Q Canada opposes the planned U.S. Foreign Account Tax Compliance Act (FATCA) aimed at American tax evaders in this country. Explain your concerns?
A FATCA is the poster child for the problem of extra-territoriality. One can understand the rationale. They want to cut down on tax evasion. Fine. We understand that and are sympathetic to that. It’s the way they have chosen to go about doing it which is a real problem. It’s hugely unworkable. It extends U.S. territoriality into Canada. It threatens to erode Canadian sovereignty. Ultimately … FATCA would have turned individual banks, individual financial institutions, into arms of the IRS [Internal Revenue Service] in the United States. If FATCA came through in its current form, before a Canadian citizen could open up a bank account at a Canadian bank, you would have to prove you were not an American citizen.
*@usxcanada, yes, permanent entry is indeed possible as described in my earlier post. It is my impression that becoming a US citizen after having renounced appears to me to not be possible. That certainly is the message that is hammered into the head of the person who presents himself before a US consular officer for the purpose of renouncing US citizenship. It is a one-way street and there is no way back. You, in effect, become a traitor by renouncing.
But if anyone has any first-hand knowlege of anyone who has been able to become a naturalized US citizens after having raised his right hand sworn his oath of renunciation, by all means let’s hear about it.
@Roger and @uxs: ‘Voluntarily renouncing your US citizenship should not be taken lightly. Once you renounce your citizenship, it is nearly impossible to get it back.’
This from: http://www.newcitizen.us/losing.html
@Roger Conklin, all laws can be changed. A renunciation may be irrevocable today, but the US government could change such once it finds the courage to admit that it was wrong. Unfortunately, I’m confident that we are all in agreement that we’ll all die from old age before the US government admits its mistakes and changes faulty practices.
The minute that I can’t refinance my mortgage as a result of US policy, I’ll renounce for the safety of my family, and the US government will be responsible for such.
Ooh. Not to be taken lightly. OK. I’ll take renunciation darkly!
That’s me, always doing what I’m told.
PS Just today I read a tantalizing review of a brand-new book: Why Does the World Exist? Reading this one could be a lot more fun than trying not to think about predatory US citizenship.
*@Bubblebustin, thanks for the link. The information in that link seems to officially indicated that once you have lost your US citizenship there is no way you can ever beocme a US citizen again. It goes to to indicate that it is extremely difficult to even obtain permission, that is to get a green card, that would allow you to ever reside in the US again. The assumption is that if you have given up your citizenship then why should be given a way to “sneak back” into the country which you deliberately turned your back on by renouncing?
That makes me suspect that my American friend who renounced his US citizenship back in 1977 may only have been able to obtain a green card to later accept employment in and move to the US was because his wife did not follow in his footsteps by renouncing her US citizenship, and she was somehow able to claim him as a close relative and he used this in obtaining a green card.
It is definitely not like getting a divorce and then remarrying your former spouse as more than a few have done.
*The way FATCA is written and presently in force not only does a person have to prove he is not a US citizen in order to open a bank account, the same is true everywhere in the world. Even in China, Sri Lanka, Libya, Iran, Singapore, Russia, the Falkland Islands (known as Las Malvinas in Argentina) or Madagascar, any one applying to open a bank account has to prove he is not a US citizen.
You are presumed guilty unless and until you can prove yourself innocent. That is just the opposite of how the legal system of the US under the constitution is supposed to work by guaranteeing your innocense until you have been determined to be guilty by a court of law.
But if anyone has any first-hand knowlege of anyone who has been able to
become a naturalized US citizens after having raised his right hand
sworn his oath of renunciation, by all means let’s hear about it.
I would too, but I don’t think you’ll find it. People usually have *multiple* reasons for deep-sixing their US Citizenship. Why on earth would they want it back!! Maybe only if they like pain, punishment, and a more complicated life.
However, I have seen references to a couple of forum posts where people have renounced and applied for and received green cards. The consular officers here told me multiple times that you are treated as a citizen of the country where you live/apply for the paperwork.
I saw the other day that Brazilians can go to Canada visa (hassle) free. I don’t want to have to pay to go to the Consulate in Rio (not once, but TWICE!) with small kids just to travel to the US. That’s a huge expense. The Americans have to get off of their high horse to realise that not everyone wants to go to the US and compete with the illegals for work.
@Geeez, all you have to do is go into a consulate and apply for a passport. Then if they find out that you’ve renounced, make a sob story about how you didn’t know what you were doing and someone made you do it, and they will give you back a passport.
*Petros, that would make sense. With citizenship-based taxation, I’m surprised that the US hasn’t already declared the world as being taxable “US Persons”.
As for ex-US citizens having their citizenship restored, there is a case of an American woman who renounced her citizenship claiming political reasons and went to Mexico. 10-20 years later she wanted the US citizenship back claiming hardship and that she had been forced to renounce in order to get a job in Mexico. After a long court struggle, the US gave it back to her. I have read about this several times, but unfortunately, my searches did bring up any information about this. The case was complicated. Maybe a better searcher can find the case.
For contrast, here is a current case from the Mexican border where an American woman was forced to renounce her citizenship. The border guards seem to have had a lot of control in her case. There was no waiting months for an appointment to renounce. So a fast track way for those who want to renounce has been identified, although it appears to depend on skin color and ethnic heritage as much as with an error on a birth certificate. I doubt anyone reading this site wants to be in this situation. I think the article highlights the different situations between the two borders.
*Lisa, so if I am forced to renounce to save my mortgage and protect my family, assuming the worst-case scenario, how could this process be best documented for legal purposes?
As it is unlikely that a CLN would not prove that a person is no longer a US citizen, it doesn’t prove that person didn’t overstay a visit to the US, making them a US person for tax purposes again. A CLN is not proof that you are no longer a US person for tax purposes.
The requirement to prove your are not a US person is a requirement to prove a negative, difficult if not impossible to do.
I have not previously seen this, but there is a lot of good information regarding FATCA — and, among many other subjects, RDSPs, RESPs and TFSAs, which I was doing a search on this afternoon. At any rate, it is worth another review by anyone interested. (I will cross-post on the Maple Sandbox.)
This is a link to April 30, 2012 Canadian Bankers Association, Canadian Life and Health Insurance Association, Investment Funds Institute of Canada and Investment Industry Association of Canada submission to the IRS, Re: REG-121647-10: “Regulations Relating to Information Reporting by Foreign Financial Institutions and Withholding on Certain Payments to Foreign Financial Institutions and Other Entities”
More good discussion going on at Maple Sandbox, CBA and Canadian bankers — on both sides of the Canadian / US border.
After checking out Terry Campbell’s original statements, consider that when reading this series of comments:
Recent comments by Terry Campbell of the CBA:
“Mr. Campbell of the Canadian Bankers Association said the extended timeline to implement the most difficult parts of FATCA is “helpful.” However, he said it remains difficult to determine the impact on Canadian banks and their customers because Canada has not yet reached an inter-governmental agreement with the U.S. tax and treasury authorities.
“Our aim throughout… has been to lessen the impact on Canadian banks and their customers as much as possible,” Mr. Campbell said….”
Do any of us really believe that the CBA cares about the impact on their customers? What BS.
The CBA has had more than ample time and opportunity to take out full page ads in the Globe, Star, etc. here in Canada alerting US person accountholders to FATCA and urging them to contact their MP. The CBA could have made their concerns known to the Canadian public. But it CHOSE not to.
Instead, the CBA creeps about, lobbying covertly behind the scenes for the deal that is the best for the banks, NOT their account holders, or the Canadian taxpaying public who’ll ALL be paying for the implementation and associated costs of any FATCA IGA. We’ll ALL pay so that the CBA can make money unhindered by any twinges of conscience as to their role in keeping all this as mum as possible.
The CBA and its related investment affiliate buddies do not deserve access to our assets and our accounts. Move your money to a credit union if you haven’t already. Even if credit unions are to be forced to cooperate under a FATCA IGA, at least they haven’t been slyly and proactively throwing us under the bus while keeping abreast of things during their secret talks and updates by the Harper government.