Barrie McKenna reports about the negotiations between Washington and Ottawa to “temper” FATCA’s requirements, through a government to government sharing arrangement. Barrie called me yesterday looking for a reaction. I hope the quote is pleasing to everyone:
“The idea that any of our financial information would be given to the IRS is an abomination,” said Mr. Dunn, 48, who is in the process of giving up his U.S. citizenship and filing back taxes to end his obligations to the IRS.
In any case, that’s the right reaction. As a sovereign country, why should we give the United States the keys to the financial wealth of our residents? Here was my reaction in the comments section:
Thanks Barrie. I am in the process of expatriation, the tax portion (filing final tax returns and the Form 8854 exit tax form). The State Department portion is already done. I received a bonafide Certificate of Loss of Nationality, which I can now show my banks so that they are no longer obligated under FATCA to divulge my account information to the United States. This seems to be the only way to protect oneself.
I think as I reflect about the situation, the problem is simply this: Does Canada want to protect her tax base? Then she should not reveal account information of a single resident of Canada, whether a US citizen or not, to any foreign power, especially her neighbor to the South. It is not the right of the United States to tax the Canadian tax base. I know of a couple in Vancouver who sold their home and filed their US taxes and their US tax liability was in the tens of thousands. Why? Because Canada doesn’t tax [capital gains on] a person’s primary dwelling–it is one of the few tax breaks that we get up here: so that we homeowners can buy a new house with the money or live out our old age in a retirement home. It is an abomination that this couple should have to pay taxes on a house sale in Canada. This is a violation of the Canadian tax base.
And if our government allows FATCA to happen, then the million or so US citizens living in Canada will have to renounce their US citizenship as that will be the only way to prevent the IRS from pillaging their wealth through fines and taxes. Perhaps I should also mention 8938 and FBAR requirements, which subjects Americans with offshore accounts to exorbitant fines of up to 300% of one’s account balances? But then the Canadian government wouldn’t want to expose residents of Canada to that kind of draconian penalty base, would it?
Join as at the Isaac Brock Society (http://isaacbrocksociety.com ) to learn more of our efforts to fight this nonsense.