FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
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NB: This discussion is a continuation of an older discussion that became too large for our software to handle well. See FATCA Discussion Thread (Ask your questions) for earlier discussion.
I am extra careful I even have a old Canadian passport where the US stamped entrance date . I think they did that starting in 2010.. If I was a American resident it would not be able to use it. You would use green card.
I am retired living on my lifelong investment 40% Canadian fixed income (provincial bonds, saving accounts and my RRSp are only strip bond income, 60% equity with large unrealized capital gain. 90% of of equity is Canadian strock or a Canadian index fund. MBA and most professional cannot beat the index The foreign investment is generally the USA index fund Canadian $ currency neutral Normal T3 or T5 do not show them as foreign income unlike C$ index funds that are not currency neutral. They own the actual shares in S&P 500. The currency nuetral may not perform as well but they are easier to do for Canadian income taxers. No additional T2209. My income level is low so Canadain dividend tax credits are important to me.
I am extra careful I even have a old Canadian passport where the US stamped entrance date . I think they did that starting in 2010.. If I was a Canadian resident
My father put me on a deed in survivor right with him and my step mom for a Florida condo in 1995.
I never went to the place while my dad was alive and after my father died my step mom was getting all the income from my father estate and I had no interst in the place. In 2008 she unable to travel and told me I had to take over the place or lose it. I started to snowbird but stayed in Canad for at least 183 days.
I eventually hated the place and worked out a deal with my step mom we split 75/25 sale price in 2012. I sold this feb.
The unit value was $59,000 USA in 1995 net selling price after comission and closing $30,000. I also had 500 of related expenses. In Canadian dollar it has a bigger loss, so no obligation under Canadian taxes. The unit sold for a lot less than the value when was I place on the deed. But because it was sold to a person who planned to flip it I did not have an easy option of not have 10% withholding. The IRS sent me a letter requesting I apply for tax identification number W7 regarding witholding. I do not plan to file a non resident tax form next year for USA and I am not interested in going back to states. Is better not to send in the W7?
Found interesting article by Canadian journalist http://isaacbrocksociety.ca/2013/07/16/fatca-how-to-lose-friends-citizens-and-influence/comment-page-3/#comment-440280 on Jim Flaherty’s public letter to the US on FATCA – which will be coming up to its two year anniversary (letter published Sept 2011).
I note it here.
Would be interesting to have someone examine where we’ve come 2 years later after Flaherty’s letter http://business.financialpost.com/2011/09/16/read-jim-flahertys-letter-on-americans-in-canada/
Shouldn’t it be newsworthy?
Another ignorant Canadian, here, but can anyone tell me if banks will be reporting RRSP accounts? I have been trying to read up on this but seem to have been finding conflicting statements.
Also, is anyone familiar with ATB Financial? Are they going to be reporting US account holders?
RRSPs will be exempt from reporting. ATB Financial is a provincial crown corp. It is possible /likely they will exempt from reporting. Best to ask them.
Re; “ATB Financial is a provincial crown corp. It is possible /likely they will exempt from reporting. Best to ask them.”
That would be good to know. We have speculated before about a credit union that was entirely owned by a province – perhaps this is the one. The name was lost far back on a past thread. I had thought it was in Saskatchewan or Manitoba.
How could FATCA bind a Canadian provincial crown corporation? Would be good to have a legal opinion on that.
OFF TOPIC…but it makes you shake your head…(do these people even read or understand the bills they pass? no wonder FATCA exists)
McCain answered, “ I cannot tell you that it is part of the bill.”
http://www.cnsnews.com/news/article/mccain-i-dont-know-how-many-passports-we-let-you-forge
In the legislation that passed in the Senate, Section 1541 “Trafficking in Passports,” it explains in detail that a person can be charged for a crime if they forge “3 or more passports,” meaning that they potentially would not be charged if they falsely made only one or two passports. The criminal charges and penalties do not kick in until after “3 or more passports” are falsely made, issued, or transferred, etcetera.
The immigration reform bill passed in the Senate on June 27 with a 68-32 vote. All 52 Democrats, 2 independents, and 14 Republican senators voted in favor of the legislation, including Sens. McCain
@Benedict Arnold be me
You are just being rhetorical, right? 🙂 Of course they don’t read the bills.
@Benedict Arnold be me
<3 passports means you only forge them for your own use 😉
Forge 2 passports and get a very stern dressing down.
Innocently not file a FBAR and give up your first born.
You will be happy to know that FATCA pages at the IRS have been redesigned
The FATCA web pages have been redesigned and updated. Additions include a new landing page for US financial institutions that addresses their FATCA responsibilities. Another new page provides information for governments interested in Intergovernmental Agreements (IGAs). A link for the FATCA registration website will be added in August, when the registration system opens.
http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)
Can anybody recommend a lawyer or accountant. I am just willing to pay a certain amount for peace of mind and make certain no Canadian equity can be considered foreign source. No plan to go to USA.
I had a friend was working in USA on temp visa. The IRS starting sending letter that got nastier and nastier, He did nothing wrong and is able to visit USA and he cleared up the situation. This will probably happen on FACTA. As far as I am concerned they can me put on a person not allowed to go to USA if they would not send me letters.
I am looking for a Calgary lawyer or accountant. I dealt with one high price lawyer accountant who failed to tell me not to sell snowbird condo to person who did not plan to live there. As far as FACTA they may add RRSP/TFSA exempt to determine $50,000. It was in the credit union report based on British example.
@money,
You might check out the blog for Moodys. I know there are a couple or three regarding snowbird issues, the latest http://www.moodystax.com/beware-of-the-us-snowbird-visa-tax-bomb/. Saying that, this is another “high price” but likely information you will be able to use vs “a guess.”
Best steer clear of outfits like this one: http://isaacbrocksociety.ca/2013/07/12/tax-compliant-americansbroad-with-a-principal-residence-or-mutual-funds-should-renounce-before-becoming-a-covered-expats/comment-page-2/#comment-432399 (the comments might help you)
from Moody
“However, this is only a pyrrhic victory for the taxpayer because the Treaty relieves the individual only from US tax on worldwide income. The Treaty does not relieve the individual from either the obligation to file all requisite US forms (including the dreaded FBAR) or the obligation to pay potentially ruinous penalties for the failure to file these forms.”
Of course if you do not go back to USA, CRA will not impose these penalty on Canadians. Letter from Flaherty plus the Liberals and NDP both agree.
The USA should really pursuing Social Security disability fraud, welfare fraud earned income tax nonsense but these a major block of Democrat voters.
Interesting reddit conversation about the US attempts to tax the planet, and also FATCA.
http://fr.reddit.com/r/news/comments/1ik24r/americans_may_soon_be_unable_to_open_bank/
Lots of the same kinds of opposition to US extraterritorial taxation and related thoughts about renunciation, expats, etc. as expressed here at IBS
http://www.nytimes.com/2013/07/21/business/a-shuffle-of-aluminum-but-to-banks-pure-gold.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=edit_th_20130721
More Shenanigans from the banksters: hoarding aluminum & copper. I wonder how Deep this story goes.
And wealth tax is such a great idea that it is in the media. So FBAR’s overseas are just the trial grounds.
http://www.nytimes.com/2013/07/21/business/wealth-taxes-a-future-battleground.html?nl=todaysheadlines&emc=edit_th_20130721
@Mark Twain:
re; “So FBAR’s overseas are just the trial grounds.”
The US sees the FBAR and associated penalties, along with Son of FBAR Fatca form as the magical road to a hypothetical pot of gold they assert their right to confiscate – regardless that it is primarily already post-tax wages, and often not even interest or investment returns. For example, our regular household and individual chequing accounts earn zero or minimal interest – particularly in the last few years. And the balance that triggers the threshold can even be a debt or negative amount – like a loan that sits in the chequing account for a moment – before going to pay a bill.
But via the magic of the FBAR, a chequing account with zero taxable interest, and 100% post-tax wages (which then also would be excluded via the FEIE or the Foreign Tax Credit) appears to generate thousands and tens of thousands for the US in potential penalties. And since the filing threshold is an aggregate, the penalty can be imposed on an account with a dollar in it – if the total of all accounts hits 10,000. on any single day in a year.
I wouldn’t doubt that the US, IRS and Treasury officials as well as others like Levin, Schumer, etc., have been lying awake at night, breathlessly counting up the estimated number of US person living ‘abroad’ times those who have a bank account or other savings – because it is like taxing or penalizing someone on the basis of breathing or being alive. We all must have at least one ‘foreign’ account because we live outside the US in a ‘foreign’ location. We must have savings and assets in order to live. In many countries, wages and government benefits must be deposited automatically via a bank account. Since the FBAR penalty can be levied for the mere existence of the ‘unreported’ account, and in the IRS belief system – per account, per year, that is the true pot of gold they covet.
So their dream equation goes like this:
[Estimated # of US ‘taxable persons’ (US citizens AND others) living outside the US] x [estimated # of bank accounts and savings per person] x [FBAR non-willful penalty / willful penalty] x [units of 10,000.] x [estimated average number of years living outside the US] = Pot of Gold
They might as well just call it the “Expatriate existence” tax, or just the Expatriate Tax.
I’m thinking that we should stop accepting the name FBAR and start referring to it as the “F’d (if you have a) Bank Account Report, or the Expatriate Bank Account Tax or something that similarly exposes the underlying true intent and method of application.
@mark twain, thanks for that link, the NYT article is very interesting as read through the eyes of US expats and ‘US taxable persons’ – in fact it is very ominous. In addition to the continuing threats to the Foreign Earned Income Exclusion, and to Foreign Tax Credits, the FBAR and FATCA focus on our already taxed and entirely legally held assets earned outside the US where we live – NOT only on what the US defines as our ‘taxable’ income.
The article says:
“…….Capital gains taxes that aren’t indexed to inflation also serve as an implicit wealth tax, because they dig into the body of a person’s capital. Most likely those rates will rise. Like the bank robber Willie Sutton, revenue-hungry governments go “where the money is.”
The coming battles over wealth taxation may prove especially bitter and polarizing. Most wealth has already been subjected to income and other taxes, perhaps multiple times.”……..
from Economic View – ‘Wealth Taxes: A Future Battleground’ by TYLER COWEN – Published: July 20, 2013
Our non-US assets have already been, or will be subjected to income and other taxes, multiple times – in the non-US country where we live. AND, the US formally asserts the right in tax treaties to layer it’s taxes on top of that. And to repress or supress our ability to save normally via TFSAs, RESPs, RDSPs and other Canadian government blessed registered accounts – by reserving the right to define what is taxable that belongs to those deemed ‘US taxable persons’ abroad. And the US refuses to recognize and give us US credit for the property taxes and other taxes – like sales or consumption taxes that we pay abroad.
The US continues to embody ‘might makes right’ in addition to ‘do as I say, not as I do’ :
US Out To Scupper Global Corporate Tax Laws
July 21, 2013 By Lisa Smith
http://www.iexpats.com/us-out-to-scupper-global-corporate-tax-laws/#sthash.TCYfrE3s.dpuf
………..”The problem for Obama is many of the corporations avoiding their taxes are American, and the backlash at home could be fewer jobs and less cash for expansion if they have to pay more money to foreign governments.”……..
……..”After reviewing a draft proposal, the US government wants a much toned down version that does little to resolve money shifting issues for other governments.
News agency Reuters said an unnamed Washington source had told them that the government did not want to see any sanctions against some of the country’s fastest growing and most profitable businesses.
– See more at: http://www.iexpats.com/us-out-to-scupper-global-corporate-tax-laws/#sthash.TCYfrE3s.dpuf”
See also:
http://www.guardian.co.uk/business/2013/jul/14/us-tax-avoidance-google-amazon
…….”Senior officials in Washington have made it known they will not stand for rule changes that narrowly target the activities of some of the nation’s fastest growing multinationals, according to sources with knowledge of the situation.”….
http://planet.infowars.com/economics/us-blocks-crackdown-on-tax-avoidance-by-net-firms-like-amazon-and-google
http://www.business-standard.com/article/international/us-opposes-probing-of-tech-biggies-like-google-and-amazon-for-tax-evasion-113071500226_1.html
It gets better:
http://www.guardian.co.uk/business/2013/jul/19/oecd-tax-reform-proposals-amazon
…”Notably absent from the launch event was the US treasury secretary, Jack Lew. Sources with knowledge of the extensive negotiations said the US was growing increasingly frustrated with sniping from European politicians targeted at some of the most successful US multinationals including Starbucks, Google and Amazon.
Lew used an article in the Financial Times to call on Europe and other economies to knuckle down and focus on fostering growth rather than squabbling over taxing rights….”
…….”….His remarks appear to echo recent warnings from big business lobby groups such as the United States Council for International Business and the Confederation of British Industry suggesting the scale of multinational tax avoidance had been exaggerated and draconian measures to stamp it out risked damaging job creation.
While the US accepts there is merit to updating OECD tax treaty rules, senior figures in Washington are quietly seething at the behaviour of French tax authorities, who have aggressively challenged the tax claims of digital businesses such as Google, Microsoft and LinkedIn, raiding their Paris offices in recent years.
Earlier this week, the Guardian reported that American negotiators had in effect blocked more radical French ambitions for new tax rules targeted at digital multinationals. Instead, a fresh OECD taskforce is to be set up and given a year to study business models in this industry and how profits should best be apportioned between countries.”…
So, Jack Lew, latest Obama Treasury appointee lectures the rest of the world and tells them not to ‘squabble’ over taxing rights. Yeah right. And what is FATCA then? And he echoes US big business – claiming that ” the scale of multinational tax avoidance had been exaggerated and draconian measures to stamp it out risked damaging job creation.”? What? So, taxing US multinationals is due to exaggeration and draconian measures, but using the FBAR and FATCA on law abiding individuals around the world already paying one set of taxes where the live is okay?
What BS.
It’s always been one law for the Americans and another for the rest of the world if anything is likely to hit US businesses/interests. What they don’t realise is these companies don’t pay much, if any, tax in the US either so the US isn’t getting any benefit anyway.
It’s time the world stood up to the US and said tough luck. This is what we’re going to do and if you don’t like it don’t do business here. Unfortunately, governments around the world only have themselves to blame by offering companies things like reduced tax incentives or tax breaks, paying them for “investing” in the country only to have them move elsewhere when costs get too high, etc.
US hypocrisy is simply amazing– to the point of being pathological.
@FromTheWilderness @Medea Fleecestealer
And therein lies our hope for FATCA, that U.S. DATCA hypocrisy will scuttle it! The more scabbling on these other issues the better. Let’s encourage it!