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
@Calgary411
What a joke. No mention about snow birds. They will find out soon enough.
They aren’t “protecting many common registered accounts” when they are still tax reportable and subject to US tax. No mention of this little detail however.
Ugh. Are these people idiots or collaborators?
advocacy@carp.ca
Your fawning statement in support of Canada’s acceptance of FATCA is not acceptable.
Please read this.
http://opinion.financialpost.com/2014/02/11/canadas-u-s-tax-capitulation/
Many CARP members and their children will now have their bank records turned over to the IRS. This is not watching out for CARP members’ interests.
Unless this is corrected, I will urge all CARP Members I know not to renew their memberships.
@Joe Smith
Many are snow birds with US property and US banking accounts. They will find out soon enough.. Nice you wrote them.
How would a Canadian bank or financial institution know if a given account-holder has dual US/Canada citizenship? (presumably a bank would know if an account-holder was a US citizen (not dual citizen) because of a lack of a SIN number associated with the account?).
Will they be asking all clients with more than $50k in their accounts to fill out a form? Or will the banks simply give *ALL* account info to CRA and let CRA figure out which ones belong to US or dual US/Canada citizens?
@Sum Guy,
Permanent Residents (Landed Immigrants) in Canada who do not (YET because they have not applied for it / don’t want to apply for it) also have Canadian citizenship can and do apply for Social Insurance Numbers.
northernstar and others,
Anyone with CARP / Zoomer (sales pitch to “a certain age” organization), should also contact CARP / Zoomer to let them know what you think!
They got their acronym messed up. Should be CRAP.
@ bubblebustin
You got that right. ZOOMERS advertising aims at the rich and the wanna be rich. They got the money to pay for FATCA. Those that do not. SURPRISE!
My primary question is still not answered:
How do the banks know if any given non-registered account over $50k is owned by a US or dual US/Canadian citizen?
This is long, so I apologize for that. If it encourages anyone else to correspond with CARP / Zoomer, it is worth putting it here.
Nobody knows the answer to that yet, Sum Guy. What will you say to your local CANADIAN “foreign financial institution” should they ask you if there is any reason that the US would consider you a US Person? We all CAN be prepared for an answer.
CARP’s (so far) automated reply:
From: advocacy@carp.ca
Sent: Wednesday, February 12, 2014 8:28 AM
To: caroltapanila
Subject: Thank you for contacting CARP
Thank you for contacting CARP.
We receive hundreds of email messages each week, and while we do read them all, we may not be able to reply to each one directly.
We want you to know that we appreciate your correspondence and the comments you are making.
We have created this automated response to answer many of your frequently-asked-questions, as quickly as possible. We will try to answer all other questions directly when we can.
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Find Moses Zaimers address and mail him registered letters, if you feel safe enough, to ask him if he would his birth country to do what the USA is doing. He is worth millions.
Find Moses Zaimers address and mail him registered letters, if you feel safe enough, to ask him if he would his birth country to do what the USA is doing. He is worth millions.
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 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. We fully appreciate that many dual citizens will still face potential FATCA incursions.
Sincerely,
Michael Nicin
Director of Policy
416.607.2479 | 1.888.363.2279 x279
30 Jefferson Ave. Toronto ON M6K 1Y4
m.nicin@carp.ca
How does the IGA give us more protections than what we already had without it? I think it’s quite the opposite.
It’s like after the dust settled after Streamlined was introduced. My lawyer said “Streamlined doesn’t give us anything we didn’t have without it”.
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, Canada
From: 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 Policy
416.607.2479 | 1.888.363.2279 x279
30 Jefferson Ave. Toronto ON M6K 1Y4
m.nicin@carp.ca
Visit us at http://www.carp.ca
This article should be titled “CARP Lightweights in on FATCA”.
Sorry, CARP; an ounce here or there doesn’t cut it. You don’t represent this “retired person”. You’re not even close!
@maz57
They don’t understand it… just the crap they think is important. Here is how we could have been protected.. SAY NO to IGA & shove up your butt.. here is some maple syrup to help u
Bitter irony would be… if & when this is settled.. all those who *helped* with this agreement…. violating all our rights… oh crap… we got the dang american taint also… Or better yet… funds flow out & never be seen again.
hey… just thought of something… We maybe able to collect gov’t help after we are legally robbed by a foreign gov’t. That sure would help the canadian gov’t budget… they drain our funds… we drain their funds… fair is fair
Re: Mr Nicin’s statement: “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 “,
Why do we keep hearing that USA has ‘sovereign right to determine its own tax laws’ over, and over again? What is so hard to understand about the fact that USA laws stop at the Canadian border? Sure, USA make whatever laws you want, but apply them to people who actually live in the USA. Soon, USA will be able to apply the death penalty to Canadians who it deems have US person status. Where does it stop?
Fast forward 50 or 60 years. Canada will be offering us an apology and restitution.
@ USP Foreigner.
Be careful what you wish for.
Any Canadian government compensation we might receive after we are robbed by the US government would likely be deemed income by the IRS! We’d have to pay tax on that as well!
Someone should send CARP a link to this post and suggest they read all the comments.