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.
Now this article proves that our great Canadian government can defend us when it comes to the really important questions of human rights:
http://fullcomment.nationalpost.com/2014/03/06/jonathan-kay-canadian-porn-needs-to-explore-canadian-themes/
“For failing to broadcast sufficient levels of Canadian-made pornography — and failing to close-caption said pornography properly — a trio of Toronto-based erotica channels has earned a reprimand from the Canadian Radio-television & Telecommunications Commission.”
Now I really feel protected from the American porn industry’s invasion of Canada. Too bad we don’t have the same protection against FATCA!
Ah, well, looks like CRTC has its….errrr….standards.
http://www.tax-news.com/news/ACA_Urges_Congress_To_Adopt__ResidenceBased_Taxation____63955.html
‘ACA Urges Congress To Adopt Residence-Based Taxation’
by Mike Godfrey, Tax-News.com, Washington
07 March 2014
“…..It has become noticeable that even Americans abroad who are in full compliance with US taxes are being significantly affected – “accounts are being closed due to FATCA, investment in local non-US mutual funds is impossible due to the passive foreign investment reporting requirements, and efficient saving for retirement is not possible due to the US tax treatment of contributions to foreign pensions.”
In addition, the 3.8 percent Medicare Tax is being imposed with no allowance for foreign tax credits, “which is blatant double taxation of Americans abroad, (and) is all the more objectionable as Americans abroad do not even have access to Medicare.”
As all of these problems is put down by the ACA to the “unique CBT coupled with aggressive US techniques to stop tax evasion,” and Congress is urged by the ACA “to support tax reform to adopt RBT, the efficient and fair taxation system applied throughout the entire rest of the world..”….
‘Treasury Official Says Penalty Grace Period Unlikely for FATCA’
March 5, 2014
“The IRS and the Treasury are not considering providing a grace period for penalties for failure to comply with FATCA, which begins on July 1, according to a Treasury official speaking at a recent conference. Quyen Huynh, an attorney-advisor in the Treasury’s Office of International Tax Counsel, also repeated prior statements by the Treasury and IRS officials that the July 1 effective date of FATCA will not be delayed further despite the fact that the IRS has still not finalized several tax forms related to FATCA.
At that same conference, the Treasury’s International Tax Counsel Danielle Rolfes stated that the Treasury believes that the “Common Reporting Standard” recently published by the OECD and endorsed by the G-20 countries was 99% consistent with FATCA. However, the United States will continue to rely on the Model 1 Intergovernmental Agreements (“IGAs”) as the primary U.S. vehicle for implementing FATCA and avoiding withholding taxes. Rolfes acknowledged that the United States currently does not have legislation in place that would permit the U.S. to comply with reciprocal reporting under FATCA or the OECD’s Common Reporting Standard, but added that the Administration was committed to pursuing such legislation.”
http://www.cadwalader.com/thecabinet/regulatory_updates.php?ID=7327&date_filter=30
REPEAT:
“..[the Treasury’s International Tax Counsel Danielle Rolfes] Rolfes acknowledged that the United States currently does not have legislation in place that would permit the U.S. to comply with reciprocal reporting under FATCA or the OECD’s Common Reporting Standard, but added that the Administration was committed to pursuing such legislation.””
Do as I say, not as I do. Might makes Right. FATCA Extortion. Because we’re the US, that’s why.
Ok, I seem to be slowly grasping the big picture but have a really dumb little question. Should I be asking the Royal Bank if they have any US indicia on me or would I just be exposing myself? I guess if they say yes I will just close my accounts but if they don’t have me flagged it would just be easier to stay put. Sometimes the obvious naggly details elude me.
@Char…
This has been posted many times on ISB, but clearly answers your question about “should you ask”
http://youtu.be/ltmMJntSfQI
OK, that got the message across quite clearly, thanks. (Plus gave me a well needed chuckle). With the horrifying fact that I’m going to be blown up no matter what I do I’ll just find a wee Mennonite Credit Union out where I live. Might have to give up internet banking but everything has its plusses and minuses. Just have to stay under the radar till I can renounce.
@Charl, soon those wee Mennonite Credit Unions will have over 175 million in assets.
Char,
You could ask the Royal Bank what information they have on you in general, as part of a “privacy/personal information check-up” – have them verify your SIN, date of birth, address, driver’s licence etc. Ask them “anything else?” “that’s everything?” If you are dealing with a front line teller, it is almost certain that they know nothing about FATCA and don’t have a clue about what you are really checking for, and will have forgotten about who asked for which account by next week.
If you get this sense in your interaction with the bank employee, you could venture “any information about place of birth or citizenship?” I would NOT ask anything specific regarding the US.
I have done this a few times and it does provide some reassurance that I (for now) look like any other Canadian in the bank’s computer database account info.
Read this report with FATCA and FBAR in mind: http://www.ipc.on.ca/images/Resources/pbd-privacy_paternalism.pdf
‘The Unintended Consequences of Privacy Paternalism’
Ann Cavoukian, Ph.D.
Information & Privacy Commissioner
Ontario, Canada
Khaled El Emam, Ph.D.
Canada Research Chair
in Electronic Health Information
University of Ottawa
March 5, 2014
An in light of the report, consider the questions and concerns we have had regarding:
– lack of redress for data leaks and data theft under FATCA and the BSA FBARs for all those who are required to report, or who FIs and NFFIs will automatically report on.
– lack of redress, notice, transparency, accountabililty for misappropriation of the data collected and remitted to the IRS and Treasury – and from thence onwards stored, shared, disseminated with NO controls or transparency or accountability to any and all agencies as the US chooses as per Homeland Security and Patriot Act, on accounts jointly held by NON-US person spouses, family members, estates, trusts, business partners and others who have NO US connection or legal obligation. They own that data and their own personal information. FATCA denies NON-US persons control over their own personal and account information.
– the intent and efforts
of Senator Levin to make certain that the information collected under FATCA NOT be subject to any limitations such as those which govern the sharing of income tax return information. See; “….A letter written by Senator Carl Levin (D-MI) to the IRS originally tipped Jatras off to the FATCA privacy concern. Referencing United States Code Chapter 26, Section 6103, Levin argues that foreign bank information of US citizens should be legal to collect:
FFIs are not, after all, U.S. taxpayers, and will not be supplying tax information on behalf of their U.S. clients; they will instead be providing information about accounts opened by U.S. persons. The U.S. Supreme Court has long held that bank account information is not inherently confidential but is subject to inspection by law enforcement and others in appropriate circumstances. Foreign account information is too important to a wide range of civil and criminal law enforcement and national security efforts to be designated as tax return information bound by Section 6103’s severe restrictions on access.
….”… http://motherboard.vice.com/en_ca/blog/the-us-surveillance-dragnet-extends-to-foreign-bank-data-too
Interestingly, so far, I have not seen them touch the question of the misappropriation of NON-US person’s personal and financial data. I suspect they hope that will not get too much attention. They might say that if non-US persons want their data protected that their only recourse is not to have joint accounts with US persons. That I think is a very weak claim. Too bad the Privacy Commissioner of Canada doesn’t appear to see fit to address that – or anything else in the FATCA IGA as far as I can see. Why is the Ontario Privacy Commissioner able and proactively interested in our data protection, but the Privacy Commissioner of Canada – not so much; the absence of information about FATCA and the FATCA IGA on her website is glaring. When you do a search, this is all that comes up; http://www.priv.gc.ca/search-recherche/index_e.asp?rc=1&lg=eng&ss=fatca&cn-search-submit=Search 2 results.
Read some of the excerpts of the ‘The Unintended Consequences of Privacy Paternalism’ report co-authored by Cavoukian with FATCA and FBAR in your mind’s eye:
“Everyone agrees that greater accountability for the uses of personal
data is critical.”
18
“……However, this proposal shifts the burden of proof to demonstrate the existence
of harm to individuals, with regulators officiating such cases to document the harms, to prove
causality, and then seek redress. Proving the causality of harms is notoriously difficult to do, and
will likely become even more so in the current era of complex, interconnected global information
systems and networks that are increasingly opaque to both individuals and oversight authorities.
Even today, harms arising from cases of identity theft due to a security breach are difficult to prove.
Similarly, establishing links between poor organizational data-handling practices and the negative
effects of individuals being erroneously placed on a watchlist or other similar blacklist, losing an
employment opportunity, paying a higher insurance premium, being denied health coverage, or
suffering a damaged reputation or the inability to travel, can be a Kafkaesque experience.
While superficially appealing in theory, in practice, harms tests are far too narrow a basis
for effectively protecting privacy in this day and age.
19
As the name implies, harms tests are fundamentally reactive, allowing harms to arise rather than proactively preventing the harm, right from the outset…….”……… http://www.ipc.on.ca/english/Resources/Discussion-Papers/Discussion-Papers-Summary/Default.aspx?id=1381&print=1
On a side note, the Privacy Commissioner of Canada is now Chantal Bernier, not Jennifer Stoddart (who has now joined IAPP https://www.privacyassociation.org/publications/stoddart_joins_iapp_board ). “..On November 27, 2013, Chantal Bernier was appointed Interim Privacy Commissioner of Canada beginning December 3, 2013. She was Assistant Privacy Commissioner of Canada from December 2008 to December 2013.” http://www.priv.gc.ca/au-ans/bio_cb_e.asp
@badger
well done. You always come through with the most relevant information
You bring up a good point on privacy and the protection of it.
This may sound silly but I watch THE GOOD WIFE regularly I find the series touches on real law situations often before the general public is aware of them . It also makes these law cases understandable to the public.
Last night”s episode touched on the NSA and its spying on citizens and how it passes on the information collected to various agencies.
if anyone can bring up the episode please watch. You don’t have to be a regular viewer of the series to understand the point the episode is making.
http://www.tv.com/shows/the-good-wife/parallel-construction-bitches-3011171/
Don’t know if anyone else is getting this email from Washington Times that they are sending out regularly to their mailing list. Warning: There is a product for sale and this is NOT an endorsement.
The US has a highly successful international financial service industry that is important to the US economy, exemplified by, firstly, the international financial centres such as Miami and New York) of over a half trillion dollars of foreign deposits of high net wealth individuals whom many experts allege are not tax and exchange control compliant in their home countries; secondly, over 900,000 Delaware companies is the second to Hong Kong, and ahead of British Virgin Islands (BVI is actually third in the world);[1] and thirdly, the US territories’ offshore regimes, reducing the effective US corporate and income tax rates below 3.5 percent.[2]“
In 2011, 133,297 businesses incorporated in Delaware. Delaware has more corporate entities than people, reports Leslie Wayne of the New York Times — 945,326 to 897,934. These absentee corporate residents account for a quarter of Delaware’s total budget, roughly $860 million in taxes and fees in 2011.[3] Moreover, the economic spill over impact for Delaware includes substantial employment and professional fees to Delaware business participating in the incorporation and advisory industry. Delaware is just behind China’s Hong Kong in number of annual incorporations and overall incorporations, and well ahead of the UK’s Virgin Islands (British) both in terms of offshore business and the dollars earned from that offshore business.
http://profwilliambyrnes.com/2014/03/14/the-size-of-delawares-international-offshore-financial-center/
Wondering if anyone has any suggestions on how to approach my bank to find out about US indicia on my accounts? It seems like it would be a delicate thing, but perhaps I’m overthinking it.
Never mind. I didn’t make it to the last pages of comments where I see there is some discussion. Thx all –
Local bank vs. Bank with local client base
Just looking for confirmation, but it seems that people are confusing the two above terms. If I read it correctly, the local bank is subject to the $175 million limit and has no reporting requirement, while the bank with a local client base has no size limit, but a limited reporting requirement…it does not have to report any permanent residents of Canada unless they change their address to one outside of Canada. Checking online, one can see that most credit unions outside of Quebec require Canadian or even provincial residency.
Would someone be able to confirm or refute this interpretation?
@Petit Suisse
I agree with your interpretation. The CRA guidance was supposed to be out by now but it’s not. This page might be a good one to watch for it (see where it says “Under development”):
http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/menu-eng.html
The problem is that some credit unions whose web sites say you must be a Canadian resident have a parent credit union which does not have such a restriction, so they will _not_ be exempt. For example, this is expected to apply to Implicity Financial.
Some quotes that I’m sure you’ve seen:
From http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/fq-eng.html#q2-13
From http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/fq-eng.html#q3-2
Since FATCA will require institutions to have _new_ customers certify that they are not US persons after June 30, I’m thinking of opening 5 or 10 accounts at various credit unions now, with the hope that a few of them will be exempt from FATCA reporting as being available to Canadian residents only.
I’m thinking of doing this because the 2 that I contacted so far, asking if they will be deemed-complaint and exempt due to resident-only requirements, basically said to “wait until after June 30 to see what happens”, or, “it’s too early to know”, etc.
Does anybody see any problems with this idea?
It’s not necessary. They are not permitted to ask your place of birth and you don’t need a passport to open an account.
See this from other thread: http://isaacbrocksociety.ca/2014/03/14/b-c-freedom-of-information-and-privacy-association-speaks-out-against-fatca-iga/comment-page-2/#comment-1232449 and badger’s comment after. Correct: disgusting.
@DoD
So, you just say you aren’t a US person even if the US thinks you are? If you open an account now, they still don’t ask (the few that I’ve looked at). After June 30, they are supposed to ask. I’m still thinking it seems like a good idea to open accounts before June 30.
From http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/ndvdls-eng.html
Point is, it says they may ask for your US status for a new account, but don’t have to. They can go on using current procedures, like two Canadian IDs. Will they? CRA guidance will be very, very interesting …
As to credit union parent institutions, most credit union Web sites seem to be pretty explicit as to who they’re connected with.
The big question to me is whether the account balance thresholds will be respected, and my gut feeling is that if it is cheaper to do due diligence on all accounts, that is the way the banks will go. If it is cheaper to avoid reporting accounts under the $50k threshold, they will go that way. I wonder why the IGA specifies that small accounts may be checked only if CRA’s implementation rules so permit. Could it be that CRA wanted the leeway to prohibit bothering the minnows? Politically, that would make sense. And if they don’t allow extra due diligence to indicia-free accounts between $50k ans $1 million, that’s a lot of people not bothered. Remember that politically, it’s better to make it appear to be a millionaire’s problem. Voters tend to get less upset by injustices that affect others than themselves.
I agree with WhatAmI in opening new accounts now, before June 30 – I have already opened 2 new accounts over the last month and plan on 2 more. It’s a pain with all the extra unnecessary paperwork and spreading money around but I don’t want to take a chance on what FI’s may do after July 1.
@ Mr. A. and WhatAmI
I guess that’s a strategy to move money to multiple accounts but I’m not going to bother because I need to simplify things for my rapidly aging mind and I can’t do that by opening more accounts. In contrast, I have been spending down accounts and closing them. I’ll continue until there is not much anyone can take from me. There isn’t much I want for myself so I’ve been dispensing money in order to help out elsewhere on whatever or whoever strikes my fancy. I’ll try to retain just enough to not become a drain on Canadian society in my dotage. Not much of a plan I suppose but it’s simple.
@Em
It would be interesting to explore how FATCA and CBT has influenced and changed spending habits – from those cross border shopping trips, to how we invest our money. When we learned about our tax filing obligations we were too scared to make any moves, and as a result missed what could have been some very good investment opportunities. Also, on the rare occasion that I buy a lottery ticket, I put it in a non-USP family member’s name to avoid the 38% contribution to Uncle Sam if I happen to win.