FATCA and Canada

208 thoughts on “FATCA and Canada”

1. Not FATCA but FBAR related, with a Canadian connection;
   http://federaltaxcrimes.blogspot.ca/2017/12/court-of-federal-claims-sustains.html , a non-willful FBAR penalty case with some Canadian connection, though it appears no US tax was owed;
   https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2015cv1534-36-0

2. Mr. Jarnagin, a dual U.S.-Canadian citizen, and Mrs. Jarnagin, a U.S. citizen with Canadian residency status, do not dispute that they owned an account at the Canadian Imperial Bank of Commerce during each of the tax years at issue. They also do not dispute that they were required by law to file a report regarding that account with the IRS for each of those years and that they failed to do so. They assert instead that their failure to file the reports was due to reasonable cause and that the IRS was therefore barred from assessing and collecting the penalty….

   Townsend says:

   Since the Court made the decision on summary judgment assuming the facts favorable to the Jarnagins, the reasoning appears to be a legal holding that a person who did not read the return and correctly ascertain that a timely FBAR was due can never establish reasonable cause.

   Apparently they should have read the return (reasonable) and reaized from reading the return that FBARs were due (not reasonable!)?

3. Some Canadian parliamentarians with US birthplace citizenship or other (former?) US status are on this recent list;
   http://www.cbc.ca/news/politics/dual-citizenship-mps-senators-parliament-australia-1.4439522

   At least one is a Liberal.

   The article only lists some of the Canadian MPs with US birthplace or other former US status, and probably doesn’t include those with US parentage potentially sufficient to be declared USPs via parent’s US citizenship. There may be more who would be FATCAnized by their Canadian bank due to that “US indicia” if it was known and on file sufficient to turn up in an electronic USP indicia FATCA search.

   And it is interesting just how many would be affected IF their and their parents other country/ies of citizenship had an extraterritorial citizenship-based tax system like the US. Something useful to point out if contacting them about the FATCA IGA lawsuit – underscoring how it is discrimination on prohibited grounds – based solely on possessing a US national origin/birthplace/parentage.

4. Kudos to NDP MP Dusseault for latest attempt to pry information re ‘information exchange’ out of Minister of National Revenue Lebouthillier;

   Pierre-Luc Dusseault Sherbrooke, QC
   Question No. 1295
   Questions on the Order PaperRoutine Proceedings
   4 p.m.
   NDP

   “With regard to tax information exchange agreements signed by Canada: (a) how many times has the Canada Revenue Agency (CRA) obtained information from its partners under these agreements; (b) how many times has the CRA released information to its partners under these agreements; (c) for each time agreements in (a) and (b), what is (i) the country in question, (ii) the year?”
   https://openparliament.ca/debates/2017/12/13/pierre-luc-dusseault-2/

   And as usual, no useful information is forthcoming to the Canadian taxpayer from Ms. Lebouthillier;

   “Question No. 1295 Questions on the Order Paper Routine Proceedings

   December 13th, 2017 / 4 p.m.
   Gaspésie—Les-Îles-de-la-Madeleine Québec
   Liberal
   Diane Lebouthillier Minister of National Revenue

   “Mr. Speaker, with regard to parts (a) and (b), Canada currently has 93 tax treaties and 22 tax information exchange agreements, TIEAs, in force.

   Over the past six years, the CRA has had an average of 1,000 exchanges per year.

   Providing details regarding treaty or TEIA exchanges, including statistics, on the number of requests that have been received by Canada would alert taxpayers to information that could allow them to avoid their tax responsibilities.

   Confidentiality is the cornerstone of the exchange of information process because without this safeguard, our partners would be less likely to provide us with information. Treaty and TIEA partners diligently abide by their obligations. Providing this information could also be a breach of the confidentiality provisions of the ITA, section 241.

   With regard to part (c)(i) and (ii), for the reasons outlined above, the CRA cannot reveal this information.”
   https://openparliament.ca/debates/2017/12/13/diane-lebouthillier-2/

   So we still don’t have any evidence that signing the FATCA IGA produced any additional useful information for Canada from the US.

5. This article is not about FATCA or CBT but there is a brief suggestion that there should be a Citizenship Ombudsman.

   A great idea for all countries. Could Canada lead the way?

   https://www.nationalobserver.com/2018/01/15/news/canadian-citizenship-still-not-equal-all-due-ongoing-issues-legislation

6. Bare mention of FATCA in this;

   ‘Canada in International Law at 150 and Beyond | Paper No. 8 — February 2018’
   ‘Canada’s International Tax System:
   Historical Review, Problems and
   Outlook for the Future’
   Brian J. Arnold

   https://www.cigionline.org/sites/default/files/documents/Reflections%20no.8%20Arnold.pdf

7. Am reposting one of my IBS comments here because it is Canada specific – and I think it important for Canadians to be aware that some of our MPs still don’t get what US extraterritorial CBT and FATCA mean to Canadians;
   “…Easter looks like he will be working against the “impact of Trump tax in Canada”
   http://www.cbc.ca/news/politics/trump-tax-reform-canada-1.4661065

   but, it is very very dismaying that this same Liberal MP (who is now a co-chair of the Canada-United States Interparliamentary Group, ….meeting with US counterparts/lawmakers re the North American Free Trade Agreement (NAFTA) and international security issues. http://www.cbc.ca/news/politics/trump-tax-reform-canada-1.4661065 ) appears to be disturbingly ill informed about the already punitive existing US extraterritorial tax system and its serious incursions on Canadian residents, judging by a comment in a proposal he made in summer 2017 that shows he does not understand at all how US extraterritorial CBT works, and is openly admiring of FATCA – (though he shows he falsely equates the two and is apparently ignorant of the gaping unremedied double taxation traps and gaps already existing in our Canada/US tax treaty);
   “……..Those who live permanently, or almost permanently, outside Canada, do not pay taxes or have access to health care and certain other things, but do have the benefit of a Canadian passport
   that offers protections that can be costly to provide. The U.S. has an interesting approach to taxes, unique or almost unique in the world, which is taxation on world-wide income (called FATCA or the Foreign Account Tax Compliance Act, as many Finance Committee members will know). In theory, there is not to be double taxation, or there are measures to prevent, minimize, or allow recovery of double taxes……”…..
   from
   July 27, 2017
   Mr. Wayne Easter, Chair
   Standing Committee on Finance
   Sixth Floor, 131 Queen Street
   House of Commons
   Ottawa ON K1A 0A6
   Canada
   E-mail:
   fina@parl.gc.ca
   c/o: Suzie Cadieux, Clerk of the Committee
   613-992-9753
   Re: Pre-Budget Recommendation
   http://www.ourcommons.ca/Content/Committee/421/FINA/Brief/BR9073189/br-external/AmsdenBarb-e.pdf

8. https://home.treasury.gov/news/press-releases/sm0399
   ”
   Readout from a Treasury Spokesperson on Secretary Mnuchin’s Meeting with Finance Minister Bill Morneau of Canada
   May 31, 2018

   WHISTLER – U.S. Treasury Secretary Steven T. Mnuchin met with Canadian Minister of Finance Bill Morneau. Secretary Mnuchin thanked Minister Morneau for Canada’s leadership in the G-7, as well as for hosting the G-7 Finance and Development Ministerial meeting. The Secretary and Minister discussed NAFTA, and the importance of a reciprocal trade relationship between the United States and Canada.”

   No mention of FATCA or of the impact of the newest US extraterritorial tax plundering of Canada via the transition tax.
   Moral:
   If we were shakes and shingles, or metals (steel, aluminum), we could get our own Finance Minister to listen, but we’re only ordinary compliant Canadian taxpayers, so we get no access and no redress.