ADMISSION FEE $20 UNLESS OTHERWISE NOTED (to cover costs)
- Toronto, ON U.S. Citizenship & Young Adults: Navigating The Special Rules Imposed On U.S.Citizens Abroad Sat, June 7, 10 am to 12 noon, Univ of Toronto, St. Michael’s College, Carr Hall, 100 St. Joseph St, MAP NB: $20 individual or $40 for a family of up to four people
Vancouver notes (Feb 22) Updated on March 28 here
Toronto group Saturday, January 25, 2014, Carr Hall
I received the following announcement about information sessions, provided by Toronto based lawyer, for people affected by the USA’s extra-territorial tax overreach which violates Canada’s sovereignty. I think it is a good idea. If you are an alleged US person and you have become aware that the US claims that you should be filing your taxes, please do nothing, do not enter the OVDI program, and above all, do not call a US cross border tax specialist (neither a lawyer nor an accountant), but educate yourself first. The paid experts will scare the hell out of you. There are many options besides allowing a cross border specialist lead you as a lamb to the slaughter.
If you are a Canadian citizen or resident of Canada, you have specific rights and protections that even FATCA cannot revoke. This is why these informational sessions will be useful to you. They will lay out and explore all your options.
Sincerely, Petros
Please note that the speaker would like help finding venues that are inexpensive or free. Perhaps those living in the various cities could ask if a Church or other may be able to offer space. Please keep returning for updates.
Here is the announcement:
Recent CBC Coverage of FATCA and Citizenship-based taxation:
The recent CBC coverage of FATCA and U.S. extraterritorial taxation has raised awareness/concern over the plight of Canadian citizens of U.S. origin. Those who are learning about this for the first time (the OMG moment) will be experiencing a combination of shock, fear, betrayal and more. There will be lots of people interested in understanding the situation and determining whether and/or how to respond.
The following comment appeared on the blog:
Looks like the recent media coverage is creating mass panic in Canada. This might force the Canadian government to issue a statement sooner rather than later. This is good. But I feel bad for the people who are just having their OMG moment. They need some sound advice as to not to make bad decisions which would devastate them financially. While each situation is different, the Canadian government owes it to affected Canadians to provide some guidance and advice and fast. It needs to be official cannot just come from web sites like IBS or Maple Sandbox. Maybe the administrators should add some notes like they can’t be held responsible for actions that people take by following advice on these blogs. This is common sense, but might protect you from lawsuits.
We agree! The important thing it to stay calm! Do NOT panic! Do not react to this situation! Take your time to make the decisions that are appropriate to your situation! Above all else, do NOT even consider entering the Offshore Voluntary Disclosure Program or any other kind of disclosure program unless you are certain that it is right for you (which it almost certainly is NOT)!
Obviously NO blog or web site can provide reliable legal advice. No seminar for the general public can provide reliable legal advice! Your job is simply to begin gathering information and beginning to understand the new reality of U.S. citizenship.
What follows are a list of “Solving The Problems of U.S. Citizenship” information sessions that you can attend, for a nominal fee and anonymously! The sessions are NOT intended to provide legal advice. But, they are intended to help you identify the issues that may apply to your situation.
Do NOT engage the services of an accountant or lawyer before equipping yourself with some basic knowledge!
Solving The Problems of U.S. Citizenship – Exploratory Sessions
The topics covered are designed to alert you to issues and are NOT offered as legal or accounting advice specific to your situation.
They include:
Citizenship Issues:
– Are you STILL a U.S. citizen?
– Are your children U.S. citizens?
– What might FATCA mean for me?
Tax Issues
– Filing U.S. tax returns – what’s involved?
– Filing information returns (FBAR, Form 3520, 5471, etc.)
– Reasonable cause (avoiding penalties)
Financial Planning Issues
– investment products that are cancerous for U.S. citizens
Does it make sense to renounce U.S. citizenship?
– Renouncing U.S. citizenship
____________________________________________________________________
How To Attend …
Once a session has been marked “CONFIRMED” you are free to attend. Each session will have a $20 admission fee (to offset the cost of the room) which is payable in cash at the door. Neither taping nor video of any kind will be permitted.
first published 14 January 2014
@Mr A
Interest is taxable. The type of account it is would determine whether it’s subject to US tax.
http://tridelta.ca/The-Canadian-Financial-Planner/2013/10/31/americans-living-in-canada-how-the-irs-impacts-your-investment-strategy/
Hello,
When you visit or live in a country A you are bound by the laws of country A. It does not matter what citizenship you hold you are bound by the laws of the country you visit or live in.
Can the US apply its laws in country A to US citizens visiting or residing because someone has US citizenship? Can the US really enforce citizenship based laws in other country (country A)? Has this ever been tested in international law? What would a court in country A rule on this?
@cc All is fair in love and war. This is war.
@WhiteKat
I am in the trenches with you.
@ Petros-thanks to whoever is organising the london UK event on March 2, I will be there with bells on . I can’t wait , looking forward to the venue and time.
@US in the UK, -look FW to meeting you in person on that day- I think andhope there is a volcano waiting to erupt of the 250K USPs and more in the UK……..
@Victoria @US in the UK
You might want to look at: http://bernardschneider.com/about/publications/ I ran across him today while I was preparing my letter to my member of Congress. He has written on U.S. tax law towards overseas Americans in a Law Review article that is openly available via his website.
You might also want to look at the UK government’s agreement on implementing FATCA which exempts lots of types of agreements from reporting (including, oddly, individual savings accounts without excluding the stocks and shares ones).
My sense is that there are different types of Americans abroad. There are the well networked ones who know all the ins and outs of UK/US tax law backwards and forwards by now, then there are the other ones. There was an investment bank in London that offered a talk on U.S. estate planning in November and I was really surprised that it wasn’t fully packed (o.k., it was a bit of a marketing ploy and I am not their target audience, but just knowing all the little traps made it worth it and my attendance literally cost them peanuts (and a bit of orange juice)). It is ironic that a friend of mine in the U.S. who has much more money than me can set up a trust to protect her children’s inheritance, but the IRS will take 40% of everything over $144,000 going to my foreign spouse. I warn who I can, but there are a lot of people who just don’t want to know. I tell everyone to register to vote in the primary if they have voting rights and then write to their member of Congress to give this issue a push.
I live hours away from London unfortunately.
@Voting in the 2014 Primary
Bernard Schneider’s paper is a good one. So good as a matter of fact that the Senate Finance Committee is considering his proposal for implementing residency based taxation:
http://isaacbrocksociety.ca/2013/05/09/bulletin-from-shadow-raider-you-will-want-to-read-this/
Bubble
You need 67 votes in the Senate to overcome a Presidential veto. If this legislation can not be passed forget about Residential tax system
“Among them was Ayotte’s measure, which would repeal cuts to military pensions by ending a loophole in the tax code that allows illegal immigrants to receive the Additional Child Tax Credit. Her attempt to get a vote failed 42-54, with only one Democrat, Sen. Joe Manchin (W.Va.), voting with Republicans.”
.
.
Earlier this week, Chairman of the Senate Armed Services Committee Carl Levin (D., Mich.) backed away from support of Ayotte’s bill after first signaling his support. Levin was not aware of how the measure offset the cuts, and does not agree with closing the loophole that allows illegal immigrants to receive tax credits.
http://freebeacon.com/senate-democrats-block-amendment-to-restore-military-pensions/
Any cuts due to culminating residential tax system will be have be offset. I doubt all Republican will vote for it and not a single democrat. You need 67 to overcome a Veto by Obama
An important Maple Sandbox resource will be helpful to persons starting their journey on what to do about their US-ness. http://maplesandbox.ca/2014/have-you-just-learned-that-the-united-states-considers-you-a-us-person/comment-page-2/#comment-11717
Thanks for the info GeorgeIII, but I’m still not stopping my efforts, no matter how futile they might seem.
@Voting — thank you so much for providing suggestions for resource reading, including “The End of Taxation without End: A New Tax Regime for U.S. Expatriates” — I have skimmed a bit and need more time to digest, but I certainly will do that. More good evidence for the abolition of US citizenship-based taxation. Will we see the US Senate Finance Committee on Tax Reform agree? Will we see change? What a big club this is for the USA. I appreciate your commenting here.
@Disgusted — thanks for your today’s contributions. Victoria Grant will someday make a fine Canadian Prime Minister. Impressive. I hadn’t seen anything on Roco Galati before. Seems a brilliant guy with lots of common sense. I’ll listen more to him. I’ve looked at some of your previous on the Bilderberg Group – fascinating.
@Bubblebustin — I will put something together to present for Budget submissions.
Off to bed — the bathroom shower wreckers (and then rebuilders) will be back early tomorrow.
@Voting in the 2014 Primary
“I tell everyone to register to vote in the primary if they have voting rights and then write to their member of Congress to give this issue a push. ”
Please consider that anyone who follows that advice will disqualify her/himself from relinquishing US citizenship. (Of course they can still renounce at any time, but it may be more advantageous for some to relinquish if they qualify otherwise.)
@Voting in the 2014 Primary, You made an excellent point. Yes, there is a small minority of Americans abroad that have always been compliant. I talked to one person who has been filing her FBARs for nearly 20 years now. She has a lot of empathy for the non-compliant but that’s not always the case. I’ve talked to folks who say, “Well, they should have known.” The OMG moment for these people is when they realize that there is no reward (here or in heaven) for having been “good”. Their bank accounts are just as much at risk as any other US Person. 🙂
I’m not in the UK, I’m in France but I can certainly hop over on the Eurostar – it’s a nice trip. I’ve been following the French IGA closely and here’s my review of it:
http://thefranco-americanflophouse.blogspot.fr/2013/11/a-review-of-franceus-fatca-iga.html
@US in the UK, Yep, the London Brockstock just didn’t work out. Kinda disappointing but, hey, the universe is giving us another opportunity. 🙂
unfortunate for me the date of febuary 9th in vancouver is when i return from my warm sunshine winter vacation occures
wishing all the best of luck in getting the information to make sense of this situation
What would be your tactic?
Scenario: Mrs. Smith renounces in Q1 2014. This means filing all tax forms in 2015. She should NOT qualify a s covered expatriate.
Mrs. Smith has an IRA in the USA and would like to liquidate (i.e. transfer in her country of residence) her account as soon as feasible. She can do it at any time without penalty, but does not have an urgency to do it right away. To add to the complexity, her country of residence has a Dual Tax Agreement with the USA. This means that taxes should be paid in the country of residence and not in the USA (unless DTA does not apply to expats?).
Now the question: Tactically when would you transfer the IRA?
In 2014 IRS does not know yet you have renounced and may fight it as some form tax evasion.
In 2015, this is the same year they will get her tax filing as expat. Is it smart to add IRA liquidation in the same year?
In 2016, staggers things a bit
In 2018 / 2019, after the three year prescription period has expired?
Thanks in advance for your thoughts and arguments.
@jgl151
Assuming I have not missed anything in your description, I found myself in this exact situation. Unless you want to mess around with possibly less tax due to exchange issues (and that could go the other way as well) I would move it now. I renounced in Jan 2012. I was afraid of possible FBAR penalty (not these items but CDN ones)/confiscation as well as appearing as you describe. So it was about a month later I moved them and I lost thousands on the exchange. The institutions took 15% withholding (which I mistakenly thought would apply since I was by then, a nonresident alien). I filed the 1040NR with both accounts as “income effectively connected to a US source” and calculated the penalty on the additional amount owed. They sent me a final bill for penalty/interest for not paying installment payments on the amount owed. The only good thing was that they sent me confirmation that the 1040NR was finished. Also, I wondered, before filing, if it would be possible to claim treaty benefits and only have to pay 5% extra. But whatever form it was that would have to be filed had a caution about 877a so that didn’t seem a good idea.
Hope this is helpful. I think no matter when you do it, one can imagine IRS will view it suspiciously but either way, assuming you will pay the tax, they are going to get it. I see no advantage in waiting.
Tricia — extortion!
Yes, but at least they didn’t get all of it!
Still thinking about the article and how proud I am. That took guts. I feel honored to “know” you all throughout this bruhaha. Nice to actually “see” you as well!
Thanks, Tricia. Guts or stupidity or just feeling I could no longer hide in fear. And, we have to hisw as there are threats to destroy all we’ve tried to accomplish in our lives and to the well-being of our family members. I’m glad there is a little bit more awareness of FATCA and US citizenship-based taxation coming across the border into Canada than there was last Friday. And, I hope ALL Canadians realize it will be a great cost to Canada and to each of us as individuals in Canada (and elsewhere in the world). It is now our responsibility (and now the responsibility of man more Canadians) to continue convey our outrage to our Canadian government representatives and ask them if ALL Canadians will continue to have the same rights under the Charter of Rights and Freedoms — or if they will practice discrimination by so-called US nationality. Are we Canadians first or US Persons first?
Thanks for the detailed reply. It is indeed complicated and the consequences of whatever the final decision cannot be estimated! In addition to a 1:2 ratio between DTA and Non Resident tax rate, there is also the unknown attitude of the country of residence if I go your way and pay 30% as a NR to the US. They could say “We do not care! You reside here and need to pay taxes here. Best case is it they accept a tax credit!!”
Will give some more thought!
@ tricia, @ calgary411,@jgl51…. keep going, keep strong in the knowledge that there are 7.5 million like your………………….. . you inspire us all . your courage is AWESOME..
@jgl51
I don’t know if you’re in Canada or not but it would also turn out to be a 1:2 ratio (Treaty rate is 15%, US rate 30%**). The difference may be that in my case, Canada is not interested in taxing my inheritance. I did not understand why it was effectively connected but my accountant had put the accounts there in a previous year, so I did the same. Plus there were 1099’s to accompany them so if that was not correct, one would think the IRS would have pointed that out.
** If the interest is effectively connected to a trade or business in the US, you are taxed the same as any resident in the US, i.e., not 30%.
http://www.irs.gov/publications/p519/ch04.html
Nonresident Aliens
A nonresident alien’s income that is subject to U.S. income tax must be divided into two categories:
Income that is effectively connected with a trade or business in the United States, and
Income that is not effectively connected with a trade or business in the United States (discussed under The 30% Tax, later).
The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to U.S. citizens and residents. Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate.
The 30% Tax
Tax at a 30% (or lower treaty) rate applies to certain items of income or gains from U.S. sources but only if the items are not effectively connected with your U.S. trade or business.
Fixed or Determinable Income
The 30% (or lower treaty) rate applies to the gross amount of U.S. source fixed or determinable annual or periodic gains, profits, or income.
Income is fixed when it is paid in amounts known ahead of time. Income is determinable whenever there is a basis for figuring the amount to be paid. Income can be periodic if it is paid from time to time. It does not have to be paid annually or at regular intervals. Income can be determinable or periodic even if the length of time during which the payments are made is increased or decreased.
Items specifically included as fixed or determinable income are interest (other than original issue discount), dividends, dividend equivalent payments (defined in chapter 2), rents, premiums, annuities, salaries, wages, and other compensation. A substitute dividend or interest payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts received on the transferred security. Other items of income, such as royalties, also may be subject to the 30% tax.
@crystal london,
Thanks. I really appreciate that!
Thanks for the details. Here too tax rate would be about half but the difference they also want their share! Maybe they accept a tax credit so I do not pay twice! Tax rate on IRA distribution in US is 30%. Of course I would prefer to pay the lower taxes….