The following response to the Isaac Brock Society appeared in a comment.
I am with the CBA and we have been following your discussion. We certainly understand the concerns that you have with FATCA. However, you seem to be under the impression that Canadian banks are planning to willingly go along with the FATCA requirements and this is certainly not the case. In fact, the Canadian banking industry agrees with your concerns and we have been and will continue to fight to change the extraterritorial reach of FATCA and lessen the impact it will have on Canadian banks and their customers.
We have information on our stance on FATCA on our website:
http://cba.ca/en/research-and-advocacy/47-regulatory-enviornment/598-foreign-account-tax-compliance-act–
For more than two years, the CBA and the Canadian banks have raised our concerns with the IRS and the US Treasury Department and have also done so through our membership in the International Banking Federation. We have also had discussions in Washington with IRS and US Treasury officials and Canadian Embassy officials. In May, the CBA made a presentation in Washington at public hearings before Treasury and the IRS and our president spoke out against FATCA in speeches in Calgary and Vancouver this spring. Here are the links:
http://cba.ca/contents/files/presentations/pre_20120515_irsfatca_en.pdf
Last week we also submitted an opinion piece with our concerns about FATCA to the Washington Post and we are waiting to hear back about whether it will be printed.
In Ottawa, we have raised concerns with officials from the Department of Finance, the Minister of Finance and the US Embassy. Finance Minister Jim Flaherty has supported our position and expressed his own concerns publicly and we appreciate the support from the Minister and his officials. And we are not alone in fighting this legislation. Governments and banking groups from around the world share your concerns and ours. You can find more documents here:
If banks were required to identify US persons under FATCA, they would not be doing this willingly. However, they may have no choice as FATCA is currently written because the non-compliance would have a much larger impact on more of the financial institutions’ customers. The penalty for being unable to comply with these complex rules is very severe for both banks and their clients. The penalty includes a 30 per cent withholding tax on all U.S. source income flowing to the bank and its customers, and a 30 per cent withholding tax on the gross proceeds of the sale of U.S. securities by the bank and its customers, and withholding on some portion of so-called “foreign pass-thru” payments. According to Statistics Canada, as of 2010 Canadian direct investment in the United States totalled nearly $250 billion. As outlined on our website, banks would only provide information to US authorities with a customer’s consent (http://cba.ca/en/consumer-information/40-banking-basics/597-us-foreign-account-tax-compliance-act-fatca-information-for-clients).
There is nothing in the Canadian Bank Act or the Access to Basic Banking Services (ABBS) Regulations that prohibits a bank from closing an account. The ABBS regulations give reasons why a bank can refuse to open an account for someone, but they don’t give any restrictions on closing an account. You can find information here: http://laws-lois.justice.gc.ca/eng/regulations/SOR-2003-184/page-1.html
I hope this is helpful in explaining why Canadian banks would comply, however reluctantly, with FATCA if it became necessary and why Canada’s banking industry, with the support of the federal government, will continue to fight for changes to the FATCA legislation. As your concern seems to be the requirements under FATCA, you may wish to add your voice to the growing opposition to this legislation by raising these issues with the US Treasury, the IRS and the U.S. embassy in Ottawa.
Maura Drew-Lytle
Director, Media Relations and Communications
Canadian Bankers Association
The following comments were received:
Joe SmithDear CBA
Are your member banks prepared to give up close to 1,000,000 bank customers and terminate their businesses?
@ Joe Smith
We are working hard to get changes to FATCA to lessen the impact on bank customers in Canada. While we are still hopeful that some changes may be made, the banks and other financial institutions also have to start preparing for its implementation even though they are reluctant to do so.
@Joe Smith, thanks for posting this. I just saw that I received the same email.
Joe SmithDoes anybody have updates on Credit Unions planned approaches? This could be a tremendous windfall for the cooperative movement if they pick up 1,000,000+ accounts, mortgages, loans, RRSPS and RESPS as well as tax-free accounts..
Tim@Joe Smith
While she is technically correct on the application of ABBS(re closing vs opening) effectively over a large portion of the population ABBS blocks closure. If someone was closed out legitimately one institutions they could simply go to another and demand to opened under ABBS effectively negating the point of the FATCA regs. The Washington Post part of the story is news to me and a good sign. The foreign pass through payment issue is in total violation of Canadian law under several court rulings.
Blaze@Maura: It seems you are cofirming our worst fears that there is nothing to prevent a bank from closing an account. This to me says Canadian banks may very well (even if reluctanlty) demand to know place of birth, request permission to provide information to IRS if that place of birth is in US and be prepared to close an account if that permission is not given.
Despite your protestations, this says a foreign law will take precedence over the rights of Canadian citizens and residents when push comes to shove.
Your comments are also in conflict with the following comments in a letter from a Vice-President of TD to DOT and IRS.
“If an FFI closed an account because such information was not provided, the purpose of ABBS rules would be frustrated and, in addition, the FFI would be subject to fines. Each violation of the ABBS requirements would subject the financial institution to a penalty of up to 200,000. Even if an FFI could close the account of an uncooperative account holder, an FFI could not refuse to reopen an account for such an individual if adequate identification under ABBS were again provided.”
Would you please clarify for us the following:
1. Is the information you provided correct or is the information in the letter from TD correct?
2, Under what legal authority would a bank be able to ask it’s customers where they were born or if they hold citizenship of a foreign country?
As I I told you in my e-mail, I have been in contact with a prominent Canadian lawyer. My bank can expect legal action of they ask me my place of birth or make a request to transmit private financial information to a foreign government.
You may be assured we are making our views known to government officials on both sides of the border.
In the meantime, your response is making my employee credit union look better and better.
Tim*
@Joe Smith
The latest from the Credit Union movement is a letter from Central One to US Treasury.
http://bsmlegal.com/PDFs/Central1.pdf
Basically they call to exempted completely. They also indicate that a significant number of individual CU’s will refuse to comply and thus Central One will have major problems. Central One also seems to indicate that if a solution is not reached soon the Canadian Payments Association and the Bank of Canada will get involved.
badger@Maura Drew-Lytle;
Thank you for your comments. I appreciate your interest in our concerns. As individuals, we have been speaking with our banks and credit unions and comparing notes. Some have also corresponded with some of your members. We have also written to Minister Flaherty, and other political representatives, as well as the Privacy Commissioner. Some have contacted US politicians, and the ACLU.
I appreciate the presentations that the banks have made – and I have read the presentations where available on the net, as have several others here. Opposition to FATCA in any form or origin is welcome. But, I’d quibble a bit about the nature/form/motivation of some of the opposition, since some of the CBA member’s investment affiliates have advocated not against FATCA itself, and the impact on clients, but in opposition to the ‘compliance burden’, and costs, thus are advocates for a government-to-government reporting approach to take the onus, costs and heat off themselves. It would help to deflect negative attention away from financial institutions and investment firms if they could point to government as the source of the implementation instead. If the Canadian government does agree to do that, there would of course be a cost – which would be paid for by all Canadian taxpayers. And since we all pay taxes to Canada, whether we also hold US taxable status as well, everyone in Canada will share in implementing the costs – with zero benefit. Whereas, banks, insurance companies, etc. will continue to have unimpeded access to US markets, with less direct cost borne by their shareholders. This is where our interests diverge quite a bit – I don’t want FATCA at all, and have no interest in settling for a less expensive version.
For example I don’t have the full article below, but I think this illustrates my point;
“FATCA Partners” agreement would limit compliance burdens, Canadian trade group says Feb 14 2012
by Emmanuel Olaoye
“Ian Russell, president of the Investment Industry Association of Canada (IIAC), said the changes would be a “very positive step” for Canadian firms if Canada signed on as a FATCA partner.
“It would resolve the problems of conflicts in privacy laws. We are obliged to provide information to foreign….” http://www.complinet.com/global/news/news/article.html?ref=152318 The IIAC has a member list here: http://www.iiac.ca/welcome-to-iiac/about-us/iiac-members , and you will see that there are members who have relationships with major Canadian banks.
I think I’d be more inclined to appreciate the efforts that banks have made, without as much criticism if they had tried to alert their customers in ways that would help marshall popular and political resistance against FATCA – rather than only post information on a website they would have no reason to look at. I note that banks aren’t alone in that. Pension plans have not followed up on the suggestions by affected account holders to notify their members of the pending crisis either. I haven’t seen any full page newspaper and media ads to that effect – unless I missed them. There has been surprisingly little coverage of FATCA domestically or in the US.
Re your comments:
“However, they may have no choice as FATCA is currently written because the non-compliance would have a much larger impact on more of the financial institutions’ customers. The penalty for being unable to comply with these complex rules is very severe for both banks and their clients.”
From the CBA site, this is the broad group of mostly Canadian citizens who will be affected:
The CBA site says the affected would include:
- A citizen of the U.S. (including an individual born in the U.S. but resident in Canada or another country, who has not renounced U.S. citizenship);
- A lawfulresident of the U.S. (including a U.S. green card holder);
- A person residing in the U.S.
- You also may be considered a U.S. person if you spend a considerable amount of time in the U.S. on a yearly basis. For example, some Canadian “snowbirds” may be considered U.S. persons for U.S. tax purposes. If you are unsure, contact your tax advisor.
- U.S. corporations, estates and trusts are also considered U.S. persons.”
Many of those above will also be dual Canadian/US citizens by birth or naturalization. Some may hold US only citizenship – but be decades-long permanent residents.
The CBA no doubt is working from its own estimated statistics of how many accounts would be affected – that would just be good business planning. I’d be interested in knowing what numbers you’re using. I think that it is at least an estimated million or more US taxable ‘persons’ in Canada (not just citizens, but duals, snowbirds, greencard holders, etc. Correct me if I’m wrong?
All the persons in the categories above would suffer directly from Canadian bank and financial institution collaboration with the FATCA regime. Those deemed by the US to be ‘taxable persons’ living in Canada, all have families, and many have single-citizenship Canadian spouses or other relatives who may hold joint accounts with them. Even if not jointly held, one member of the household – say a breadwinner – who is refused banking, has their account closed, or suffers a 30% witholding, will affect an entire Canadian family. Add to that all the Canadian business accounts that could be affected. And mortgages, and savings, pension, life insurance – and other types of accounts – since the list of what FATCA includes is longer than any small exclusions. That’s a lot of angry customers and a lot of affected accounts and assets.
Some FATCA compliance sites have advised their clients on ways of keeping this low key – so as not to alienate account holders during the process of implementation. I’ve been wondering if that is why when I look at the list of presenters at FATCA hearings in the US, we hear so little from them here at home. One pension plan opined that there was no need to get members upset – in the hopes that they’d be exempted from complying with FATCA. Problem is that people can’t make their objections known in a democracy unless they’re told what is brewing before it is too late. I would have thought that Canadian citizens and residents could be partners with their financial institutions in approaching our government with our concerns if we’d been alerted when this was first proposed.
How will joint account holders, and beneficiaries fare in this – when only one of them is a US taxable person with a FATCA obligation? How will banks treat this situation? I’m assuming that even the single-citizenship Canadians will have to prove that they are not American?
Account holders will have a choice? Won’t we be considered ‘recalcitrant’ then? What is the result of being recalcitrant? “If you do not complete IRS Form W-9 or provide your consent to disclose information to the IRS, your financial institution maybe required to withhold a tax of 30% on any U.S. source payments1 that you receive and send this money to the IRS. Also, your financial institution may refuse to open an account or may be required to close existing accounts.”
You say that banks will be forced to do this because of the impact on all their other clients. Well, who will be paying for the expensive systems to implement FATCA? Only those deemed US persons? Or will it be shared amongst all the other account holders – except that they won’t know that they’re paying for it will they?
Interesting comment you made re; no prohibition on banks closing an account.
“There is nothing in the Canadian Bank Act or the Access to Basic Banking Services (ABBS) Regulations that prohibits a bank from closing an account. The ABBS regulations give reasons why a bank can refuse to open an account for someone, but they don’t give any restrictions on closing an account“
That may be true, I don’t know. Does that make it any more palatable for the account holder – that it’s not actually prohibited? If the reason for closing an account hinges on identifying birthplace, US citizenship (for duals, placing US above Canadian citizenship held simultaneously – often through birth on Canadian soil), or merely US connections (ex. marriage to a US person – on joint accounts and investments). Could that be discrimination? We are in Canada. Shouldn’t Canadian law supercede US laws in our sovereign country?
It may be that the US will win, and FATCA will be imposed on us if our federal government gives in. Savings and assets are of paramount importance to most people – and that means we’re hardly likely to forget this episode in history. Neither will our non-US friends and family when we share with them what happened – even if it becomes legal to do.
If a million or more of us and our joint account holders and beneficiaries end up under the bus as a minor but unavoidable bump in the road, do you think that we will forgive and forget? I don’t think so. Some might be thinking that if and when credit unions – (who operate for and by their members), are also forced to cooperate, that we’ll have no alternatives, and thus we’ll have no choice. This may very well be the case. Perhaps we’ll have no good alternative other than a house full of piggy banks, but we’ll certainly remember who co-operated first, and who started to collaborate before it even became in force here in Canada.
We are fully compliant with the laws in Canada – our accounts are transparent, and are registered and reported with our SIN#s, post-tax earnings, we pay tax on any interest – the CRA already knows everything we have.
Canada is not a tax haven.
nobledreamerThe whole situation gets more depressing by the moment. I can’t imagine the IRS and/or Congress giving a hoot about the importance of Central 1′s ability to service the Canadian system, or whether the CBA wants to comply etc. They only care about what they want and since they can hold that 30% witholding threat over everybody’s heads, there seems to be nothing anyone can do. Unless all the governments were prepared to take the hit and tell them they wouldn’t comply. It is truly hard to fathom that one country can hold that much power over everyone else.
I wish my CLN would arrive. Among all the other negatives, I could not imagine being told I couldn’t have a bank account.
@Tim
perhaps I am missing something but I don’t see a section in the letter from Central One that indicates a significant number of individual CU’s will refuse to comply. Could you point this out to me? I would be thrilled, as all my $$ was moved to CU the minute I heard about FATCA.
@Petros: Is it possible to move all the comments which were made in response to Maura Drew-Lyttle over to this thread?
Maura Drew-Lytle wrote to Joe:
But the CBA is not planning to implement a Canadian law; rather FATCA is a super-territorial law passed by Congress and signed by the President of the United States. Since when did the CBA answer to the American regulator without giving Canadians a chance to have a say in the banking regulations that affect our lives? We voted for Parliment, not for Congress and the President. Thus, the CBA is planning to obey a law, but not any law that is applicable in Canadian Territory. Let me say this, if my accounts or the accounts of any Canadian residents are closed over FATCA, the CBA and its member banks will be seeing no end of the law suits that we will win. Because this is frankly a no brainer that a average law student could figure out; it is the values that are taught in Canadian Public schools. It is called the Charter of Rights. You can’t do any of this implementation without treading on the rights of people living in this land — people that even though they may have been born in the United States have rights, most of them as citizens of Canada.
*Blaze, yes. I’ll move them directly into the post itself.
FATCA violates the substantive equality under law that Canadians are guaranteed by Canada’s Charter of Rights and Freedoms. If Canadian financial institutions single out certain customers by birthplace, irrespective of their actual economic activity, location of assets, residence or physical presence, it’s simply discrimination based on nationality or ethnic origin. And in acting as enforcement agents for a foreign state, it exposes these individuals to harm. The term “US person”has no legal standing in Canadian law; all Canadians are equal under the Charter, regardless of place of birth.
FATCA would adversely affect US-born Canadian citizens who earn, bank and invest solely in Canada – long-term Canadian citizen taxpayers with no US economic ties or presence. FATCA would make US-born Canadians second-class citizens in their own country. This would violate the Charter and Human Rights Act, along with
well-established principles of sovereignty, Canadian bank laws, and Canadian court judgments regarding banking and foreign tax revenue claims.
Canadian banks have no legitimate way of asking where their customers were born: attempts to ask may legally be refused and actions prejudicial to Canadian citizens who were born in certain places will be likely be legally challenged.
Also, a Canadian high court decision (Van deMark vs.TD Bank 1989) established two relevant principles:
– in a conflict of laws, Canadian law has primacy over the law of a foreign jurisdiction where the bank also does business
– Canadian banks may not act as foreign revenue collectors or enforcers
Finally – legal issues aside – in your hearts you know this is wrong.
*Obama’s IRS Snoops Abroad
http://online.wsj.com/article/SB10001424052702303933704577531280097324446.html
FATCA might have a silver lining for Canada, as foreign investors are pouring into Canadian securities. The US is not looking so inviting, and you have to wonder if Canada is not benefiting from this…
Foreigners can’t get enough of Canadian securities
@all. Just curious did everyone get an email notice of this Post when it went up. I have not been receiving them, so just checking to see if this is isolated to me in the lower 48, or some other issue. Thnx
@Just Me: I’ve changed the subscription program from Navayan Subscribe to Ajax Subscribe. Perhaps that will do the trick.
*@Just Me, I did get the email..
@Joe Smith et al:
William McGurn is spot on again. His WSJ article is short but on the money! Thanks for posting it.
http://online.wsj.com/article/SB10001424052702303933704577531280097324446.html
Got the e-mail too.
Another great article with great input from Petros and Just me!
Business Insider: “Expat Experiences”
http://www.businessinsider.com/expat-experiences-2012-7
Cheers mates!
@just me, that link didn’t open for me.
From About.com: “Congress Considers New Penalties For Giving Up U.S. Citizenship”
http://immigration.about.com/b/2012/07/16/congress-considers-new-penalties-for-those-who-give-up-citizenship.htm
The Canadian government has already made a precedent-setting statement
regarding extra-jurisdictional tax claims by foreign states upon Canadians.
In November 2011, the National Post revealed the Eritrean consulate in
Toronto has been collecting a 2% “diaspora tax” from Eritrean-Canadians. In an interview, Jason Kenney, the Minister of Citizenship &
Immigration, said he was concerned about the issue:
“What I’m saying is that, generally, if there is any foreign
government using intimidation to extract payments from Canadian citizens, that
would be very disturbing to us.”
“I would just encourage any Canadians to realize they have
no obligation to a foreign government…. and they have no reason to be afraid of
the activities of a foreign government in Canada.”
– The Honourable Jason Kenney, Canada’s Minister of
Citizenship and Immigration
@Wondering,
Those here in Canada who are advertising and they in the US should also know in their hearts that it will be wrong if these workers are not advised of their income tax and reporting responsibilities if they are getting special visas to work in Alberta. They will have, unless they are given some kind of special privilege, the same US tax and FBAR difficulties we have. It is immoral not to let them know before they step into a trap set by their own country.
http://www.calgaryherald.com/Alberta+rule+changes+opening+door+skilled+foreign+workers/6943243/story.html
@Maura;
Some pressing outstanding questions and concerns I’d like to proffer for the CBA:
– What happens to the account holders and beneficiaries in this scenario : “In a worse case, organizations with poor client data face the risk of
misclassifying clients and inadvertently withholding on them.” http://www.banktech.com/regulation-compliance/231003030
Presumably, as the financial institutions and the IRS have dedicated legal departments, the onus will be entirely on the ‘client’ to sort out the withholding, prove the error, and apply somehow to the IRS to get the money back. Will they be compensated for lost interest, or any other losses? Would the institution pay damages? What plans do CBA members and affiliates have for the inevitable errors that must result from an endeavour of this size and complexity? The Canadian client will be dealing with a foreign (US) revenue agency – but if the withholding was in error – as non-US persons, they would have no legal obligation whatsoever to satisfy the IRS.
Will we now have single-citizenship-Canadian citizens, faced with stressful, costly and time-consuming interactions with the IRS – seeking redress for their Canadian earned assets, seized in error and remitted to the US?
– I also note, further to my original post above, that the CBA site uses wording that chooses to emphasize that those affected are US citizens, born in the US. It does not address those born in Canada, to one or more US citizen parents. ex. “A citizen of the U.S. (including an individual born in the U.S. but
resident in Canada or another country, who has not renounced U.S.
citizenship)”.
Nowhere in the categories does it address dual citizens – by Canadian birth, on whom US status is imposed by inheritance through US parentage – but defined and imposed only in US law, not Canadian law. There are also the duals who are Canadians by naturalization. Both groups are first and foremost Canadians – shouldn’t Canadian citizenship status always take precedence on Canadian soil? Otherwise, you are elevating a foreign defined and imposed status within the sovereign nation of Canada.
– The US also has a long history of conflicting citizenship and loss of nationality laws. They contain many contradictions, and some may have been retroactive – there are sure to be more to come in future. Even inheriting US citizenship through a parent/s is dependent on several factors.
How will the CBA establish that its classification meets the strictest and most robust legal criteria – when even US immigration and US tax scholars argue about when and how US citizenship is lost, and the interplay with US taxable status – which are two different things. Witness the current confusion over the renunciation/relinquishment process between the US State department and the IRS. I doubt that Canadian tax advisors or Canadian banks are the last word in complex US citizenship or tax law. What standard will those who have renounced have to meet when their US status changes? To what lengths will Canadian citizen clients have to go to satisfy banks and the IRS under FATCA? How do you prove a negative – that you do not possess a status?
Congress has been very fickle over decades of changes to extraterritorial taxation laws. Many are complex and contradictory – some also retroactive. They are entirely likely to demand further changes, and even FATCA itself is so complex that they expect it to continue to be a work in progress. What does this mean to clients? What paperwork will ever be enough?
– And what will banks do to safeguard all this personal information and documentation? If it crosses the border into the US, it will be subject to the Patriot Act and Homeland Security – where it can be shared and used any way the US sees fit – with no notice to the original owner, and no recourse, justification or explanation required. (see Canadian Privacy Commissioner case review – of CIBC and Visa account processing by third party service provider located in the US).
http://www.priv.gc.ca/cf-dc/2005/313_20051019_e.asp Again, a reminder that many of those affected will also hold Canadian citizenship as duals, with Canadian-only spouses, joint account holders, business partners, and beneficiaries – and those in the latter categories have absolutely zero legal obligation to the IRS and US, but they do have the right to have their personal and business information protected under Canadian law, and kept on Canadian soil.
@ badger
Those are some excellent responses you gave to Ms. Drew-Lytle. The CBA needs to have a big rethink about ALL the consequences of FATCA because obviously they are missing some vital bits of information at this point.
CBA, please go back to the drawing board in the board room and create a better flow chart and this time factor in your deposits which will go into Canadian credit unions and, if necessary, under Canadian mattresses if FATCA compliance becomes your new mantra.
@Badgerm
Exceptional post.
*I cannot decide if the position of the CBA concerning FATCAT is best described as prostrate or supine.
Where is the counterthreat to pull investment out of the US?
Where is the counterthreat to establish a non-FATCAT compliant “America excepted” banking system that attacks the assumption of USD financial primacy and/or indispensiblity?
Confronted by a rapist they meekly insist only that their assailant use a condom.
What a buncha wimps!
@Tudundsteur
Fantastic, well put and very quotable – never seen anybody with such an efficient use of language (makes me wonder if you are really are a lawyer). When you retire from the practice of law, (giving you the benefit of the doubt), you must become a novelist or perhaps write a play.
Might I suggest the following title:
“To OVDI or NOT To OVDI – that is the question …”
@Badger, awesome comments. Also, we would have to consider Canadians born in US hospitals as victims of this bank account Jihad.
But there is a simple solution for everyone. We divest 250 billion Canadian dollars from the US market and we tell the US to get a life. This is what the CBA should be saying to all its clients: Prepare for your bank to stop making US investments available to their clients because of FATCA. The Chinese, Malaysians, Thai, and Koreans have recently all invested several billions of dollars in Canadian resources. That sector is currently oversold. That is not a bad place for Canadians to put their money if they want to invest in something. But then, outside of the United States–there is an entire world of investments. We don’t need the United States. My one US investment, in commercial real estate, and my losses stand at 70K. I can’t even claim my loss on my Canadian taxes–according to my accountants. At least if I’d lost the money here in Canada, I’d have fewer problems, not only with the IRS but also with the CRA.
@Todunsteur: I also used the rapist analogy in an earlier e-mail to Maura. She told me banks would not release information to IRS without consent of the account holder. However, she was not able to say that the account would not be closed if the customer did not give consent.
I replied that was like a rapist holding a knife to a woman’s throat and then claiming it was “consensual sex.”
@Maura: I hope you will reply to the many points and questions posted. We truly do feel we are about to be violated by banks–where many of us have been responsible and loyal customers for decades. Unfortunately, your reply that there is nothing to prevent banks from closing accounts does not instill confidence that Canadian banks actually care about the very real concerns of their Canadian customers. Instead, it indicates banks will betray the relationship with long-time customers for a more lucrative one with a foreign government.
It occurs to me that FATCA also applies to all of those who have been dutifully filing 1040s and FBARs over the years. So while the “handful” of those who have relinquished or renounced “may” be off the hook, the implications of this intrusion into the lives of Canadian residents will be rather remarkable.
*@Blaze
You might wish to read up on Van deMark vs Toronto Dominion Bank and United States vs Harden again.
http://uniset.ca/other/cs6/68OR2d379.html
http://uniset.ca/other/cs5/1963SCR366.html
I found the argument by TD Bank’s lawyers bank in 1989 to be rather familiar that Kenneth Van deMark was “unjustly enriching” on to the detriment of other TD Bank customers by refusing to a pay tax debt to the IRS. Unfortionately for TD Bank the Ontario Courts didn’t see it that way.
@Tim, great find. According to that court case, the US can’t hold the bank’s assets in the United States hostage in order to collect a tax debt. My lawyer warned me that they would try this. He may have had this court case in mind. Obviously, the CBA has not yet learned its lesson. It will lose if it tries a shenanigan like this again. Clearly, the rights of certain account holders is greater than than need of the banks to do business in the United States.