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.
@badger. THe article points out that wealth taxes are coming to US shores soon. That is where the media is prepping the population. FBAR was an easy way to try it out on those that can’t help themselves. Next, they will come in and get it in the Homeland. It’s good to point out to Homelanders that our fate will soon be theirs.
Another very interesting new development:
Organization of independent businesses in Canada website – CFIB – alerts small family and other businesses to FATCA and privacy issue impacts – including on Canadian only business partners:
See http://www.cfib-fcei.ca/english/article/5325-us-law-could-erase-privacy-protections-are-you-affected.html
See excerpt below:
“US law could erase privacy protections – are you affected?
Many small business owners in Canada have business partners or family members with U.S. citizenship or dual citizenship. On January 1st, 2014, a U.S. law, the Foreign Account Tax Compliance Act (FATCA) is set to erase certain privacy protections now taken for granted in Canada.”……
….”….While FATCA aims to bring U.S. citizens living abroad into tax compliance, it is likely to have unintended consequences. Along with a loss of privacy for citizens outside of the United States, there will also be new filing obligations to manage, red tape to overcome and extra accounting costs incurred.
To inquire about the interaction of Canadian laws, FATCA and the IRS, please contact the office of the Privacy Commissioner of Canada.
To understand IRS-mandated filing implications please speak with your accountant.
To understand how your financial institution will hand over your information when requested by the IRS please contact your bank”
CFIB describes its mandate as: “the Canadian Federation of Independent Business (CFIB) is the big voice for small businesses. For over 40 years, we have represented the interests of the small business community to all three levels of government in their fight for tax fairness, reasonable labour laws and reduction of regulatory paper burden.
We have our finger on the pulse of any issues affecting the full range of enterprises in Canada, from one-person, home-based businesses to firms employing hundreds of people. Through regular polling of our membership, we are privy to an up-to-date, firsthand perspective regarding the state of the economy, as well as their feedback concerning what changes need to be made to government policies. “
Banks: France-US agreement on FATCA technically ready (Moscovici)
From google translate…
The agreement between France and the United States on the application of U.S. law FATCA against tax evasion is “technically ready” and could be signed this fall, said on Saturday the French Economy Minister Pierre Moscovici.
At a meeting of finance ministers of the G20 countries, Moscovici has “point” with the U.S. Treasury Secretary Jack Lew “on the preparation of the agreement for the implementation of FATCA between France and the United States. ”
The agreement “is prepared at the technical level. It may be signed at the next opportunity, we discussed the possibility of doing so in the next IMF meetings in Washington in early October,” said Mr Moscovici at a conference release.
The “Law on tax compliance relating to foreign accounts” (FATCA) is to strengthen the fight against tax evasion in the United States, but its implementation is anything but simple for.
Enacted in 2010, this law has truly come into force in stages from 1 January 2014, almost two years behind the original schedule.
The main provision, very controversial, this law stipulates that foreign financial institutions (FFI) have an obligation to inform customers of their taxable in the United States under threat of a compulsory levy of 30% on their U.S. source income .
The United States is trying to negotiate with the largest number of countries, agreements to erase difficulties for foreign banks to meet this obligation without violating their national laws on data protection.
The discussions are not without difficulty, and the U.S. Treasury Department has failed in its objective of concluding negotiations before the end of 2012 with thirteen countries, including France.
After signing the agreement, France would join the United Kingdom, Denmark, Mexico, Ireland, Switzerland, Norway, Spain and Germany.
Could someone comment on the beneficiaries of TFSAs under FATCA or an IGA?
It is my understanding that TFSAs will be scanned. Will there be any danger of reporting if the declared beneficiary of a TFSA is in the category of “American person” while the actual account holder’s only citizenship is Canadian?
To be clear, in the post I just sent, ny “beneficiary” I am referring to the person designated as beneficiary upon the death of the account holder. This is an option and not all account holdersname a beneficiary.
Has anybody used Moody tax services they a re a bunch of americans.
@money,
Yes, Moodys did good work for me. Something I in no way could not have done myself (some can — I sure couldn’t); with the cost of turning out the new FATCA 8938, my Canadian accountant decided she could not justify passing on the cost of her time for preparing all that onto her clients. From my experience, it seems difficult to get competent help for US taxes in a big city in Canada. What must it be like in so many smaller communities and in some other countries? Although I will always resent having to spend my hard-earned all-Canadian retirement dollars for the high cost of getting into compliance with the US and renouncing US citizenship, I appreciated the way they worked with me. Their expertise gave me the confidence I needed that I would be OK — in concert with all the support I’ve received here at Isaac Brock. How much was my sanity worth? For me, it was money well spent to get my freedom. I contrast my experience with Moodys to that of one across the line firm whose services I started but ditched with frustration. Similarly, my daughter’s experience with H&R Block was a disaster.
I am just a Canadian born citizen who had a green card 30 years ago. I signed a form in 2008. I am just missing my formal renounciation card, I only lived in Canada since 1982. I have no plan to go to USA. I just want advice how to minimize headache. I do not want person who is too buddy buddy with USA officials.
@money,
Be wary. It is a buyer beware world out there for ‘US taxable persons’ living ‘abroad’. There are far fewer professional advisors and preparers to choose from, and their fees have increased significantly since the IRS and Treasury crusade against us began.
And the IRS adds greatly to the costs by dragging things out, sometimes issuing computer generated erroneous notices and threatening form letters. There is no transparency and no accountability. The whole process is opaque.
Read as much as you can here and on some of the links first, because that is also the only way to know if the people you are considering know what they are talking about, and to weigh whatever advice you get.
@money, there is a vast range between the extremes of HRBlock and Moodys. Read further here first, and get a better sense of your situation and options before signing on with anyone.
http://www.tribune242.com/news/2013/jul/23/fatca-infrastructures-significant-concern/?news
This is an article from the Bahamas. What struck me is that it contains questions that Canada and all other countries negotiating a FATCA IGA should be asking, and discussing with their citizens and residents.
Because ALL Canadians – whether duals deemed by the US to be ‘taxable persons’, or whether Canadian born Canadian only citizens will be paying Canadian taxes to create new infrastructure and to expand the CRA in order to collect all of our banking information and send it automatically to the US.
See this excerpt and read it with Canada or another non-US country in mind instead of the Bahamians.
Ask yourself why this discussion is not taking place in public in Canadian newspapers, and amongst the federal political parties who represent the Canadian public:
from ‘
Fatca Infrastructure’s ‘Significant Concern’
Tuesday, July 23, 2013
By NEIL HARTNELL Tribune Business Editor
…..”The Model One IGA will require Bahamian financial services providers to supply all necessary information on US taxpayer clients to the Government, probably the Ministry of Finance, which will then send it to the Internal Revenue Service (IRS).
While this is the financial services industry’s preferred compliance route, it will inevitably raise questions of information security, plus create a new level of cost and bureaucracy for sector and government…..”
…..“That’s an area of significant concern. I imagine the [banking] industry will likely seek to have some kind of influence, I don’t want to say involvement, but influence in ensuring the compliance infrastructure is in place. That’s obviously the big elephant in the room.”
Mr Lewis added: “We’ve got to now put up some level of new infrastructure, whether that’s people, technology, some form of new agency, or unit sitting within an organisation.
“We’ve got to put some level of support in place. How do we do that in the most cost effective manner, but accomplish the things we need? Where is the Government going to find the money to do it? These are the big questions that will next have to be grappled with from the Government standpoint.”….”
Old & simple I’m afraid you are not being clear. However, if the owner of a STSA is only canadian, then there is nothing to be concerned about .that account will not be reported to the IRS. An American beneficiary can inherit tax free from a non resident alien.
Money You don’t have to do anything.
Sorry, typo, meant ‘if the owner of a TFSA….
Sophie in’t Veld in the EU Parliament publicly asks the urgent questions that our Canadian MPs should be ashamed that they are not asking or seeking to answer for Canadians.
Ms. in’t Veld includes a reference to the text of the letter from Congressman Bill Posey to Secretary of the Treasury Jack Lew, 1 July 2013. http://www.repealfatca.com/downloads/Posey_letter_to_Sec._Lew_July_1,_2013.pdf
On July 16th, Ms. in’t Veld said:
“….the ‘reciprocity’ stipulated in exchange of information IGAs seems to become problematic for both members of the US Congress and US banks(2). Questions were raised about the Treasury’s authority to negotiate directly with foreign governments and to sign IGAs. There were calls for ‘a moratorium on FATCA enforcement and negotiations of additional IGAs’(3). …”
“4. What is the legal status of IGAs and can the US change or repeal them unilaterally at any given time?”
http://www.europarl.europa.eu/sides/getDoc.do?type=WQ&reference=P-2013-008732&format=XML&language=EN
All the Canadian federal political parties except perhaps the Greens are going to have to explain after the fact why they did NOT raise this in a way that would alert the Canadian public, and bring Canadians into an informed and public discussion about FATCA.
We now have been corresponding and meeting with enough MPs to know that at least the 3 major parties know about FATCA and what it will entail. There has been NO public debate on this, or notice to Canadians in any meaningful way that our government intends to bind ALL Canadians forever, to an extraterritorial unilateral foreign law invented by the US to further US interests at Canada and the world’s expense.
I think that the NDP, the Liberals and the Conservatives have a lot of explaining to do. There has been NO public statement against FATCA from the federal NDP, or leader Thomas Mulcair. No statement from Liberal leader Justine Trudeau. NDP MP Mai is to be admired for his very helpful, pointed and cogent questions to the Harper government – which is in the Hansard record, but his official successor in the shadow cabinet MP Rankin has not seen fit to continue in that vein. If the NDP and the Liberals agree with FATCA, let them say so in public to Canadians – particularly the Canadian families who would be subjected to confiscatory penalties and double taxation by the US. If not, then they should show some honour, and stop skulking about in the weeds tacitly letting the Conservatives sign Canada up to something that will bind all of Canada, and torment the families of more than one million claimed as ‘taxable persons’ by the US. If MPs truly agree with signing on to FATCA, then they should be forthright and honest enough to stand up in public and tell Canadians that, and be prepared to defend their position.
If high profile US citizens like the IRS taxpayer advocate Nina Olson, and Willard ‘Bill’ Yates – Former Attorney, Office of Associate Chief Counsel (International), IRS ( http://blogs.angloinfo.com/us-tax/2013/07/22/residence-based-taxation-interview-with-bill-yates-former-attorney-office-of-associate-chief-counsel-international-irs-2/ ) and Colleen Graffy “a former United States Deputy Assistant Secretary of State for Public Diplomacy for Europe and Eurasia, and associate professor of law and Director of Global Programs at Pepperdine University School of Law and Academic Director of their London campus.” ( http://en.wikipedia.org/wiki/Colleen_Graffy , http://online.wsj.com/article/SB10001424127887323993804578611711520269422.html ) can all see the serious problems with the way that the US is treating us ‘abroad’, and state that in public, then how can it be acceptable that Canadian MPs should be silent and let the Harper government sign away our freedom and rights – subject to a foreign=domestic US law?
If I was the NDP, the Liberals and the Conservatives, I’d be seriously thinking about how I was going to explain this one away. We’ve got the Hansard records of various FATCA questions raised in Parliament, the correspondence and conversations with MPs from all three major parties over a period now of 2 years or more. No way to backpedal and say they didn’t know. We have tried to keep them apprised whether they wanted to know or not.
Why don’t we make EU representative Sophie in’t Veld an honorary Canadian MP? She is asking the questions about the US NSA, FATCA, and other US extraterritorial incursions that our own parliamentarians should be raising publicly but are choosing not to.
I know people having private back channel discussions with the Liberals and NDP. I will say this there is a real reluctance to be seen as hurting Obama, the US, and poor people in the US(like what’s his name Treyvon Martin) over this issue.
@Tim, if that is the reluctance on the part of the NDP and the Liberals, then they don’t even have a clue what FATCA is all about. And I am not sure I buy that they don’t understand. By now, the NDP has enough MPs who get it – ex. BC NDP caucus. Is it now just willful ignorance? And what is with the Liberals? They too by now have had enough constituents complain to see what is really up with FATCA and US taxation of those in Canada – even children born and raised here.
Canadian MPs are supposed to be representing the best interests of the people who elected them – their fellow Canadians. If they give first concern to Obama, the US, and ‘the poor people in the US’ rather than their constituents, Canadian citizens, and Canadian residents, then they aren’t doing the task they are sworn to.
Since when are the Liberal and NDP of Canada answerable to the President of the US?
Thanks Duke.
The case I was curious about would be a TFSA owned by a Canadian only citizen where a “US person”, usually a spouse, has been named as beneficiary.
Basically, I think the question could be put more broadly this way:
The US already claims the right to demand reporting of the income of the non US spouse when a US person files his income tax return ( at least that is what I get from messages on IBS ). Won’t “having a US spouse” wind up on the list of indicia for FATCA scans?
I am not legally married myself, but I suspect a lot of people married to US persons worry about this.
Thanks Duke.
The case I was curious about would be a TFSA owned by a Canadian only citizen where a “US person”, usually a spouse, has been named as beneficiary.
Basically, I think the question could be put more broadly this way:
The US already claims the right to demand reporting of the income of the non US spouse when a US person files his income tax return ( at least that is what I get from messages on IBS ). Won’t “having a US spouse” wind up on the list of indicia for FATCA scans?
I am not legally married myself, but I suspect a lot of people married to US persons worry about this.
Also, I am beginning to feel that it’s best not to trust a Canadian bank with any info onmmarital status.
@oldandsimple,
I don’t think marital status matters at all. If you share bank accounts of any kind with a ‘US person’, then you have something to worry about regardless whether said ‘US person’ is your spouse or not.
O&S no you have it wrong. An American does NOT have to report income of a non US spouse when filing tax returns. That is assuming they live outside the homeland.
‘having a US spouse’ will NOT wind up on the list of indicia for what you call FATCA scans. (IS that like a financial CAT scan?) I’m afraid you have an over-active imagination.
@O&S
Having a US person beneficiary does not make an account a US reportable account. There is no reference to “beneficiary” in the US indicia.
If you grant a power of attorney to a US resident then the account becomes FATCA reportable irrespective of whether you are a US citizen. Note that granting a POA to a US citizen resident outside the US does not make the account FATCA reportable.
@badger
I agree, the Canadian government should be doing a total accounting of what FATCA will cost Canadian taxpayers! As I stated in my submission to the Standing Committee on Finance for Canada’s annual pre-budget consultations last year:
Survey question:
“1. Economic Recovery and Growth:
Given the current climate of federal and global fiscal restraint, what specific federal measures do you feel are needed for a sustained economic recovery and enhanced economic growth in Canada?”
My answer:
“The US government’s Foreign Account Tax Compliance Act will burden the Canadian economy and all taxpayers dearly in terms of compliance costs and privacy, whether the banks report directly to the IRS or through the Canadian government. Parliament should forbid the implementation of FATCA, enacting substantial fines against banks for revealing account information to the IRS or any other foreign tax
agency. The Government of Canada should provide a complete examination of what an intergovernmental agreement with the US on FATCA will cost the Canadian taxpayer. US citizenship based taxation, by taking from the wealth and retirement savings of US persons in Canada, directly takes from the Canadian economy, and more greatly exposes Canadians with US citizenship to financial hardship and makes them less able to contribute to the Canadian economy.”
I encourage all Canadians to participate in this year’s consultation:
http://isaacbrocksociety.ca/2013/07/01/its-budget-submission-time-in-canada-again/
Tim wrote:
This time though the submissions are basically open ended. You can talk about whatever the hell you want as long as your format it a certain way.
The Standing Committee on Finance is undertaking its annual pre-budget consultations. Following these consultations, it will present a report to the House of Commons outlining its recommendations for the 2014 federal budget.
Individuals and groups are invited to take part in these consultations by completing the Committee’s online template no later than August 5, 2013. Only one submission per individual or organization can be made..
To take part in the consultations, you
must use the template published on this page
must propose between one (minimum) and three (maximum) recommendations
may provide up to an additional 500 words that elaborate on your recommendation(s) in the space reserved for that purpose on the template; and
must submit the completed template no later than AUGUST 5, 2013.
An acknowledgement of receipt will be provided as soon as the Committee receives your completed template.
The completed templates will be translated and posted on the Committee’s website.
NOTE: TO BE CONSIDERED, ALL RESPONSES MUST BE PROVIDED USING THE ONLINE TEMPLATE AND SUBMITTED BY THE DEADLINE.
Edelweiss. Watch for the talk of the compliance jocks for FATCA, such as those found in Linked In. They are creating their own methods for finding US persons beyond the legislated required methods. Good news is that some human beings in the banks are doing everything possible not to find US persons also.
Anybody knows the rules for tracking agents of common shares? They pay dividend.