FATCA Discussion Thread (Ask your questions) Part Two
Please ask your questions here about FATCA.
Participants will need to provide their e-mail address (real or fake) and an alias. The only written rule is that participants must use a same alias each time they post (and not “anonymous” or derivatives thereof).
Bear in mind that any responses that you get from participants is peer-to-peer help, and it is not intended as a replacement for professional advice. Also, the Isaac Brock Society provides this disclaimer: neither the Society nor any of its members are professionals. We offer our advice here only in friendship and we recommend that our readers seek professional advice if they need it.
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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.
@Em
Demons Underground have apparently never heard of the 1st Amendment. No bother, I’ve been kicked out of better places.
A few quotes to help along the way:
“There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that “my ignorance is just as good as your knowledge.”
― Isaac Asimov
“We are all born ignorant, but one must work hard to remain stupid.”
― Benjamin Franklin
“But you can’t make people listen. They have to come round in their own time, wondering what happened and why the world blew up around them. It can’t last.”
― Ray Bradbury, Fahrenheit 451
LOL! le President amateur. I managed to suppress my nausea, until I realized what it was. Someone should tell Lindsey Graham that pink’s not his colour – red’s much better for a southern belle.
@Bubblebustin and Le President Amateur ..
I been out for 3 hours and missed excitement…HA..take a shower and go out and come back to this.
I have for the last year find DU has become so intolerable.
I gave up on the MSM, even MSNBC…
@EM
I love your comments which go what happened in DU today. I also have been kicked out of DU. or had posting privileges revoked for a time. It is a learning experience. To see so many views but few comments and nasty ones. There are the odd nice ones that comprehend the situation. Some sad because they are the ones who want to escape the USSA.
I think DU and Microsoft have the same moderators.
the Hotmail account used only for registering at Demons UnderWater and for registering the twitter account is on hold for “suspicious activity”. It might take a couple days to get that unlocked
ooooooohhhh
DU must have either a huge budget or a huge cast of willing information-formers.
If it is a budget for employees, that will bring a question as to who funds them.
If it’s volunteers, well I guess we know where they come from:
http://www.youtube.com/watch?v=z-sdO6pwVHQ
So, it performs 2 services: to formulate information, and to make a record of those that don’t follow that information
The funding could either be from public or large private
A honeypot, perhaps?
http://www.infosources.org/what_is/Democratic_Underground.html
“The DU Forums are a highly active scene where progressives of all types are welcome to come and talk The site bills itself as welcoming to progressives of all types though users are sometimes “tombstoned” (banned) by administrators for violating site policies such as these:
“We ban conservative disruptors who are opposed to the broad goals of this website If you think overall that George W. Bush is doing a swell job or if you wish to see Republicans win or if you are generally supportive of conservative ideals please do not register to post as you will likely be banned”
Heard CBC news this morning. Mention of IBS and Maple Sandbox, great interview with ‘G’ on Matt Galloway’s show as well as FATCA in news on the hour. Thanks to Gwen!
But the wording on the news report sounded as if FATCA already law in Canada? Any updates?
I just heard it on the hourly newscast. What I heard is that it’s a law that’s going to take effect over the next few years. I like the tone of it – that innocent people are being swept up into a program aimed at tax evaders – which they and Canadian banks will have to pay for – dearly.
I think I’ll listen to it every hour on the hour today!
@Badger / bubblebustin…
Any links to the program anywhere on the CBC site? Would love to hear it. Also see the two new articles on CBC, it the ‘sounds of silence’ are being replaced with ‘alarm bells’, it seems to me.
http://www.cbc.ca/metromorning/episodes/2014/01/13/us-tax-by-default/
Monday January 13, 2014
US Tax By Default
Matt Galloway spoke with “Gwen”. She is an American-born dual citizen, who has lived most of her life in Canada. She is among many people who could soon be forced to pay thousands of dollars in penalties for taxes they didn’t know they were supposed to file with the US government.
Listen audio (runs 6:34)
See also on this webpage a space for comments/responses
Thanks Badger
The CBC radio news segment is aside from this radio interview. They didn’t play it on the 10:00. Maybe they will at noon. You may catch it if you tune into internet radio news for CBC.
That would be coming up noon on the Vancouver broadcast, that is.
Hello all. I’m new to all this so please bear with me. Could someone please tell me how the IRS will collect penalties from us here in Canada? I was born here but unfortunately have dual citizenship through one of my parents. If one of my banks determines that I am a US person, then what? I heard that revenue Canada will not be collecting on behalf of the IRS. So if I ignore the IRS then what?
@ treehugger
Once long ago Minister Flaherty did promise that the CRA would not collect but truthfully none of us know what will happen if Canada signs a FATCA IGA (inter-governmental agreement) with the USA. We wait and wait and wonder … and worry. Not helping much, am I. But hey! Welcome! 🙂 You could look at the Swiss situation but that’s kind of scary. We all have speculated as to what kind of questions a bank might ask but, again, we don’t know. Being born in Canada is very much in your favour and anyone could “honestly” say they have no idea where their parents were born … I suppose … if they had to … I guess. However, if you in anyway connected yourself to the USA — obtained a US SS number, filed US tax, got a US passport, that sort of thing — all bets are off.
Florida and Texas bankers lose round one.
Re:
Florida Bankers Association v. U.S. Department of Treasury, U.S. District Court for the District of Columbia, No. 13-529.
See:
http://www.businessweek.com/news/2014-01-13/u-dot-s-dot-banks-must-report-foreign-clients-interest-judge-says
…”U.S. banks must report interest earned by accountholders who reside abroad, a federal judge said, ruling against two banking associations that had challenged the Internal Revenue Service’s requirement.
The regulation will deter foreign and domestic tax evasion, imposes a minimal reporting burden on banks, and won’t cause anyone other than a tax evader to withdraw his funds from U.S. accounts, U.S. District Judge James. E. Boasberg in Washington said in a decision today.
The IRS is starting to require the information to comply with international treaties requiring foreign banks to provide similar information about overseas accounts of U.S. taxpayers. Banks in the U.S. already are reporting interest earned by U.S. citizens and residents. The new requirement only applies to nationals of about 70 countries with which the U.S. has an exchange agreement.”…..
and,
http://www.reuters.com/article/2014/01/14/us-usa-tax-bankers-idUSBREA0D04P20140114
and,
http://www.chicagotribune.com/news/sns-rt-us-usa-tax-bankers-20140113,0,1469407.story#ixzz2qLL7cZyv
Oh, HO! And here we go.
I was born in the U.S. to a Canadian mother but have spent my entire life in Canada as a Canadian. I do not even think of myself as American and I have never had a job or earned any kind of income there. I had no idea that I am supposed to file a U.S. tax return given that I am not in the habit of reporting my Canadian earnings to foreign governments (and frankly would not have complied even if I had known). My question is this: when Canadian banks begin their snooping process, how could they know the U.S. government considers me a “U.S. person”? I have no financial transactions with the U.S., no income coming from there, no addresses there and Canadian banks don’t ask for your place of birth when you open an account so there is no reason they would have this on file. Given this, they could not identify me, could they?
Nick,
It depends on what Canada agrees to with the US and FATCA. It could be as simple as the Canadian government telling the banks they must ask account holders where they were born and if in the US, ask for proof of loss of citizenship. This is how the FATCA agreements already read in (I think) the UK and France.
One could lie or try to hide, but look at your Canadian passport. It shows you were born in the US. Who gave you the passport? The feds already know where you were born.
You can refuse to answer the questions the bank will ask you, but then they might be forced to close your accounts.
I’m not clear on the FATCA implementation. I think initially, they ignore existing accounts, or at least that contain less than a certain threshold balance. I think I read that down the road (2017?) the banks must go back and include these pre-existing accounts. I could be wrong about that, and if somebody challenges me I’m not going to go looking to prove it at this time. Let’s wait and see what the Canadian FATCA (dis)agreement looks like.
The bottom line is that I think it is unwise to think that one can lie or hide and not be given up to the IRS unless you have no financial accounts (including joint) in your name. There are people here who will disagree with this, so you read and research and decide for yourself.
I think we will be getting more and more people like Nick showing up at Brock with the same questions.
Nick, thanks for joining us here. We will try to answer your questions. WhatAmI’s answer is a good start. Look for information and much valued support of each other here.
@treehugger, I am not sure how to answer your question. I am not sure if anyone knows what the current situation is. We had this information http://blogs.vancouversun.com/2011/08/24/verbatim-what-canada-says-about-collecting-irs-non-filing-penalties/ and also this question that NDP MP Mai posed in Parliament http://openparliament.ca/debates/2012/3/13/hoang-mai-1/
Question No. 412
Questions Passed as Orders for Returns
Routine Proceedings
March 13th, 2012 / 10:10 a.m.
Question No. 412–
Mr. Hoang Mai:
“With regard to the Canada Revenue Agency’s (CRA) responses to the provisions of the Internal Revenue Service (IRS) regarding the Report of Foreign Bank and Financial Accounts (FBAR): (a) according to the government’s analysis, do the IRS provisions comply with the provisions of the Convention Between Canada and the United States of America With Respect to Taxes on Income and on Capital and its amending Protocol (2007); (b) are there Canadian exemptions to FBAR; (c) has Canada negotiated the FBAR provisions with United States Treasury Officials or the IRS, (i) at what time was the government made aware of these provisions, (ii) how long did it take for Canada to respond to the changes made by the IRS and the United States Treasury; (d) how will the government ensure that the CRA does not act on behalf of the IRS to collect revenues and penalties; (e) has Canada informed dual citizens about their tax obligations resulting from FBAR; (f) what was the number of exchanges of information between Canada and the United States of America this year and during the past ten years regarding FBAR, (i) has the CRA set internal deadlines to be able to respond to exchange of information requests in a timely manner, (ii) will Canada work to improve bilateral cooperation on this issue, (iii) has there been an increase of exchange of information requests at the CRA due to FBAR; (g) will the government lose revenue as a result of the implementation of FBAR; (h) what are the cost implications emanating from FBAR (i) for the government, (ii) for the CRA, (iii) for Canadian banks, (iv) who will absorb these costs, (v) are there other types of non-financial costs such as efficiency or fairness reductions; (i) how many complaints has the CRA received regarding FBAR or related vexatious inquiries by the IRS, (i) what are the main complaints, (ii) what has the CRA done concerning these complaints, (iii) what department at the CRA is in charge of dealing with complaints of this nature, (iv) will the CRA cut Full-Time Equivalents from that department or reduce its funding, (v) has the office of the Taxpayers’ Ombudsman looked into the matter; (j) will FBAR prevent double taxation of pre-migration gain; (k) has there been an increase in arbitration cases due to active procedures by the IRS, (i) what departments are most affected, (ii) has the CRA cut Full-Time Equivalents from each of these affected departments or reduced their funding; (l) will FBAR affect different saving vehicles such as, but not limited to, (i) Registered Retirement Savings Plans, (ii) Registered Education Savings Plans, (iii) Registered Disability Savings Plans, (iv) Tax-Free Savings Accounts; and (m) how many Canadian-American dual citizens are affected by FBAR and does Canada have contact information for the dual citizens affected by FBAR? ”
Read the answer that MP Mai got:
http://isaacbrocksociety.files.wordpress.com/2012/03/irs-fatca-q-413.pdf
Finance Minister Flaherty originally said that the CRA would NOT assist the US in collecting (FBAR form filing) penalties imposed under the US Bank Secrecy Act against ANYONE in Canada – whether Canadian citizen or residents. He also said the CRA would not assist the US to collect US income tax or penalties if the person so assessed by the US was also a Canadian citizen at the time the tax assessment was incurred (so it is very fortunate that you were born in Canada and so have been a dual from birth ) http://maplesandbox.ca/wp-content/uploads/2012/08/Flaherty-to-Blaze.pdf . Flaherty originally decried FATCA as an unecessary and unwarranted imposition and intrusion on Canada and Canadians.
However, then after lobbying by the Canadian banks and allied investment industry groups, Flaherty started to change the tone of his replies somewhat http://maplesandbox.ca/wp-content/uploads/2012/08/Letter-from-FLaherty.pdf
Now the Finance Department has had a notice that they have been negotiating a FATCA IGA Intergovernmental Agreement since at least November 2012. http://www.fin.gc.ca/treaties-conventions/notices/unitedstates-etatsunis-eng.asp
We do not know the outcome. One Credit Union newsletter indicated that the Finance Ministry would not give notice to the Canadian public until perhaps weeks AFTER any FATCA IGA was signed. We only know that there have been ongoing negotiations.
We have read that there may be exceptions to FATCA for smaller credit unions but have no idea if this will be the case.
We have been contacting MPs and the Minister of Finance Jim Flaherty to express our concerns and opposition. Those here and at Maple Sandbox http://maplesandbox.ca/ have also been investigating whether there are grounds for a Canadian Charter challenge. And have contacted the CCLA http://ccla.org/2012/12/04/ccla-registers-privacy-concerns-over-ongoing-canada-u-s-information-exchange-negotiations/ . The Green Party also successfully got this Freedom of Information request answered https://www.greenparty.ca/media-release/2013-03-13/implementation-fatca-likely-unconstitutional-says-leading-constitutional-ex
If the Harper government has signed a FATCA IGA – as the Finance Dept. website indicates they intend to, they have not seen fit to debate this in Parliament or notify the affected Canadian taxpaying voting public.
The Harper government and Flaherty have NOT said how/whether they will protect us or whether they will somehow assist the US in collection along with turning over our data. If they do not assist the US, as far as I understand, then there appears to be doubt as to what the US can do on Canadian soil – i.e. inside Canada. They have been keeping it secret, although they have been sharing information about the negotiations all along with the Canadian Bankers Association and apparently also with Credit Unions in Canada. https://www.google.ca/search?q=credit+unions+canada+fatca+connections&ie=utf-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&gws_rd=cr&ei=AMLUUtnJC-KosASn8IC4DQ#q=%22Credit+Union+Central+of+Canada%22+AND+connections+AND+fatca&rls=org.mozilla:en-US:official
Sorry not to be able to definitively answer your question.
One very important thing is not to act out of anxiety and rush into any action. It is very important to get a better idea of what your options are, and to read up on this as much as you can before making any decisions. You may have more options because you were born in Canada, particularly if you have never lived or worked in the US, never had a Social Security number, never had a US passport, your birth was not registered by your parents with the US consulate, and you have never voted in the US.
Sorry not to be of more help. We can provide peer to peer support but it is not legal or tax advice.
@ badger
That’s a perfect summary. I’m keeping it on file. You’ve been awesome today. I think you have a fantastic filing system to be able to pull things like that together.
@ treehugger
Like badger says … stay tuned … don’t let go of that tree until you are more confident of what else there may be out there to grasp.
Treehugger. Sit tight. The IRS can’t collect from Canadians. They don’t know you exist and won’t unless you tell them.
Nick, This is how it will work. Existing accounts- the bank doesn’t know you are a dual, new accounts- they will ask something like this-‘citizenship?’ or ‘ is there a reason you can be considered a US person?’
The answer would be up to you.
Accounts under $50,000 us. and registered accounts will be exempt.