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.
Watch the upcoming hit TV series “Moose: the FATCA fugitive hunter” on CTV. Comply or die.
I see this differently. The witholding by banks is on US origin asset, right? If a Canadian has an account(s) in excess of $50,000, but it’s not US sourced, there would be no witholding, as they can only withold on other origins, right? Why would a bank in Canada force recalcitrant clients to close accounts? Look what happened with the backlash against RBC’s offshoring of jobs.
I’d love to see what would happen if a bunch of non-US person, recalcitrant Canadian account holders received demands from the IRS, as they bank passed them along to CRA, and CRA passed them to the IRS. The Canadian excrement would hit the fan.
@the Mom
This from the Canadian Bankers Assn website:
“Conflicts in withholding funds – FATCA will require that institutions withhold on both U.S. and non-U.S. source income if the client cannot provide sufficient identification to meet FATCA standards. Financial institutions from many countries have indicated that some contracts and client agreements may not allow for this type of withholding.
FATCA is also enormously expensive and complex to implement.
Severe penalties for FATCA non-compliance
The penalty for non-compliance with these complex rules is very severe for both banks and their clients. The penalty includes a 30 per cent withholding tax on all U.S. source income flowing to the bank and its customers, and a 30 per cent withholding tax on the gross proceeds of the sale of U.S. securities by the bank and its customers.”
http://www.cba.ca/en/research-and-advocacy/47-regulatory-enviornment/598-foreign-account-tax-compliance-act-
@bubblebustin
I find myself confused. When the banks start asking everyone if they are USP, then what? We have to say yes? Give them our social security number? Then what? The banks can take money from our accounts and give to IRS? I became a Canadian citizen in 1993. Last month I went to apply for a backdated CLN.
If I get it, I show the banks my papers? (That is so weird, it makes me feel so second class.)
I read the BC article on here last night where it said ALL Canadians will be asked if they are USPs. I told my boyfriend this and he said that is BS. He thinks this is crazy. He is not a USP.
Hopefully I get the CLN. Then I am one of those who can help because I have nothing to go back to the USA for and no income or property. Waiting for my “Papers” , they can not come soon enough.
I have an older friend near me, who is not computer savy. She is a USP but not a citizen, she has been here for 50 years and never filed one us tax return since being here. She gets a US payment from the VA as her late husband was in the army in Korean war. I guess that will be confiscated. Half her children were born her and half were born in usa. I see a big problem for her and family. I know others like her. But none are concerned like I am. Only one couple I know went for their renouncement in Ottawa. They became Cdn citizens in 70s. They found out on their own they could just relinquish, and did that. The us counsel never told them this. They are still waiting for their CLN.
I guess when the banks start asking for SSNs then more people will become aware. I hope we can be of help to them.
Don’t you just love these articles…
US Citizen Living in Canada? It’s Time to File Your US Tax returns Before it’s too Late
@Just Me
John is a successful tax consultant…He loves FATCA.
I am thinking of putting up in the libraries and mall bulletin boards the No One”s Exempt from the US tax by Brad Chapman August 27, 2013 that I saw here on Brock.
What you all think? Is it a good idea?
Sure, with big Warning Red Letters. 🙂
Well, when they ask me to show proof of US citizenship, I will tell them that Jews and Americans believe in circumcision, whereas Europeans do not. Then I plan to give them the proof they ask for, and have them send me off in a railcar just like the last time they had such checks.
File your taxes before it’s too late? Let’s all rush over to ask him if it’s ‘too late’! Of course it’s never too late and never will be, so implying that it may one day be is just a blatant LIE! Just like Doug Shulman telling people that OVDI was the last best chance for those hiding money offshore. Of course, none of these folks can tell you anything other than to file your US taxes so it’s entrapment, pure and simple. Caveat emptor.
FATCA withholding applies to “US-sourced income” and “US payments”. Does anybody know if this means Canadian mutual funds that include US investments as part of their portfolios?
DARN! I should have waited until it was “too late” to file my US taxes and avoided all of this aggravation altogether!
Northernstar Bad idea. The article is chock full of errors. It’s very poorly done. No non American will be ‘deemed’ to be an American. You won’t need to show your bank anything. They are not allowed to ask where you were born. They may ask your citizenship. The correct answer is ‘Canadian’.
C’est ça. That’s it. End of story. Bob’s your uncle.
@KalC
Thanks for your wise and valuble advice. I will just word of mouth warn my AP friends.
northernstar – I read the BC article on here last night where it said ALL Canadians will be asked if they are USPs. I told my boyfriend this and he said that is BS. He thinks this is crazy. He is not a USP.
A couple of weeks ago, sometime in August, I filled out a routine (but first time) formal declaration of no US citizenship for a Canadian-only-ever relative who had no idea why the question was being asked by one of the big 5 banks. Even with a good idea of what was going on, I found the form almost incomprehensible.
A form may be coming soon to a boyfriend near you?
It says “post below”, but I can’t get anything up that allows posting. I used to be able to post on the old NPR format.
oops, wrong post. Please ignore above–it’s meant to be on the NPR thread.
For the purpose of extracting revenue, FATCA already has three Achille’s Heels. Those who can remain undetected because they present no indicia as being US persons, those who present indicia but have CLN’s that exempt them from reporting regardless of whether or not they’re tax compliant, and the fact the Canada will not collect tax and penalties against Canadian citizens. Oh yeah, there’s a fourth: mattresses.
Consider yourself lucky if you fall into one of these categories.
http://www.theasset.com/article/24979.html#axzz2dhbRtNRE
The reality is that FATCA presents one of the biggest challenges to established systems, processes and workflows that most institutions have ever faced. It touches almost every aspect of their business, demands iterative processes, and has extensive reporting and auditing requirements. It is emphatically not KYC-plus or enhanced AML (anti-money laundering) – although these are nonetheless important aspects of the regulations.
According to the Americans Resident Abroad Working Group, many Americans abroad noted that they have problems opening or maintaining local financial accounts, because the Foreign Account Tax Compliance Act (FATCA) makes it burdensome and even risky for foreign banks to have US citizens as clients. Making matters worse is the fact that in some instances investment portfolios had to be sold at a considerable loss.
http://waybeyondthebeltway.com/2013/09/01/access-to-financial-services/
Every American With Money Abroad–Anywhere Abroad–Is Impacted By Massive Bank Deal
http://www.forbes.com/sites/robertwood/2013/08/31/every-american-with-money-abroad-anywhere-abroad-is-impacted-by-massive-bank-deal/
Thanks for your links, Just Me.
The author of this blog says:
Rising regulatory costs worry financial institutions, says survey
http://www.theasset.com/article/24986.html#ixzz2dkLBClD8
Financial institutions in Asia-Pacific are increasingly concerned with the rising expectations and costs associated with cross-border and domestic regulatory change, according to a new survey by Thomson Reuters released on September 2 2013.
Topping the list of issues that concerns the financial institutions in the region is new anti-money laundering (AML) regulations and the looming deadline for compliance with the US Foreign Account Tax Compliance Act (FATCA). Compliance officers are becoming increasingly concerned with meeting the approaching FATCA deadline.
43% of respondents said they expected FATCA compliance to be one of the biggest challenges facing their institutions in 2013 while 38% of respondents were concerned with AML regulations.
@Just me
Thank you posting “US Citizen Living in Canada? It’s Time to File Your US Tax returns Before it’s too Late” where you can see I’ve been having a conversation with Phil Hogan, CA, CPA. My initial question was: “When exactly will it be “too late” to file US taxes?”
– See more at: http://themoneyguide.ca/us-citizen-living-in-canada-its-time-to-file-your-us-tax-returns-before-its-too-late/#comment-4131
He appreciates my insight for which I’ve given Isaac Brock full credit. He’s also asked me to participate in a forum that others here may want to check out. Mosquitoes, fire up your engines!
FATCA means business: how to recognize a Controlling Person?
Lovely how a synonym can lead to mental disturbance. I’ve been involved in an implementation of the Foreign Account Tax Compliance Act (FATCA) for over a year now. Somewhere down in the relevant regulations there’s the concept of Controlling Person, that may be a U.S. Person for tax purposes. These Controlling Persons need to be disclosed by a so-called Passive Non-Financial Foreign Entity (NFFE). For reasons of compliance I was interested in the definition of a Controlling Person.
Read on, as you might find it interesting Here is the conclusion for a guy in the FCC are similar to many made here at IBS.
As the Tower of Power states in the third step to deal with Controlling People: speak up to controlling people. You cannot shatter the idealized image placed on you until you speak up to face the problem. Though you are a victim of someone’s hurtful behavior, you are responsible for your response.
Pay your duties, repeal, give up your U.S. Citizenship, move to the greener grass on the other side.
Our friend Jim Jatras over at Repealfatca hasn’t said too much lately. I wonder what he’s cooking up?