UPDATE #3, February 12, 2014, CORRESPONDENCE TO CARP / ZOOMER:
From: caroltapanila
Sent: Wednesday, February 12, 2014 3:01 PM
To: Michael Nicin
Subject: Re: Your announcement of your “advocacy” for FATCA (which is combined with US citizenship-based taxation)Mr. Nicin,
If CARP / Zoomer is true to its word that they will follow the FATCA issue, you might want to keep up to date on how FATCA, combined with US citizenship-taxation law, can affect unaware Canadian snowbirds and their time spent away from the US when they spend winter months in the US, how they handle their US property when are in Canada, etc. Some of them have commented in news stories that they’ve been told the US will change their laws to accommodate them and the time they can stay in the US for no tax consequences. They shouldn’t be so sure. Canadian snowbirds, if they are not careful and now that their comings and goings will be recorded at the border, may want to take a page from the FATCA IGA give-away that Canada just negotiated with the US. It only proves their trust should not be given so easily to the governments of either country. It is oh so easy for Canadian snowbirds to be another group that the US will define ‘US Persons in Canada’. They can protect themselves and their interests if they do their homework to be in the know and are not careless. It is your job to advise them. I wrote to Zoomer on this subject when there was a misleading article in their “advertising” for snowbirds. Again, I never got a response.
Consider:
http://www.moodysgartner.com/beware-of-the-us-snowbird-visa-tax-bomb/
I understand that Zoomer’s Moses Znaimer was born in Kulab, Tajikistan, to Polish and Latvian Jewish survivors of the Holocaust (http://zoomermedia.ca/media/speakers-bureau/speakers-roster/moses-znaimer). He may relate to what ‘US Persons in Canada’ feel about FATCA combined with US citizenship-based taxation. Would he want his private financial information to go to the tax authorities of Poland and Latvia? That might be an interesting question you could feature in your upcoming CARP / Zoomer coverage of FATCA.
Regards,
Carol Tapanila
Calgary, AB, Canada
UPDATE #2, February 12, 2014, CORRESPONDENCE FROM CARP:
In other words, Mr. Nicin does not understand and cannot enumerate for me and others affected the important protections for dual citizens. I still don’t understand what those are. He referred me to a link that I’ve already read — and do not fully comprehend.
From: Michael Nicin
From: caroltapanila
Sent: Wednesday, February 12, 2014 1:15 PM
To: Michael Nicin
Subject: Re: Your announcement of your “advocacy” for FATCA (which is combined with US citizenship-based taxation)Mr. Nicin,
Thank you for your follow-up with me. As you should know, we affected have read the link you refer me to. I, for one, still don’t understand from that information “the important protections for dual citizens”. Apparently, neither do you.
I’ve posted our conversation at IsaacBrockSociety.ca: http://isaacbrocksociety.ca/2014/02/11/carp-weighs-in-on-fatca/. You may read comments there.
Thank you.
Carol Tapanila
Calgary, AB, CanadaSent: Wednesday, February 12, 2014 11:48 AM
To: caroltapanila
Subject: RE: Your announcement of your “advocacy” for FATCA (which is combined with US citizenship-based taxation)Ms. Tapanila,
The announcement was only made public last week and more information can be found in the following link, including the accounts that will be exempt from FACTA: http://www.fin.gc.ca/n14/data/14-018_1-eng.asp
CARP pushed the Canadian government to fight FACTA as far back as 2011. We’ve had numerous discussions with Minister Flaherty’s office urging the government to resist incursions by the US into the accounts of dual citizens. He wrote a letter to CARP members with his response to our lobbying and the effort the government would ultimately put into the negotiations with the US government. You can read it here: http://www.carp.ca/2012/06/15/minister-flaherty-canada-continues-to-press-for-fair-tax-deal-with-united-states/You’ll note that he conceded in the letter that the US has considerable leeway to act unilaterally on these matters. In fact, before the agreement was made, the US government was threatening Canadian financial institutions with punitive measures for non-compliance. I cannot speak to the negotiations between the respective governments in ultimately reaching this new agreement, but it does appear that the Canadian government has won important concessions from the US.
I understand completely your frustrations and concerns. We’ll continue to follow the issue, but now that the agreement is in place, the best source for information on how FACTA might affect you personally is through a tax professional and/or the CRA: http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/menu-eng.html
Sincerely,
Michael Nicin
Director of Policy416.607.2479 | 1.888.363.2279 x279
30 Jefferson Ave. Toronto ON M6K 1Y4
m.nicin@carp.ca
UPADATE #1, February 12, 2014, CORRESPONDENCE FROM AND TO CARP:
From: caroltapanila
Sent: Wednesday, February 12, 2014 10:31 AM
To: Michael Nicin
Subject: Re: Your announcement of your “advocacy” for FATCA (which is combined with US citizenship-based taxation)Mr. Nicin,
Can you please numerate for me and others affected the important protections for dual citizens? I don’t understand what those are. As I read it and until I pay for further legal advice on how to interpret the IGA that Canada has negotiated behind closed doors with the USA, that “exemption” is just for the banks to not have to report to the US IRS our Canadian registered accounts. So-called “US Persons in Canada” STILL have the US tax compliance requirements to report these accounts with their US tax and reporting returns (i.e. Foreign Bank Account Reports). This includes very complex and costly in time, stress and large fees to US professional tax law and accounting professionals to properly report so as not to be at risk of the draconian US IRS penalties (which yes, the Canadian Finance Minister “promises” will not be collected by Canada). Fool me once, shame on the Canadian government. Fool me twice, shame on me!
I have corresponded extensively with the Finance Minister, my Conservative MP, Michelle Rempel, and other Canadian government representatives. It has been a mostly one-way conversation. I don’t have any US government officials representing me. I officially renounced my US citizenship in 2012, decades after I became a Canadian citizen and was WARNED by the US Consulate that I would be losing my US citizenship when I became a Canadian citizen. I now have a valuable Certificate of Loss of US Nationality (CLN) to show to my local CANADIAN US-defined “foreign financial institution” that I am NOT a US citizen when the “round-up” of US Persons in Canada begins. I’ve lived my life in Canada as only a Canadian. I never registered my children with the US. My Canadian-born son is entrapped into his *supposed* US citizenship conveyed automatically to him by his birth to me as he has a “mental incapacity”. He does not understand the concept of “citizenship” and can have no coaching on such with an interview at a US Consulate. I am also advised that a parent, a guardian or a trustee of such a person does not have the RIGHT to renounce citizenship on such a person’s behalf, even with a court order. The US actually thinks his US citizenship trumps his Canadian-born citizenship. He has never lived in the US, never had any benefit from the US. Others, people CARP is to represent, will be as entrapped with their mental incapacity of age-related dementia.
Please take this issue seriously and don’t pass me on to Finance Minister Flaherty and any US politicians that might share my interest. I would expect real advocacy from an organization like CARP. You are shirking your duty.
Sincerely,
Carol Tapanila
Calgary, AB, CanadaFrom: Michael Nicin
Sent: Wednesday, February 12, 2014 9:54 AM
To: caroltapanila
Subject: RE: Your announcement of your “advocacy” for FATCA (which is combined with US citizenship-based taxation)Dear Ms. Tapanila,
Thank you for your email. I appreciate your position.
CARP does not support the FATCA agreement as such, but we think that the Canadian government negotiated important protections for dual citizens based in part on our previous advocacy, including exemptions for a number of accounts (including retirement accounts such as RRSPs, RRIFs etc) and by allowing the CRA to act as an intermediary between dual citizens and the IRS. As noted in the article your read on CARP.ca, without an agreement in place, obligations to comply with FATCA would have been unilaterally and automatically imposed by the US government on Canadian financial institutions and their clients as of July 1, 2014.
The agreement may not go far enough, but it is our understanding that the US government had no intention of fully exempting US citizens in Canada and other countries from US tax compliance. In fact, the US is one of two countries that requires citizens living abroad to file taxes. As Finance Minister Flaherty notes in his 2012 letter to CARP members, the US has the sovereign right to determine its own tax laws. In light of that, the new agreement offers greater protections to dual citizens. Of course, we fully appreciate that many dual citizens will still face potential FATCA incursions.
I cannot speak to the negotiations between the Canadian and US governments concerning FATCA. But I do encourage you to contact your MP and Finance Minister James Flaherty, as well as any US politicians that may share your interests.
Sincerely,
Michael Nicin
Director of Policy416.607.2479 | 1.888.363.2279 x279
30 Jefferson Ave. Toronto ON M6K 1Y4
m.nicin@carp.ca
This was sent to me from our Patricia Anderson d’Addario, who says:
Thought you might want to send your story to Susan Eng of CARP – seems that they don’t have a clue either about the FATCA and IGA issues, or how CRA will get the names of US persons without an invasion of privacy by the banks collecting the information.
I was interviewed by Zoomer magazine a couple of years ago, but the day before they were supposed to go to print, an editor called to verify my story and it soon became obvious that they thought I was someone else whose story was very benign compared to mine.
I am so fed up – wish I had the energy to make a deposition to Parliament…….
Bit down today…..must take a break from this downright continuing persecution……
What are those “Notable exemptions and relief have been obtained for dual citizens”? I will be corresponding with CARP — another try, Patricia. For you, and for everyone. CARP’s statement at the end seems to give themselves a lot of credit for lobbying with the Government of Canada on our behalf. I really don’t think so!
CARP: Canadian Government Reaches Agreement with US on Foreign Account Tax Compliance Act (FATCA)
Finance Minister Jim Flaherty announced earlier this week that Canada and the United States have signed an intergovernmental agreement under the Canada-U.S. Tax Convention on US access to financial accounts held by dual US-Canada citizens.
The American government enacted the FATCA in 2010 with the intent to require non-U.S. financial institutions to report to the U.S. Internal Revenue Service (IRS) accounts held by U.S. taxpayers for the purposes of taxation.
FATCA has caused unsuspecting and long standing dual citizens to fear potential repercussions of unilateral IRS access to financial accounts. Dual citizens, particularly those who have lived in Canada for decades, may not have realized that the U.S. is one of only two countries in the world that requires their citizens to file taxes no matter where they are living. Failure to comply with FATCA could subject a financial institution or its account holders to certain sanctions including special U.S. withholding taxes on payments to them from the U.S.
One key concern was that the reporting obligations in respect of accounts in Canada would compel Canadian financial institutions to report information on account holders who are U.S. residents and U.S. citizens (including U.S. citizens who are residents or citizens of Canada) directly to the IRS, thereby potentially violating Canadian privacy laws.
Without an agreement in place, obligations to comply with FATCA would have been unilaterally and automatically imposed on Canadian financial institutions and their clients as of July 1, 2014. It is estimated one million U.S. citizens live in Canada. The rules affect each of them, their children and anyone with whom they may hold a joint account or co-own a business or property.
The new agreement provides Canadian financial institutions and many dual citizens certain protections:
Financial institutions in Canada will not report any information directly to the IRS.
*****
Relevant information on accounts held by U.S. residents and U.S. citizens (including U.S. citizens who are residents or citizens of Canada) will be reported to the Canada Revenue Agency (CRA). The CRA will then exchange the information with the IRS through the existing provisions and safeguards of the Canada-U.S. Tax Convention, consistent with Canada’s privacy laws.
*****
Notable exemptions and relief have been obtained for dual citizens.
*****Certain accounts are exempt from FATCA and will not be reportable: Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), Registered Disability Savings Plans (RDSPs), Tax-Free Savings Accounts (TFSAs), and others.
*****
In addition, smaller deposit-taking institutions, such as credit unions, with assets of less than $175 million will be exempt.
*****
The 30 percent FATCA withholding tax will not apply to clients of Canadian financial institutions, and can apply to a Canadian financial institution only if the financial institution is in significant and long-term non-compliance with its obligations under the agreement.Although the IRS will still have access to Canadian Financial institutions and non-exempt accounts,the agreement allows Canadian banks to provide the information to the Canada Revenue Agency instead of the IRS directly, thereby allowing Canadians who feel wrongly targeted to appeal.
Starting in 2011, CARP urged the federal government to work with the US government to prevent unsuspecting dual citizens of unilateral targeting by the IRS. By protecting many common registered accounts from IRS incursion and allowing the CRA to act as a buffer, the new agreement signals that the US government is primarily focussed on finding actual tax evaders, rather than on innocent, unsuspecting dual citizens.
Read Minster Flaherty’s (June 2012 letter) to CARP members
Learn more about the new FATCA agreement
*****
– See more at:http://www.carp.ca/2014/02/07/crucial-dispaches-parliament-hill-key-legislative-political-updates/#sthash.AjJiHLWA.dpuf
…that’s if there still is a Canada.
@maz57
Oh crap.. I forgot about that. I think they only thing not taxed right now is air.. cause they haven’t figured out how to charge for it… sigh
Another response from CARP below. As I read it,
____________________________________
We went to a meeting arranged by our MP last night. He was missing, in Ottawa, advocating for us?????? Standing room only. Organizers did not expect such a crowd! 2 cross-border accountants, one FP, one US cross-border immigration lawyer. They all had their bank deposit bags with them, just sign up here, ladies and gentlemen….All said, ‘it’s the law’, you must file. Oh yah, BTW, the fee for Renounciation at Vancouver Consulate has shot up to $600–is this correct- that’s what they said?
One little bit of good news, although would not help many, but some: If mother was a Cnd citizen, gave birth in Canada, and was unmarried at the time, child born may not be entitled to US citizenship even if later the mother legally married the US born dad.
@calgary411
OMG- the automated CARP response is? is? is? can’t find the words- my mouth is full of vomit!!!!
@ Always Something,
Very doubtful. At least from a quick scan of Dept State website and Code of Federal Regulations, there does not appear to have been an increase in the $450 renunciation fee since it was instituted in July 2010, and the Vancouver consulate site still shows the fee as $450. Nor did a google search show anything about an increase. Most likely the “expert” got it wrong.
“…….the US has the sovereign right to determine its own tax laws”
AND TRAMPLE ON EVERYBODY ELSE`S SOVEREIGN RIGHTS???
@pacifica777
thank you for update re: current fee $450 still in effect. That was one of many statements made at the meeting last night which was incorrect. They spent way too much time talking about what box those who file in US should put their RRSP’s. I read the actual IGA (about 60% of it), and read that RRSP’s were exempt. It was a gong show, with some laughter from the panel- which I found offensive. The notice for the meeting stated this was not to be a philosophical or political expression-type event. So, it’s up to each individual’s own due diligence as to what is best course of action. IB is one- and looks like only ally we can count on.
@Always something. Maybe they were referring to the falling CDN dollar. At 0.90 it’s $500 CDN; at 0.75 it would be $600 CDN.
@always something I think we all figured that the meeting organized by the BC MP, if that’s the same one, was going to be a pure compliance show. I sure hope most people there didn’t sign up!
Reply to my correspondence to what I sent the Canadian Prime Minister:
@Calgary411:
The “US” in this case is the Treasury Dept and IRS. Neither of which has the legal authority to threaten, demand or extort from any foreign financial institution.
As Senator Rand Paul states: The IRS has NO authority whatsoever to implement these punishing sanctions, nor do they have the authority to negotiate IGA’s with foreign governments.
So, just WHO was our government ‘negotiating with and from whom they won important concessions?
It is clear there is significant push back from Senators and Congressmen in the US regarding FATCA and they want it gone.
Also a submission to give IMMEDIATE relief was submitted to the Senate Ways and Means Committee by John Richardson, Stephen Kish and Willard Yates along with an articulate and informed submission to move immediately to Residency Based Taxation.
They acknowledge that it will take some time to remove CBT and move to RBT and plead with great reasoning to give relief IMMEDIATELY.
Why did our government not attach themselves to THESE efforts along with Senator Rand Paul and others who are moving to repeal this leviathan evil entity. In addition he has launched a lawsuit based on the 4th amendment ( right to privacy)
This will all take time and move through Congress on the first and the courts on the second but in the meantime, Canada could have done a lot of things to forestall an illegal and immoral threat to invade this country via our privacy rights and unwarranted intrusion into our private financial information.
Let’s be clear. This is an extension beyond any reason of the abuse of the departments of the US government to solidify power and control and confiscate not just from those inside their borders but throughout the world. In Canada, with tax treaty in hand they had the cards to call their bluff.
Instead they mewled and pleaded weakly and thereby gave this evil , oily criminal enterprise the keys to the kingdom. Reading the IGA one becomes so outraged and furious at the betrayal and how obviously our representatives capitulated when they had the ability and many good reasons to tell them NO and did not!
FuriousAC,
I think you speak for all of us — thank you for this comment. The work put into the Richardson/Yates/Kish submission to the Senate Finance Committee (here for anyone has missed it: http://citizenshipsolutions.ca/wp-content/uploads/2014/01/RichardsonYatesKishJan232014SFCSubmission.pdf is what the US could immediately do. If they won’t, US inaction speaks for itself. Their citizenship-based taxation law nothing but the cash cow I see it as.
I can say that if any of these compliance industry scum show up in Vancouver trying to drum up business I will start heckling them and yelling please leave. It would take all my strength not to pick one of them up and toss them out the door. Could someone tell me if these people will be allowed into the meeting and if so why? I can see lawyers and the media being allowed in but I cannot see why disruptive fear mongers hoping to use the meeting to gain recruits being let in. Let OUR lawyers explain what is necessary for us to know, not some enemy combatants and those looking to capitalize on our misery before we fully understand the game they are playing. I say that no soliciting should be allowed. Isaac Brock Society should publish a list of “low risk” industry participants on the site and only those who are approved as friendly and low risk for taking unfair expensive advantage should be allowed to speak.
@CheersBigEars
You should comment less, and do more. Seriously, you have some good ideas. Maybe you should try putting your money where your mouth is.
@CheersBigEars
I am happy to hear you’ll be attending the seminar on Feb 22. I’m helping to organize the event. So far there hasn’t been anyone I know of from the compliance industry planning to attend.
Are you bringing anyone with you? I’m trying to get a concise head count, as the room only holds 35 people and if it looks like we will be in excess of that, we may have to hold another session in the evening.
Thanks!