FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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Austria Boarding The FATCA Train
As acceptance spreads, FATCA is now close to achieving critical mass. It has even spawned its own European Union tax exchange model. As the U.S. program gains steam, other countries are using a similar approach to insure their own citizens don’t try to evade taxes by hiding money offshore.
Given this backdrop, Austria’s decision to cooperate with the U.S. is not surprising. Chancellor Faymann said earlier this spring that Austria was pursuing “a clear, constructive path in the fight against tax evasion.” Austrian authorities had also previously declared that Austria would require shell companies and trusts to declare their beneficial owners.
Why is it that local banks are totally unaware of FATCA? I asked a financial planner at BMO if she heard any news about FATCA and just got a blank stare. She said she never heard of it. Why is it not widely known?
Good question, banany. Why is this? It appears that BMO (and other Canadian banks) are not properly training their bank personnel — ALL of them should know so as not to look stupid in their incredulity when we ask that question.
Read page 3 of BMO/Nesbitt Burns (investment arm of BMO) http://www.bmo.com/pdf/nesbitt/PerspectiveSpring11English.pdf
I had the same experience. Bank underlings have no idea about FATCA.
I have also had this same reaction …I was wondering once I have my CLN, should I go to the banks and give them a copy..I have given my passport as ID to these banks…One I have had since I came here in 1969 so there may have been info that I am US person already….
And I just love how the banks and financial institutions speak so naturally about FATCA on their websites. Like it’s the most natural thing to ferret out certain individuals and report all off their private data to a foreign government.
northernstar,
NO!
@Northernstar
I would wait until the bank asks for it, or until we have a signed IGA. I checked with my bank already and they have no idea of of national origin. I came to Canada a a child.
@banany and @Calgary411
“Why is it that local banks are totally unaware of FATCA?”
I can tell you (as I am a recently retired investment advisor from a Major 5 bank)..
They haven’t built it into their compliance yet as they are not operating officially physically as an entity in the US (they have subsidiaries like BMO Harris, which wouldn’t backtrack up to the parent). However over the last decade compliance departments have been gradually requiring Passports or 2 forms of Photo ID as a measure of Identification…some forms I used to see are now requiring Passports where none was there before and all ID’s need to be updated every 5 years…
Where I ran into the problem of FACTA personally was when I retired last year and moved my personal Investment accounts to TD WATERHOUSE as I also had bank accounts at TD and wanted to use their self-service investment trading systems…Because TD Waterhouse is registered IN THE US…It’s compliance department seized upon my Canadian Passport showing a US place of Birth…That it turn triggered them to FREEZE my accounts until I signed a “W9” and a “Limitations of Benefits” form.
The W9 is a Taxpayer Identification Number form
The Limitations of Benefits is a Waiver of Client Confidentiality
I immediately told them I had no SSN and wasn’t a US Citizen and they had no right to provide any information on my accounts (now affecting my banking accounts,as well, as they were tied to the trading accounts for cash transfers) to the US as this would be a breach of the client conficentiality act…(besides it would include my CANADIAN born wifes affairs as well)
They explained to me that the TD Waterhouse was required to do this as they were REGISTERED in the US and were subject to substantial US penalties under FATCA…
I had them transfer my accounts back to my original bank…and only allowed them to deal with my Canadian-Born wifes “personal single named accounts”…Meanwhile, they are waiting for me to provide proof of my Loss of US Citizenship before they will happily transfer in my accounts…Thus my journey into the CLN search to which I had to educate myself and my Lawyer…
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@ Benedict Arnold be me
That is a very disturbing story. Did this apply to all accounts (savings/chequing) or did it only apply to accounts that had US source income (ie securities/US investments)?
All accounts…
Joint
RRSP’s
TFSA’s
and they flagged my Banking by default as well..(which I insisted they remove as they transfered out my trading accounts…but I see through my wifes link to TD this morning (8 months later,) the reference is still pegged there “US Online Banking” which we have never done before and didn’t exist before this incident.
@Benedict Arnold be me
You should inform the Ministry of Finance and Kevin Shoom. These are the types of horror stories that we hear coming out of Switzerland and other European nations.
@Banany…
It just goes to show that it is the worst law most people know nothing about. I have tried that question with two USFIs, one a bank and one a credit union, just to see if there was any awareness of FATCA blowback or DATCA coming their way. Blank stares was what I got. I also questioned my local NZ bank manager, and same response. NO idea what I was talking about.
@Marie
If you look me up under Renunciations and Relinquishments…you will see my story…
I am currently dealing with the Calgary US Consulate and awaiting a CLN response
I had immediately e-mailed Jim Flaherty outlining my complete history Nov 12th/2012 …but never got a response
I also e-mailed the Minister of Canadian Immigration on Nov 19th/2012…it took over a month to get a response which basically said..”Take it up with the bank”
@Benedit Arnold be me,
I agree with Marie. Please, if you haven’t already done so, give your story to our Canadian Government. Contact person for comments regarding Canada’s negotiations with the US on and IGA for FATCA is Kevin Shoom. His contact information is at the bottom of this post, on which I’d be interested in your take: Frustration abounds as answers are not received: “Accidental Americans” born abroad to US parent(s) and not registered with the US: Are they AUTOMATIC US citizens OR do they have THE OPTION to claim US citizenship when they can make that decision as an adult?
@Calgary411
Done… I have forwarded a copy of my original e-mail to Jim Flaherty to Kevin Schoom as per your request…
@Calgary411
Auto reply from Kevin Schoom…out of office until July 15th… 😉
@Benedit Arnold be me,
My head is shaking; my shoulders are shrugging — and I too will have another email to Mr. Shoom, awaiting his return.
Benedict Arnold’s story is yet another confirmation that life as a US person abroad will soon become untenable. The CLN’s value with Canadian banks far outweighs its value at the US border.
It also confirms that IGA or not, Canadian banks are going to toe the FATCA line. TD in particular has US operations now that are as big, or maybe bigger, than the Canadian ops. They will not thumb their nose at FATCA. I wonder, is any of what is now happening to Benedict Arnold et al sufficient to trigger a Constitutional class action yet? I know the conventional legal wisdom is that there must be action/harm before you can take someone to court — but have we crossed the threshold yet? Surely “freezing” an account, as TD has done to Benedict Arnold — constitutes harm.
It would be nice to see a TV ad (like all those medical ads you see in the US) from a Canadian law firm seeking participants for a class action suit — but I guess I’m getting ahead of myself here.
Arrow – I don’t think you are getting ahead of yourself, in the sense that thought and organization for legal challenges to FATCA need to be thought out now in Canada. If Canada has the equivalent of the ACLU perhaps an such an organization might lead the suits, or alternatively, Constitutional experts and/or law school pro bono programs might take it on. Once/if Canada signs an IGA and/or if Canadian banks enter into direct agreements with the IRS, immediate action must be taken in the legal as well as political forums to try to stop implementation in its tracks.
For those interested, here is a report from a recent meeting in Europe – of the French Senate? which references FATCA (and ‘reciprocity’) multiple times. I don’t have enough understanding of it and the context to comment, but provide the link for those who do.
You will need to use Google Translate as well.
http://www.senat.fr/compte-rendu-commissions/20130701/fin.html
“REPORTS OF THE COMMITTEE ON FINANCE
Tuesday, July 2, 2013
http://articles.chicagotribune.com/2013-07-08/business/sns-rt-us-usa-tax-fatca-20130707_1_laurie-hatten-boyd-fatca-u-s-treasury
No mention of problems with US providing reciprocity, Florida and Texas bank lawsuit, potential to have the EU and others request that tax haven Delaware cough up information, etc.
@Badger…
That is the repeat of the Patric Temple-West Reuter’s story put out earlier..
http://www.reuters.com/article/2013/07/08/us-usa-tax-fatca-idUSBRE96705B20130708
The question has been raised, and fair enough… Where is the pressure that Treasury is asserting on Congress? Have you seen it? I haven’t. No one has seen any bill submitted. All there is is the page 202 reference to giving IRS more regulatory authority in Obamas FY14 Analytical perspective. That is not visible pressure for a budget that is DOA. Maybe there is some pressure behind the scenes, but nothing has broken out into the daylight via any amendment or actual bill yet.
Is this what we can expect to happen with our FATCA and FBAR information?
I don’t consider the source to be reputable, but its a story to follow.
http://www.foxnews.com/politics/2013/07/08/group-irs-mistakenly-posted-thousands-social-security-number-on-website/
“The IRS mistakenly posted the Social Security numbers of tens of thousands of Americans on a government website, the agency confirmed Monday night. One estimate put the figure as high as 100,000 names.”