We’ll be getting together for lunch Saturday, 16 November, at 1:00 pm, at Montana’s BBQ Restaurant, 1750 Ogilvie Road. Plenty of free parking on site, also accessible by OCTranspo.
We’re currently expecting 10 people. Hope you can join us too! Please rsvp by leaving a comment or e-mail me at pacifica@isaacbrocksociety.ca
Seeing this at the last minute? Please rsvp, if you can. If not, just come and join us.
A great FATCA backgrounder from John Richardson, published in American Expat Finance yesterday. FATCA articles aimed at the general public often focus on the impact on individuals, but this one primarily covers the macroeconomic impact. It packs a lot in a short article, good for sending to people who want to know more about FATCA (friends) or who should know more about FATCA (policy makers).
American Expat Finance Editor’s introduction below, article itself continues next page. Reprinted with permission of American Expat Finance.
Over the last few weeks and moths, more media attention than usual has been paid to the 2010 Obama law knows as the Foreign Account
Tax Compliance Act (FATCA). And invariably, we have been noticing, journalists from respected media organizations like The Guardian and Financial Times newspapers in London keep referring to it as a “tax evasion law,” no doubt because that was its original purpose.
That may well have been true in 2010, says Toronto-based expat lawyer and expat rights campaigner John Richardson…
But, he argues here, as anyone familiar with FATCA’s massive impact on individuals who don’t live in the U.S. now – and indeed haven’t for decades and possibly never did, and are tax residents of other countries – it has evolved into an all-but- impossible-to-avoid “extra-territorial money-sucking machine.”
It has also made it very difficult for such individuals to engage in normal financial and retirement planning – or even to get, and keep, a local bank account.
And while it may remain a disincentive for Homeland Americans to attempt to hide their wealth (the way some used to) in Swiss banks, FATCA (along with the Common Reporting Standard, as the OECD’s global version of FATCA is called), is now playing a role in enabling the U.S. to act as a tax haven to wealthy individuals in other countries who are seeking to keep their personal wealth from their own tax authorities.
The fact that the U.S. hasn’t signed up to the CRS, arguing that it has no need to – because FATCA gives it all the information it needs to know about its own citizens – helps to make this possible, Richardson points out. Continue reading
Thanks to Calgary411 for posting this on the Media thread. There’s been a lot of discussion on this, so I’ve created a separate post for it and moved the comments here.
Donors in this 2019-2020 lawsuit funding round include a mix of long-time (since 2014) supporters and first time donors. Thank you all.
CANADIAN FATCA LITIGATION UPDATE December 5, 2019:
You are contributing to raising the money needed to pay the costs to litigate with the Government of Canada to prevent Canada from imposing the U.S. FATCA law directly on Canada and Canadians.
The Alliance for the Defence of Canadian Sovereignty asks you for $20,702 in 10 DAYS to make $45,000 December 15 payment for appeal of FATCA Federal Court decisions.
You can DONATE by cheque, cash, PayPal (easiest) and transfers.
Gwen and Kazia, two brave Canadian citizens having no meaningful relationship with the U.S., are appealing on your behalf two Federal Court decisions to the Canadian Court of Appeal.
The grounds for appeal will include violations against their autonomy (Charter section 7), privacy (8) and equality (15) as well as arguments that the ruling was improperly based on the finding that the Income Tax Act is primarily regulatory in nature, and that factors such as the relationship between Canada and United States were not properly dealt with. Fleshed out details of appeal grounds will be provided in the Factum, likely early next year.
Gwen and Kazia ask for your help in paying for the legal costs of the appeal. If you feel that FATCA IGA laws harm you or someone that you know, PLEASE DONATE.
CANADIAN FATCA LITIGATION UPDATE September 30, 2019: Gwen and Kazia file Notice of Appeal
Appellants Gwen and Kazia have instructed Vancouver lawyer Mr. Greg Delbigio to appeal the Martineau and Mactavish Canadian Federal Court FATCA IGA legislation decisions.
A brief Notice of Appeal was just filed today (September 30, 2019) with the Canadian Federal Court of Appeal. The grounds for appeal will evolve and be broadened with detail at later stages. For the appeal process to continue we will need to raise monies quickly to pay for the legal costs.
Support the UK legal challenge against #FATCA. Indiscriminate #data transfers are unlawful. #AccidentalAmericans #AmericansAbroad #GDPR #DataBreach #HumanRights @Jesse_Norman @ft @UKParliament @Jude_KD @PreetKGillMP @DougChapmanSNP @guardian @SophieintVeld https://t.co/CoCw5SE6BW
— Jenny
The link in the above tweet links to a post describing this upcoming litigation. There is (along with the presumed upcoming ADCS appeal in Canada) growing pushback against FATCA.
From ‘Accounting Today‘ September 6, 2019:
The Internal Revenue Service outlined new procedures Friday to allow some expatriates who have relinquished their U.S. citizenship the chance to comply with their U.S. tax and filing obligations and in turn qualify for relief from back taxes, penalties and interest.
The Relief Procedures for Certain Former Citizens will apply only to individuals who haven’t filed U.S. tax returns as U.S. citizens or residents, owe a limited amount of back taxes to the U.S. government ($25,000 in the past six years), and have net assets of less than $2 million. Only those taxpayers whose previous compliance failures were non-willful can take advantage of the new procedures, according to the IRS. Many in this group may have lived outside the U.S. most of their lives and not been aware that they had U.S. tax obligations.
…
A post for Brock readers to analyze and discuss.
As well, analysis / commentary here:
IRS provides limited tax relief for certain individuals renounced(ing) after March 18, 2010
Update – My thoughts the Morning After – September 7, 2019:
After having digested this for a day (it was announced the afternoon of September 6/19, I offer the following thoughts:
I think that this IRS announcement/program has value. It may be that those who have renounced would NOT want to come into compliance (although there are certainly some who would – just to bring closure). But, the IRS announcement makes clear that this procedure is available to those who have not yet renounced/relinquished and wish to do so in the future. The point is that these future relinquishers can:
1. Come into tax compliance and have up to $25,000 USD in tax forgiven; and
2. Come into tax compliance without getting a Social Security number. This has the potential to be enormously helpful to a lot of people (but this is a minority view). It’s a way to make the compliance/renunciation process easier and less expensive (tax forgiveness) than it has been to date.
Of course, this will anger the thousands who have previously come into compliance, paid taxes and gone to the trouble of getting a Social Security number.
But, I can so how this new program has value.
Now on to the post as originally written …
Breaking news – just released today – September 6, 2019
Introduction – your assignment if you choose to accept it …
After having read this post, please consider the following questions/thoughts and comment …
1. Do you see similarities between the proposed wealth tax and the tax regime that is imposed on Americans abroad?
2. Do you see how FATCA and citizenship-based taxation provide the support and foundation for a wealth tax?
3. Do you believe that a proposed wealth tax would make it more likely that the United States will retain citizenship-based taxation?
4. Note that the Holding bill is NOT a move away from citizenship-based taxation. While retaining citizenship-based taxation it removes foreign INCOME from the U.S. tax base.
On to the post …
The Isaac Brock Society has been a leader in providing education about the U.S. policy of citizenship-based taxation, FATCA (information exchange in general) and offshore accounts (to the extent that the United States regards the local day-to-day financial accounts of Americans abroad as offshore relative to the United States). The purpose of this post is to suggest how these three things have become relevant to U.S. tax policy in general and the U.S. election in particular. You may know that Massachusetts Senator Elizabeth Warren is proposing a wealth tax. As a result, it is likely that a wealth tax will receive significant discussion (at least among the Democrats). Interestingly, President Trump (before he became President) had flirted with the idea of a wealth tax (although I suspect that he would not support a wealth tax in his current role as President).
Why Americans abroad are uniquely positioned to contribute to the debate on a wealth tax
Individuals who are tax residents of other countries and are subject to U.S. worldwide taxation are living the confiscatory effects of U.S. tax policy. They are already subject to taxes that are not income taxes but are in reality wealth taxes. A few examples include: phantom capital gains taxes, Transition tax, GILTI, etc. The cost of filing returns and information reporting is also a wealth tax. In addition, they are already subject to the kind of information reporting that would be required to make a wealth tax work.
Thanks to @HelenBurggraf for this about the upcoming problems created by the Dutch banks. You can see the actual video from the Dutch banks here – is this information accurate or not? https://t.co/WW1K973T4l https://t.co/wR3hhghhO7
— U.S. Citizen Abroad (@USCitizenAbroad) August 31, 2019
Thanks to Helen Burggraf at American Expat Finance for reporting on this story. Helen was recently interviewed by the BBC on this topic. (See also this article that appeared on the STEP blog.)
The most important issue in the world today (forget about the demonstrations in Hong Kong) is whether US born people can supply banks with a US Social Security Number! Yes, it’s time to formally document, those undocumented US born people, who have always lived in other countries!
By way of background, the FATCA IGAs require that the banks include an individual’s TIN (Social Security Number) as part of FATCA reporting. Because the “powers to be” in U.S. Treasury, never contemplated that there might be accidental Americans (what in the world are those?), who did not have a Social Security Number, Treasury relaxed the requirement of a Social Security number until December 31, 2019. It is NOT clear what happens on January 1. 2020. Do the banks cease to be compliant with their obligations under the FATCA IGAs? Are the banks required to close the accounts of those life forms, who were born in the USA and are living as “undocumenteds” without a US Social Security Number? It looks like the Dutch banks think that account closures may be appropriate. There have also been “bank noises” coming out of the UK and France suggesting the same thing.
The UK, France, Netherlands (and Canada) have the same kind of IGA. Actually, most of the world has the same FATCA IGA. This means that “accidental Americans” the world over may be having problems. It’s just that “USness” (usually based on indentification of place of birth) is more visible in some countries (Europe) than in others (Canada).
Since it’s the IGA that governs what is required to be disclosed, it’s helpful to look to the IGA to see what is actually required. Not a single media article has referenced the section of the various IGAs that would require the closing of accounts. But, no matter …*
As Ms. Burggraf writes:
In the latest development in what is becoming a fast-moving international story concerning the bank accounts of tens of thousands of “accidental Americans” living outside of the U.S., it has emerged that the Dutch Banking Association has posted an animated video on the home page of its website in which it warns such clients of the need to get their U.S. Social Security numbers – if they don’t wish to lose their Dutch bank accounts.
A spokesperson for a European accidental Americans organization said that the video appeared to suggest that Europe’s banks were “well on their way to becoming the willing agents of the U.S. Internal Revenue Service.“
The actual video (which is well worth the look) is referenced in the following tweet:
“I Spy” – the latest novel from Claire Kendal
I Spy by Claire Kendal – https://t.co/l4aw2tKPBg
— U.S. Citizen Abroad (@USCitizenAbroad) August 25, 2019
Why the book “I Spy” may be of special interest to Brockers and oppressed U.S. citizens the world over
Part of the book #Ispy by @ClaireKendal includes a discussion of the problems of being a "U.S. Person" born and living outside the USA and having one's life run by @citizenshiptax #FATCA, #FBAR, etc – amazing that this is now entering novels! https://t.co/mtmrqaV3kU
— U.S. Citizen Abroad (@USCitizenAbroad) August 25, 2019
Claire Kendal’s newest novel “I Spy” is a great read. Citizens of all countries will enjoy it. But, U.S. citizens are special. Therefore, the book contains a special section which will be best understood by them. The book contains certain insights that could be understood only by those who have lived the oppressiveness of U.S. citizenship. Not only does the book contain a description of the problems, but it even includes a description of a meeting with a “High End Condor”.
Starting on page 309 …
“Albert B. Matheson has the mega-watt smile of a superstar visiting from Mount Olympus. He is in his early forties, like Zac, and every move he makes his made with a snap. “Hey Helen, he says, snapping on a smile as he snaps open his briefcase. “Great to meet you.”
“Great to meet you too. I’m really curious about what the E stands for.”
“Ernest, my grandfather’s name. I do my best to live up to it.” He laughs. “So” he says, leafing through the forms I emailed earlier and his assistant clearly printed.
“Your US citizen father and British mother divorced when you were a baby, and you were born and raised in the UK. My main tip is for you to remain calm and not panic as you explore your next steps.”
Is this the kind of tip you charge $1600 for? Panic about what, Mr. Matheson?
“Call me Albert please. Your discovery of your U.S. citizenship and the tax obligations it brings.”
Seems like somebody in this book is having an OMG Moment. Free advice (not $1600) for those afflicted with this moment may be found on the Issac Brock Society.
Claire Kendal is on Twitter: http://www.twitter.com/ClaireKendal.
