think, some are land mines, a lot are not.
The one thing you can be assured of is: you have time on your side. No one has been jailed yet. Nor do I believe anyone will be. Gather information and begin your assessment slowly.
If you have just come here recently, may I introduce myself. I am one of two plaintiffs, born in the USA who are fighting on behalf of Canadian citizens. We hope to be a resource for others. Many countries have signed on to different IGAs, as you know. Depending on where a person resides, banks treat their customers differently.
I am in the camp of doing nothing. By that I mean, as a citizen of Canada, I do not recognize a foreign country’s jurisdiction over me. I am not the only one who takes this approach.
I am not suggesting it should be your approach either. We each have extenuating factors.
Fear robs people of time. Fear can cripple. Fear can turn you into a person that you would not even recognize as yourself.
I am not fearful. Nor is my co-plaintiff Gwen. We began our risk assessment of how FATCA would affect our life by asking ourselves: who are we? This is by no means a slight question.
Our answer were we are Canadians. With all the rights that entails even if we have to fight to enforce them for ourselves and others.
You are not alone. You will reach a decision as to the approach that best works for you. Step one is: are you really a US person for tax purposes. That takes exploration.
If you ever have a chance to attend an information meeting that John Richardson (see side bar) offers, I think that would be a good place to start.
Welcome to Brock. And be not afraid.
@Canadian Ginny
What is it Obama fears in you that he would propose a different exit for people just like you, the “accidental American”, knowing full well that there’s no hope in hell that anything like that will ever happen?
@BB, maybe he just likes to watch Brockers fight amongst themselves. As I recall some were really opposed to letting the ‘accidentals’ go as they feared this could weaken their case against CBT.
Well, I’m not about to indulge him. Cheers, WK!
@BB, glad to see you have changed your mind.
Is anyone interested — email from Phil Hodgen:
Hey, it’s Phil Hodgen with a special request.
I need your help.
I am co-chair of a massive tax conference (with Kip Dellinger). And I’m kind of scared. :-/
Help Needed
I need topic ideas for a big tax conference.
And I need suggestions for speakers. Yes, you can shamelessly promote yourself as a speaker.
If you have ideas for what you would like to hear at a tax conference, please hit “reply” and send me an email.
Explanation follows.
2.5 Days of Tax Conference, Live and Webcast
The California Society of Certified Public Accountants has a major tax conference scheduled for November 2 – 4, 2016. It is a half-day on Wednesday, and full days on Thursday and Friday.
The conference will be live in Burbank (Los Angeles area). It will be webcast live, and available for download later.
What’s really cool about the way CalCPA does this? There are more sessions than you can possibly attend. No problem.
CalCPA gives you access to the recorded webcasts for all of the sessions. Stream the sessions you missed (or want to see again) anytime you want.
You can’t miss out, even if there are two sessions going simultaneously and you wish you could be in both places at once.
Three Conferences in One
Think of this as a mash-up of three of CalCPA’s stand-alone conferences:
Tax Update and Planning Conference. This is designed for practitioners who need a “latest developments” firehose, as well as selected planning topics.
Real Estate Conference. Real estate tax topics. ‘nuf said.
International Tax Conference. A full day of international tax topics specifically concentrating on cross-border tax issues important to humans, families, and entrepreneurs. This is my baby. 🙂
The idea is to give a massive amount of choice. If you are a real estate practitioner but you see an international tax topic that matters to you, it’s easy. Just walk into the room and listen. That’s the idea. Cross-pollination. Choice is good.
What Topics Matter To You?
We need to fill these slots:
16 hours of domestic tax updates and domestic tax planning topics.
Probably 10 real estate topics.
Probably 10 international tax topics.
That’s hardcore. That’s why we really, really need to know what matters to you.
Even if you cannot attend the conference (and I hope you do attend), please tell me what matters to you. What is driving you crazy? What do you need to learn in order to make your life easier?
Who Can You Suggest as a Speaker?
We want great speakers. Every one of you knows what it’s like to sit through dull presentations, and we all hate it. And unfortunately, it is sort of anti-marketing for the speaker.
Tell me about speakers that have impressed you — people who know their stuff and can connect with the audience Note: it might be you.
We actively seek new speakers for the CalCPA conferences. This is a big, big conference with hundreds of people. If you want to start small and practice your craft, we will find ways for you to do that. But if you think you are ready for the Big Time . . . .
For an idea of what it means to be a good speaker, here are a couple of podcasts from Manager Tools on great presentations.
Foundations of Presenting Mastery, Part 1
Foundations of Presenting Mastery, Part 2
(I aspire to that level of mastery. Someday . . . )
By the way. Manager Tools is one of the few podcasts I subscribe to. Highly recommended.
Email me, please
Please email me. Just hit “reply” and start banging away on the keyboard.
What have you been dying to hear about at a tax conference?
Who should talk about that topic?
Thanks for your support,
Phil.
A Swiss bank is demanding an FBAR form for 2009 and an 8854 from a client who renounced last year. Unfortunately the FBAR doesn’t exist, and the 8854 might not be entirely…ahem…accurate. The client held the account from 2009 to present, but has thus far refused the bank’s requests. The bank is a category 1. Can the bank freeze the account? If it does, is there remedial action the client can take in Swiss civil court? Client has EU citizenship, zero assets in the US, and no intention of ever setting foot there again.
Many thanks for any input…
underscore9
@underscore9, didn’t you ask this before?
Short answers – 1) yes, they can and 2) no, I don’t think so. Whatever, the bank will report the account to the IRS as wilfully non-compliant, whether they decide to freeze it or not is up to them, but given how scared they were before FATCA even came into operation I wouldn’t be surprised if they do. The banks can demand what they like in the way of proof of US compliancy. PostFinance wanted to know if I’d entered a OVDP if I wasn’t already compliant and I also read that back in 2011-2012 Credit Suisse were asking for 5 years of US tax filing returns as proof.
Hi Medea, no, my first post here…I believe there was a fairly recent case in Zurich Commercial Court where the bank’s freezing of assets (similar scenario but much bigger numbers involved) was ruled against and they had to pay court costs as well. I think the bank was planning to use the frozen assets as payment for FATCA fines. I suppose I could give them pieces of paper since there is zero chance of ever returning to the US. I doubt they’d spend the money for extradition.
Might be the easiest solution as I expect the bank will just file them. It’s the paperwork to cover their own backsides that they want, I doubt they’re going to compare your 8854 with your bank statements to check their accuracy.
The problem could be getting a paper copy of an FBAR as they’ve been done electronicially since 2015. If you haven’t already got your 2009 copy not sure what you’d do.
@underscore9:
I feel certain that the client simply misplaced his/her copy of that paper 2009 FBAR he/she filled out and mailed to the States in 2010. Right? So I guess what needs to be done is to have the client fill it out again, preferably by hand, which was still permitted back then. From time to time I filled out my FBARs by hand because I figured those nice data entry clerks at the Dept of Treasury needed job security, as well as extra practice with recognizing different handwriting styles. The latter skill used to look good on a resume. But I digress.
Then have a hard copy made and given to those nice folks at the client’s Swiss bank.
To re-create the lost 2009 FBAR, the client will need that particular blank (electronic) FBAR version valid for 2009. It has “Rev. October 2008” on it. Back then it wasn’t a requirement to e-file the FBAR. I sent my 2009 FBAR via snail mail because I also strongly believe in giving job security to the folks who work for the efficient U.S. post office. But mainly I snail mailed the form because I knew that IT security at these U.S. organizations is and was absolute crap. Sorry, I’m digressing again.
Anyway, I’d bet my 2009 FBAR is gathering dust in some huge warehouse that is also housing a jillion other pieces of paper. Your client’s mailed-in 2009 FBAR is probably in that very same place. What an enormous waste of trees and taxpayer money.
@Seeing Red – “To re-create the lost 2009 FBAR, the client will need that particular blank (electronic) FBAR version valid for 2009. It has “Rev. October 2008″ on it. ”
There seems to be a pdf of a 2009 TD F 90-22.1 at https://www.ffiec.gov/bsa_aml_infobase/documents/forms/f9022-1_fbar.pdf
Thank you, iota! I knew there’d be a friendly Brocker on here who would find the original blank 2009 FBAR for underscore 9’s client. 🙂
@underscore9
Why on earth would a Swiss bank have a right to ask for your 8854! Their agreement is to report account values not your total wealth.
Send those Post-Faustus people a ‘copy’ of your 2009 Fbars, then take your money along with your CLN and go elsewhere.
Post Finance used to be a great federal post office bank, low fees, efficient and helpful. They would send me chocolates at Christmas…no kidding. They then decided they wanted to become a private bank and invest in US stocks…they made a pact with the devil and I hope it comes back and burns them.
@heidi: Although the U.S. was the bully who started this global fight, I agree wholeheartedly with you about Post Finance, and every other bank around the world that made a pact with the devil/bully and decided to give into the bully’s demands. Hope it comes back and burns all of these banks to the same degree that this crap has burned all of us U.S. persons for tax purposes trying to live halfway normal lives outside of the United States of Hysteria.
“Hey, it’s Phil Hodgen with a special request.
I need your help.
I accidentally deleted all of the well thought out, carefully worded comments kindly posted by readers over the years. All of the time that they wasted in making their sincere efforts have been wasted.
Now I need your help to remember what you posted before, spend more precious hours reconstructing your comments, and posting them again by clicking on … ummm … errrrr.
Oh, I guess I don’t need your help after all.”
“From time to time I filled out my FBARs by hand because I figured those nice data entry clerks at the Dept of Treasury needed job security, as well as extra practice with recognizing different handwriting styles.”
I don’t think Monica Hernandez has job security after her excellent performance at data entry, and some of her cohorts have been arrested too, but the ring leaders are likely still doing well.
“I sent my 2009 FBAR via snail mail because I also strongly believe in giving job security to the folks who work for the efficient U.S. post office.”
Like those who lost three of my registered letters to the IRS, and one of my wife’s registered letters to the IRS, neither delivering them nor returning them? Or like those who spent 60 days transporting one of my registered letters from a Washington DC post office to Court of Federal Claims, and those who spent 36 days transporting a different one of my registered letters from a New York NY post office to a Washington DC post office? Canada Post can take comfort now in seeing that their own horrendous track record has now been outdone.
“But mainly I snail mailed the form because I knew that IT security at these U.S. organizations is and was absolute crap.”
Their IT security is still managed by cohorts of Monica Hernandez and still includes data entry from paper.
@Seeing Red: Thanks very much for the input. Client is having a conference call with the bank next week, we will see what they say. Literally the first direct communication with them since ’09. The concern is they simply freeze everything, which leaves him zero resources for food, lodging, medical care etc., not to mention for attorney’s fees if it comes to that. It’s a Cat 1 FFI, private, and getting quite aggressive.