However, before making this decision, you should be aware that individuals rescinding their US citizenship after June 2008 may be subject to considerable US income tax upon
expatriation. In addition, gift tax may be imposed on the recipient of a gift from an expatriate. Unless you qualify for a specific exception to the rules, the “exit tax” provisions are imposed on expatriating individuals who meet any one of the following criteria:
1. Have a net worth over $2 million on the date of expatriation, or
2. Average US income tax liability for the 5 years preceding the date of expatriation exceeds a certain amount that is indexed to inflation (US$155,000 for 2013), or
3. Have not complied with all US federal tax obligations for the 5 years preceding the expatriation date.
BMO Nesbitt Burns: US Citizens Living in Canada, Income Tax Considerations
It appears that Nesbitt-Burns has advanced quite a bit on the learning curve since they tried to sell me RDSP’s, RESP’s and TFSA’s at the FATCA Info Seminar BMO invited me to earlier this summer (which I castigated them for).
One advisor at my bank when I called there last week said “FATCA? What is that, never heard of it.” I was a bit taken aback as this is Scotiabank. I couldn’t believe she’d never heard of it. We had quite the conversation. I had called to tell them I had relinquished and will have my CLN soon. That’s how the conversation got started. I know I’m in a smaller city but, shouldn’t they ALL know something about this by now? If she doesn’t and she’s one of the advisors there then what is going on?
I relinquished and I’m not even a minnow, I’m a krill. I still think it was the best way to go for me.
Just want to say how wonderfully apt the embedded video clip, “how not to be seen”, is.
US keeps losing influential citizens !
The Mayor of Zurich earlier in the year renounced her citizen.
“My relationship with the U.S. is limited to my very early youth,” said Mauch, who retains Swiss citizenship. “Neither the double taxation or any new directives on the taxation of U.S. citizens outside the U.S. have affected this decision. But I won’t miss the U.S. tax bureaucracy either”
If anyone wans to read the article please click on –
If the US doesn’t lighten up all its influential citizens will have jumped ship with only the Yanks to blame themselves for its isolation.
If the Mayor of Zurich has a choice of buying services / products off an American owned company or a European one could her experience sway her decision making?
It’s one city in a small country but it all adds up in the end.
And this “small country” punches way above its weight, might I say. Switzerland is the 5th largest cumulative foreign direct investor for the US economy (about the same size as Canada if you do a cumulative value comparison)!
Did you have the feeling that she was imagining you in a tin foil hat while you were explaining FATCA to her?
@bubblebustin, YES I did! She kept saying “They can’t do that” and “We can’t do that” and “The would be illegal” I hated to be the bringer of bad news. I even had to tell her “you guys have a notice up about this on your website” It completely sailed over her head. I’m just wondering what smaller branches are going to be able to do if they have employees that aren’t even aware of it at this date? ONE long term employee did know but, this one did not at ALL.
Atticus, not surprised. Same bank, shortly before TFSAs began, but after they’d been announced. Tried to ask bank employee about TFSAs, hadn’t even heard of them. That’s kept me from offering up my CLN at this point. I will wait until (if) FATCA IGA is signed.
Atticus, No one at my bank even knew that I had to file taxes in the US (I had to chase down the check I’d sent with my 2011 return to make sure it was cashed in addition to ask the IRS for verification – not leaving this to chance. Although for this last year, I basically scaled back on work to the point where I owe the US nothing. Screw them.) They were confused and didn’t believe me at first and then they just remarked on how very oddly American that it was. But they have never once mentioned FATCA and I doubt they have any idea what’s coming. It’s a provincial bank. Officially, I don’t even think they are even classified as a bank and don’t operate outside the province at all. But you would think they would at least be clued in at this point because there are a lot of Americans in Alberta due to the oil industry.
My husband has a lot of American or dual coworkers, who know about the tax filing but little else. Certainly not about the no-no investments or the accounts reporting. They also don’t seem too concerned when he tells them about it. Although one guy has a dual son, who was born in the States when he was assigned down there, and he is aware of the paperwork nightmare so is careful about savings and things for the poor kid.
Ignorance is truly bliss, I guess.
I was just at my branch of Scotiabank getting a draft for the balance of tax owed on my Dad’s IRA’s. I asked the same thing and got the same answer. She was absolutely shocked when I told her what was coming and how it would impact all customers, etc.
I think the deal is only the bigger brass know and they will wait until the IGA is (if) finalized so they don’t create any unnecessary confusion. ???
The woman I spoke with almost got angry with me the more I explained to her. “No, I told you no, that would be illegal here and we’d never do that to our customers!” and “Can you imagine what a mess that would be!” Well, okay don’t take my word for it. U.S. IS going to try and make you break Canadian law to do this, yes it’s going to cost millions and yes, you will have to if IGA is passed.
I think they are going to try the get CRA to do it to get our banks out of being sued. They cannot ask Canadians to waive rights in order to bank. At any rate, IGA or not, I couldn’t spend all my time keeping up with will they or won’t they. If not this POTUS then the next? What are the rules out of 72,000 pages that apply to me? What is the cost to my family on zero tax ever owed? How does this affect my child? My spouse? On and on and on.
Enough already. Bottom line. U.S. hates expats and doesn’t give a flying crap what happens to us innocent or not.
Sadly, this is very true. I’ve read in way too many papers now about how excited and eager America is to replace its patriots with all of these unknown and unpredictable immigrants.
“U.S. hates expats and doesn’t give a flying crap what happens to us innocent or not.”
too true. and the sad thing is we could have been the Homeland’s best ambassadors.
“U.S. hates expats and doesn’t give a flying crap what happens to us innocent or not.”
Indeed. Here’s a question for you guys: my brokerage knows I am a US citizen (because I must have stupidly used my Canadian passport with my American birthplace as ID at some point). The brokerage froze my account until I filled out a W-9.
The brokerage and the retail bank branches are separate lines of business. When I opened my brokerage account, I had to submit two pieces of ID, even though I am a client at the retail bank.
When I close my brokerage account later this year, will the brokerage share the fact that I am a US citizen with the bank branch? Have to investigate this.
This is a Canadian financial institution by the way; one of the big six banks, but I won’t mention which one.
The thing that is most unfair about my situation is that my family is Canadian; they were living in the US on work visas at the time of my birth, thus automatically granting me this cursed citizenship. My family relocated to Canada eight years after my birth. If I had a biological child, that child could not claim American citizenship through my bloodline, as I did not live in the country long enough.
Despite that, and despite the fact I have no intention of living, working, voting in elections, or drawing upon Social Security and Medicare, the US says they have a claim on my income forever (at least until I can renounce).
24 hours to go until the US Federal Government runs out of funding and shuts down! Tick-tock, tick-tock.
*despite the fact I have no intention of living there or working there
@”I think the deal is only the bigger brass know and they will wait until the IGA is (if) finalized so they don’t create any unnecessary confusion. ???”
I live in a country that already has signed an IGA. The major banks all have special information directed at “US persons” in very small script on their websites, but my experience is that none of the “ordinary” bank personnel know about it. The only knowledgeable people I spoke to were employed by one of the big international accounting firms. I thank my lucky stars that I was not born in the US and have never been asked whether I was a “US person” – in fact I had no idea that term existed before a few months ago.
Crystal London said: ““U.S. hates expats and doesn’t give a flying crap what happens to us innocent or not.”
too true. and the sad thing is we could have been the Homeland’s best ambassadors.”
The saddest thing is that many of us WERE just that. For decades! I did tons of volunteer work always being sure to note to others that many Americans are giving and do good works in a way that wasn’t too blatant but, felt I needed to do that. I’ve had to diplomatically deal with my son’s teachers one of whom made it plain she hated Americans and ended up friends with her in the long term. SO many situations I can’t count them all. Well, I’m done with all of that. I am certain I’m not the only one who feels back stabbed for having bent over backwards to put a good face on the “American Abroad” Done, done and done. Many times I’ve had people say to me “OH! You’re American!” without fail nearly everyone got that “look” briefly upon their face that I didn’t miss which said “that’s too bad, I never took you for one of those people.” When this happened I took it for an opportunity to show a better light on who Americans are. Which usually later on resulted in something like “You’re not like those other Americans” being said to me. I don’t think U.S. understands the issues expats face OR how very little the U.S. is liked by other countries at all. So let them ditch us, let them call us all criminals and if we complain let them say it’s evidence that we are criminals. Using big sticks to beat up on people who are innocent rarely results in a productive outcome. Using big sticks to punish people for good deeds results in a back lash.
All I’d like is for them to acknowledge they are driving us away on purpose and make the path out a lot easier. If we’re to be forced out then the very least they could do is make leaving less punitive. But I highly doubt this will ever happen because for that to occur they’d have to admit they might have been wrong about something. They will never do that.
If the brokerage & the bank are separate they shouldn’t be able to share the information back & forth.
At least that’s how it is for the Credit Union I belong to. I believe that even if you hadn’t supplied ID that had your place of birth, they would had to have asked about American citizenship because they would have had those forms in place before all this FATCA business. BUT I’m sure many places were lax about asking. I was never asked when I first did investing maybe about 8 years ago & my professional accountants also never asked. Of course if it showed up only on a form with a tick box for Canadian & tick box for American, the chances are strong I would have only ticked off Canadian simply because I didn’t understand the relevance at all and would have assumed that meant American as opposed to being Canadian. I have only ever considered myself Canadian
employees in particular lower level employees that actually deal with the public are unlikely to receive much or any information until a bank is ready to implement changes. At that time employees would receive instructions on new procedures.
you said “The thing that is most unfair about my situation is that my family is Canadian; they were living in the US on work visas at the time of my birth, thus automatically granting me this cursed citizenship. My family relocated to Canada eight years after my birth. If I had a biological child, that child could not claim American citizenship through my bloodline, as I did not live in the country long enough.”
yep, me too. I did decide to file so I could have a final solution to forever be done with the cursed country. Until I can renounce, I will continue to feel like some sort of refugee. Am I resentful of the time, money & life units I used up on the overreach of a foreign government? You better believe it.
I’m lucky NOT to be US borne or an otherwise “US person”. But my girl friend, i.e. my life parner, happens to be one and so are some of my close friends. That’s why I’m following this discussion..
But frankly, there are some things I don’t understand here. You are complaining, you are crying out loudly, you are ranting, you are furious, deceived, frustrated, desperate, all this is fully understandably, rightly, justified. What the US do to you expats is a scandal, it’s unfair, undecent, utterly disgusting and more!
But beside all this: why don’t you take action? Why don’t you fight? What can we do? Quite a lot, I believe.
First of all, individually: you might just ignore the american claims. I believe many of you are living out of the US for very long, even for decades, and you might not have much ties any more, like assets or family there, so if you just refuse to play and to join in this dirty game, what would, what could the US do to you and especially if you do this en masse? Sue you all legally? Coming to arrest you all by Interpol? Ridiculous!
But there is more you could do. E.g. why shouldn’t you file – by means of one of your plenty gifted lawyers – a class action to the US Supreme Court demanding it to declare the tax obligation law of non resident US-persons as unconstitutional. After all there exists the maxime “no taxation without representation”. Even if this is not explicitely written, the court might eventually back this claim as unwritten constitutional right. Even if this would not lead to an immediate abolition of the tax law, it would certainly stir up public discussion, the issue would have been taken up by the congress and may be you non residents would be given the right to elect some congressmen of yours, even some senators (one for Canda, one for the UK, one for Europe, one for Asia etc.). Together these might have some impact, even if only the strength of the state of Maine.
Finally your concerted actions might even bring the banks to reconsidering their stand and eventually take their joined action as well. From the very beginning I didn’t understand why they are all giving in. True, the US can harm very much a single noncomplying bank. But I believe, if only the 15 largest non-US banks had joined together in order with the firm decision to resist this US assault, what could they have done? Stop 80% of their financial transactions and business with the outside world? FATCA would have died before birth.
@alex, my short answer as to why not to launch a lawsuit in the United States:
(1) Individually, the readers of this site are mostly incapable of filing such a suit, where the starting costs would be at least one million and most likely several million before it comes to culmination.
(2) The paternalistic leadership style of the United States is no different in the style of the US Supreme court, and given previous precedent with regard to extra-territorial taxation, a Supreme Court decision will most likely go against us.
As for the concerted efforts regarding the banks, the Canadian banks may be a sample of the problem: Whereas easily 1 out of every 30 clients may be affected by FATCA, a much higher percentage of Canadians have investments in the United States because of the integrated system of finance and the previous 20 years or so of the banks actively promoting diversification of one’s portfolio through, e.g., balanced mutual funds that invest in US equities and other financial products. This a multi-billion dollar problem. Furthermore, most of the larger banks in Canada have also heavily invested in banking assets in the United States and they are now between a rock and a hard place: if they do not violate the rights of their clients, the United States will place sanctions on them and perhaps even begin to seize their US based assets. The banks are going to comply with FATCA one way or another, because they fear the Canadian-based “US persons” less than they do having their assets in the US destroyed through the regulations.
Finally, I have been advocating relinquishment of citizenship or ignoring the filing requirements (depending on one’s personal circumstances), esp. in consideration of the individual protections that one’s country of residence will offer. Personally, that is why I filed all my IRS requirements but have refused to ever file an FBAR. Canada will never collect FBAR fines from anyone and all my assets are safely outside of the United States.
Great comments and observations; thanks for your interest and spread the word!
On this blog, you see the tip of an iceberg; a small group of informed activists. The majority of Canadians who may be considered “US-persons” have likely been ignoring these foreign revenue claims for a long time and will probably continue to do so. US statistics regarding numbers of tax returns filed from abroad indicate a very low compliance rate.
The government of Canada will not assist in collecting a US tax claim from a Canadian citizen (unless the claim arose before they became Canadian). And its very unlikely that a Canadian court would enforce a foreign revenue claim as well, especially if the individual in question was a Canadian citizen protected by the Tax Treaty.
Since it is difficult for the US to enforce these unusual revenue claims against residents in foreign lands, it is attempting to force local banks and financial institutions to be its revenue enforcement agents. A cunning strategy, but also very complex and infeasible. In many countries this is unlawful, so the US is pressure national governments into passing local laws supporting its position. Various conflicts of laws make this difficult, and it only because it has been an opaque and stealthy process that a handful of countries have signed Intergovernmental Agreements (which is reality is only the first step in countries where these must be ratified by some kind of democratic process). These agreements may well be face serious pushback locally when implemented and within the US as well. However, for for now US government is shutdown and Congress is in deadlock; I don’t think FATCA is any kind of priority for the US people at this juncture.
This issue is about asserting a remote claim of citizenship and an unusual non-resident tax obligation upon individuals who are primarily long term residents and citizens of other countries and have no actual economic activity or tie with US. For these individuals, US courts are essentially foreign courts in a foreign country. So many are choosing to use their own political process and courts. Stay tuned.
Thank you for your suggestions. It’s not fair to assume that our efforts have been limited to Isaac Brock Society. Many of us are active on various other levels, i.e. face-to-face meetings with legislators, letter writing campaigns to both representatives in the US and the countries where we live, press interviews, protest campaigns, blogging, etc, etc. You get the picture – ANY WAY WE CAN. Crying and ranting here at Brock is only a part of most of our repertoires.
Frankly, I’ve spend enough of my hard earned money on trying to set things right with this country and am not interested in throwing good money after bad at this point. I’d rather spend my money on my family, at least they appreciate it and don’t use it to wage war against me.
America doesn’t deserve me as its citizen any more.
@Alex. I know of 2 people interested in my country about this issue, including myself. It’s pretty tough to get much going.
But if something should get going, I will be in it.