Tag Archives: FATCA IGA Canada

Attn:Brockers

This afternoon I put a call into the CRA to request some info on Canada’s existing treaty with the US. They forwarded me to Competent Authority, the division of the CRA that deals with tax treaties. They are in Ottawa and can be reached at 613-957-2071. I spoke to a representative that had a great deal of info on the matter. I called with some general questions, she gave me info on the “Agreement”. Here is what she confirmed for me.

First off, the Ministry of Finance had some concerns about s.15 of the Charter of Rights and Freedoms. They concluded that Fatca reporting does not contradict or conflict with the charter.

1. FATCA is a reality. The agreement will be signed this summer. Info will be available on the CRA website beginning in September 2013.
2. All US persons in Canada are considered US residents for tax purposes according to the US, based on that, Canada considers us US residents as well.
3. Beginning in 2014, Canadian financial institutions will begin identifying US persons to report to the CRA. CRA will report individuals with bank account #’s balances, etc. to the IRS.
4. All bank accounts over $50K will be reported.
5. Registered account such as RRSP’s, RIF’s, TFSA’s and RESP’s are exempt (she did not mention RDSP’s)
6. If your bank account is held jointly with a non-US person, it gets reported as well.
7.CRA’s first wave of reporting to the IRS will take place in April 2015 and will cover 2013 and 2014. After that, balances will be reported once per year in September.
8. CLN/renounciation/relinquishment does not get you off the hook for taxation for 10 years. Your balances will continue to get reported for 10 years after issue of CLN.

She recommended that I get my hands on a copy of “A Tax Guide for Citizens in Canada” by Carswell.

There are many more questions that I would like to ask her. I encourage everyone seeking answers to call the CRA for information.

This means the time has come to organize the following legal actions:

1. Class action FATCA lawsuit – A “representative plaintiff” is required. This must be a “tax compliant” (who else would do this) U.S. person who has been “outed by a bank”. I know several tax compliant U.S. persons. One of them might be persuaded to act in this capactiy.

2. Complaints to provincial human rights tribunals – discrimination based on citizenship, national origin, etc.

3. Complaint to those at the UN responsible for the administration of the Universal Declaration of Human Rights

We are going to need some central coordination of these things.

I am going to try to transfer subsequent comments to Marie’s comment (as per your request). So, I have (at least for the moment) put all subsequent comments in one long comment. The idea (as per Em) is to try to create a new thread out of this important information. I would note that some of the information that Marie received is clearly incorrect (there is no obligation to pay taxes after one ceases to be a U.S. person). Nevertheless, the gist is significant.

It will be very interesting to see where Congress goes on the question of citizenship-based taxation. I have long been of the opinion that the US will have to move to RBT in order to get FATCA. I still would renounce though. Who in their right mind would want to be caught up in the fear of this any longer than necessary.

By the way, for those who have become lover of Canada in the last couple of years:

The Government of Canada, at the request of the banks,  is getting ready to cooperate with the IRS to destroy you.

As USXCanada always says:

Look out for yourself and your family first (in English).

On a practical level I think you can mitigate a lot of the effects of this by using a number of bank accounts at different banks to keep your balances low. Also, RRSPs are not reported. You should get rid of the TFSAs and carefully consider how to deal with the mutual fund issues. You do have time to organize your lives and we have time to organize the lawsuits.

But, taking the lead from “accidental” – It’s time!