To help you judge if,
your experience with your local bank, credit union or insurance company (or as the US defines them: “foreign financial institutions”) will be a comfortable one, as some advertise,
shared here are excerpts of notes from a meeting set up with a “US Person” and Canadian husband by a Vice-President of the wealth management branch of one of the Big Five Canadian banks:
1. ..all previous recommendations for changing investments have been done by telephone… In all the years as clients, they never requested a meeting with us.
2. re green card assumption and location of the company worked for (this question is one way to find out if a person has worked in the USA). *(see below)
3. Bank representative met with each of US Person and Canadian husband alone as they do not have joint accounts.
…wanted to sell US Person’s non-registered mutual funds and give the cash back to local branch of the bank (it is not worth their while “all the paperwork” to accept clients with less than $500K!!!!) US Person refused….had asked on numerous occasions for the names of PFIC compliant funds. At the end of the meeting he agreed to come up with a list of PFIC compliant funds. Until 10 days ago he did not know the meaning of PFIC. Asked why he would sell me mutual funds if other investment companies have known about the IRS rules since 2010. His answer: “we’re not expected to know – we ask people to check with their tax accountant” Then he asked ME if it is OK to have mutual funds in an RRSP.
4. … asked to do a review of our net worth. When I told him that for the past five years my annual gross income is about $23,000, he looked horrified. US Person says “I don’t think I fit the “wealth management” profile, even if I were not a US person.” He kept asking about credit lines – three times and looking at me each time. Non-US husband uses credit line. It is important the other US persons know that credit lines will count in their highest and year end balances for FBARs and FATCA tax forms 8938, and of course in the aggregate $50K US that the banks will report to CRA.
5. US Person asked him how many accounts the “wealth management” part of this bank has with Canadians with US connections. He replied “not as many as you think”. US Person said that she should have replied “by the time you get through with turning over all the names of people with US indicia, you could be looking at 200,000 or more (dividing the one million US persons among the big five) Canadian clients that you will lose!”
6. Same story about registered accounts being exempt – this V.P. could not grasp the concept of US persons being thrown under the bus (did not bother to try to explain – and his office spent hours writing letters etc. when my very savvy (sarcasm) IRS agent could not understand that the separate tax slips for each mutual fund were declared on both my Canadian and US returns. “This V.P. knew about the monstrous fine, but I am sure he must think that I am one of those tax cheats you read about in the newspapers.” AND, the head office used to issue 1099 forms, but this stopped in 2011.
Comment by US Person after this experience: Wealth management V.P. said that the reason for all the paperwork was because of 9/11 – does he think we are as ignorant as he is?!
Definitely an uncomfortable experience.
*US Person said from separate meetings V.P. assumed that Canadian husband had a green card and that he had lived and worked in the USA. Canadian husband wrote letter saying that he worked for an international company for almost 40 years in three different countries but NEVER worked or lived in the USA. He has only one citizenship, Canadian. Canadian husband told the V.P. that he did not have permission to send his Canadian citizen private financial information to CRA for onward forwarding to the IRS.
Canadian husband also asks for copies of all documents signed the day before (should they have been changed after the fact). …and finds it rather odd to have to give the name and location of the company he retired from 13 years ago (before 9/11), as a source of investments.
GwEvil,
That’s exactly what US persons here in Australia thought too,
Until they received a letter from their bank informing them that their accounts would be reported and a friendly reminder to file their FBARs.
Banks are putting the pieces together!! You can’t stop the inevitable, if you are a US person, they WILL find out, and report.
@sheowahya – not true. The bank has never had that information about me, so there is no way for them to determine that I am other than me admitting so, and only an idiot would do that! Also, my new credit union account was opened with the same id as with the bank – my driver’s licence and there’s nothing to indicate that I am anything other than what I am, a Canadian!
“GwEvil says
April 12, 2014 at 8:59 pm
@GeorgeIII – cold comfort for those of us with lines of credit!”
Have multiple lines of credit all under $50,000 US. If you are not hidden.
People who indices are hidden; no current address for account under 1 million. no US birth place at bank.
Keeping in mind ‘Don’t get your financial advice from the internet’: http://www.creditsesame.com/blog/how-credit-cards-affect-your-net-worth/
THIS IS NOT ANY KIND OF ADVICE ESPECIALLY IN SOMETHING AS IMPORTANT AS THIS!!!!! (but would it make sense from what this says that the more LOCs, the less your Net Worth, which for US Persons and the 8854 is a good thing?)
Wonder what the qualifying questions will be when a Line of Credit, a mortgage, a credit card is applied for after July 1, 2014?
One of the admins should start an ongoing thread where people can report their experiences with the various banks. BTW, I don’t think that lines of credit are reportable on FBAR.
My reasoning:
FBAR is to report the highest balance in an account. A line of credit gives you a right to borrow money. That borrowed money that could then deposited into the account.
The ignorance of the rules (on he part of the banks) is a bigger problem than the rules themselves. Because of their ignorance the banks will be anxious to encourage reporting on anything and everything.
In any case, all of this will be a temporary blip in history while the remaining U.S. citizens abroad are being exterminated.
Is the U.S. the first country in history to destroy its citizens abroad?
The most important question for all Canadians has become:
Are you or have you ever been a U.S. citizen?
@USCitizenAbroad – what I don’t understand is why would part of the question be “…have you ever been a U.S. citizen”? What would it matter if you used to be one?
@cindy63, re;
“….Let’s get real–Canada’s “democracy” is bought and sold by the banks, just like the US, and we have to focus our energy against the banks too.”
Can one expect any objectivity when one reads that for example the Banker economists are routinely advisors to the provinces and the feds, ex. http://en.wikipedia.org/wiki/Don_Drummond_%28economist%29 , and that the new Finance Minister comes from banking http://www.cbc.ca/news/politics/joe-oliver-to-replace-jim-flaherty-as-finance-minister-1.2577648 ; who could defend that as the workings of true democracy? Are there no economic advisors and economists who are not bankers?
We and our family savings and assets are merely to be bought and sold and traded for the profit of those with power and influence. They tell our elected representatives what to do.
Will the Bankster economists advise a firesale of provincial and federal assets? What do you think? What would generate the most profit for them and their shareholders? Regardless of the best interests of the ordinary taxpayer?
What outcome and recommendations would we expect when the elected head of our province asks a bankster what to do with the People’s assets http://www.thestar.com/news/queenspark/2014/04/11/ontario_ropes_in_td_bank_chief_to_optimize_lcbo_hydro_one_and_ontario_power.html . Those public assets belong to the citizens, residents and TAXPAYERS of Ontario, our children, and future generations – yet unelected private business individuals with vested interests are to direct what will happen to them?
WE the people did not elect the Banksters to cut up and distribute the common assets of ALL taxpayers, which are held in trust for future generations. We did not elect the Banksters. What right have they to decide what they will do with our hard earned savings and our personal information in their quest for profit? What a direct conflict of interest. Or their secretive skulking lobbying behind the scenes for FATCA and other deals so they can use our assets, deposits and investments for their own enrichment. They were willing to keep us as fellow citizens, taxpayers and assetholders in the dark as long as possible. And now will seek to impose whatever hurdles they see fit to put in place to protect their interests – while telling us how OUR own money and private information is to be treated in their custody?
F that.
Would you trust people who hail and welcome the FATCA IGA as a good deal? Would you award them custody of your savings?
And in the same vein, I do not support the PRPP over the enhanced CPP. Enhanced CPP cannot not be taxed and made penalizable and confiscated as a ‘taxable foreign trust ‘ by the US, whereas PRPPs can be. PRPPs will generate locked-in assets and juicy administration fees for the investment industry, whereas CPP will not. Guess what the Banksters and IIAC and investment kin are in favour of? NOT CPP. Therefore, support only politicians who are in favour of the enhanced CPP and NOT private PRPPs.
Exercise our rights as informed consumers. Do NOT do business with the banksters.
Starve them of our assets and family savings. Use only credit unions.
Why reward bad behaviour?
That question of where you were born or where you used to be a citizen still bothers me. This is all so out of hand.
@George, I have filled out all the proper paper work and relinquished. I’m on their radar. I owed nothing and knew I would not. I also knew that I wasn’t going to be able to go along with this and stay married to my husband with all the complications and implications for him and my son so I relinquished. Now I await my CLN and I want to take it into the bank and have a copy on my file and tell them under no circumstances are they to report our accounts to a foreign nation. CLN’s are taking a long time to get now. Was told when I first went in four to six months, now am told nine months to one year. And “We have hundreds of these right now” My bank knew I was U.S. citizen. I never hid it and even opened accounts using my passport since I do not drive so that was my I.D. on record. Well, no I am not U.S. citizen and want the proof.
Looking at how complicated and screwed up this is going to be I can see though I think lots of Canadians who were never American are going to end up having their accounts reported by mistake. And being called in for a meeting? Like going to the principals office after being a loyal and good customer for decades? How humiliating. Those sob!
Good idea, USCitizenAbroad. Might as well be me. It can be similar to Pacifica’s “Consulate Directory Report”, copying and pasting from submitted comments into a document, perhaps categorized by bank, credit union or other financial institution name.
wow, Badger used the “F” word! if only just the “F” lol….but yes Badger…F that and F them…Credit unions from now on. Once my mortgage is up for renewal, I am switching to a mortgage broker for our mortgage and LOC.
I just opened CU accounts with my driver’s licence and will eventually switch all my accounts over. I am very impressed with the hands-on treatment we get from the CU. The lady who opened the accounts for us, was the one who answered the phone when I called three times in a row the other day to ask her a bunch of questions about how things work with the accounts and the online banking.
@GwEvil
Mortgage brokers will shop your mortgage between lending institutions. I don’t know how that will benefit you, as you are still required to qualify with the lender.
@GwEvil,
Purely alliteration. FBAR, FATCA, FFI, Banksters ……
@Badger – lol
@bubblebustin – don’t worry, my broker knows the score and has found me a non-reporting financial entity
Excellent, GwEvil.
GwEvil
Badger must have listened to Liquid Lunch. Remember Hugh and Sandra with the Fubar sniggles?
@ AtticusinCanada RE slow getting CLN
I don’t know what consulate/embassy you went to but the Toronto Consulate said (via email) that they would provide for me an individualized/dated “temporary CLN statement” that I could take away after my renunciation appointment (NEXT TUESDAY – – US TAX DAY!!!!!). I will let everyone know if this actually happens; if so, you and others who are awaiting the CLN (and it’s getting closer to July 1) should immediately contact the consulate you attended and strongly request such a document not only for all the FFIs, but in case you need to travel into the US to attend “cousin Martha’s” funeral and your Cdn passport has a US birthplace…..
@ LM
My husband got an “interim letter” from the Calgary consulate, immediately by e-mail and about a week later an official snail mail version arrived. One little glitch though. Apparently when you apply for your first Canadian passport after becoming a Canadian citizen you have to get a copy of your citizenship certificate notarized by Passport Canada. Either you take it, in person, to the nearest Passport Canada centre or you have to mail the original away. My husband would never let that certificate out of his sight so he has to travel to Calgary to get the deed done. They misdirected him to Service Canada in Lethbridge and after 2 hours of driving was told that they aren’t authorized to do that. Its an even longer trip to Calgary. Just a wee warning to newly minted Canadians. Sorry, went off topic.
I had the experience during 2009 OVDP in which the amount we transferred from a home equity line into our joint chequing account towards the purchase of our present house was included in the initial FBAR penalty (since that chequing account now had the highest balance for that year, albeit for only five minutes after which the draft was made out to lawyer for the closing). Credit line transfer to chequing did finally get taken out of penalty with help of second lawyer +$$$ (maybe because the original application was in the name of my Canadian only spouse). My thought re FATCA and bank reporting is that if anyone transfers to one of their bank accounts an amount over $50K from a credit line or other, this will in turn will put the balance in that account over $50K (US) – even for five minutes. The bank will almost certainly report that high balance to CRA and in turn it would be forwarded on to the IRS. I assume the banks will be scanning all activity, not just month end balances. To my knowledge (at least between 2009 and 2011), the credit line amount you’re approved for does not have to be included as an asset in your net worth. Just read George III’s post…..I give up…the discrimination against US persons living outside the USA is beyond belief. Imagine if homelanders were told how much they could keep in their chequing accounts, save for retirement etc. etc.?
@GW, @Northernstar, and @Bubblebustin, my accountant told me to report my Paypal, creditcards, travelcard, any store card, and even my prepaid sim for my phone!! It all has to reported (according to them) on both FBAR and 8938.
@monalisa1776
Your pre-paid sim also… why… those are bought without any names… prove I own them… the same with gift cards… u pay in cash… they have no clue who owns them… cards belongs to one of the kids or the dogs… prove I used my funds to purchase it… my logic… I am probably wrong… declare whatever is actually in my name…maybe… if my name ain’t on it… I don’t own it… it belongs to the dog… 1st class citizen bought it for the dogs.. why… same reason they share their cup of coffee with the dogs… they are nuts… lol
@Anne Boelhyn
A non-interesting checking account should never have been part of the OVDP penalty base because (am assuming this is true). the account did not pay interest – therefore it didn’t interest which just belonged to the U.S. Treasury.
@All
What we are seeing is the “Switerlandization” of the world. In Switzerland, the banks have entered the OVDP for banks program. This means that they have agreed to pay a penalty to the U.S. (20% to 50% of the account balances of those who are suspected to be U.S. persons/property). What’s happening in Switzerland is that once somebody is suspected of being U.S. property, they are required to prove that they are U.S. tax and FBAR compliant. They can prove this by entering OVDP. The point is that the U.S. WILL get a penalty paid for all U.S. accounts. The only issue is whether the bank pays the penalty or the U.S. person pays the penalty. Can this be characterized as anything but extortion?
In other words, the U.S. is terrorizing the banks into terrorizing the customers. As we know the banks (aided by the cross-border professionals) are now IRS enforcers – they are enforcing the property rights that the “Land of the Free” claims over its supposedly “Free” citizens.
The banks stupidly believe that the U.S. will not persecute them if they co-operate with the U.S. identifying U.S. property and “turning it in”. They are of course very stupid. Sooner or later the U.S. Gov will go after the Canadian banks arguing that a previous association with U.S. customers means they must pay penalties too. This may not be the exact language, but it will happen.
It started with Switzerland. It has now moved to Israel. Rumors are India and Singapore are also on the list.
What is needed is a worldwide coordinated response to stand up to the U.S. Tax Terrorism. The message must be very clear and it’s this:
The world will NOT tolerate U.S. tax terrorism, tyranny and extortion. The world will take steps to end the status of the U.S. dollar as the primary world reserve currency. The world will NOT allow the U.S. to levy taxes on any resident of another country. The world will NOT tolerate U.S. spying. The world will require the U.S. to play by the same rules as other countries. The longer it takes to formulate a response, the harder it will be.
As a great American (the old kind, not the new kind) said:
“If we don’t hang together, we’ll hang separately.”
What does all this mean practically?
Not entirely sure. But the following seems necessary to me:
1. Regardless of he strength of the legal case the Charter Challenge must go ahead. It will generate lots of awareness around the world. The government will no doubt claim “They made us do it”. “We had no choice”. This is of course BS. They just think that if they persecute one minority group, the U.S. will leave the rest alone. In his inauguration speech, Kennedy said something to the effect that:
Countries that deny the rights of its weakest citizens will never be able to protect those who are most powerful.
2. I would point out that at the present time, the FATCA IGA is not law. Therefore, at the present time, ANY participation by the banks in FATCA related stuff is clear discrimination. Therefore, legal remedies must be considered against the banks for conduct prior to the IGA enabling legislation being passed.
Those are the facts, and as President Reagan said:
Facts are stubborn things.
3. This is going to take a very very long time. Relax. You need to understand that “win, lose, or draw” you lost the birth lottery. There is nothing you can do about that particular fact. You must either relinquish immediately or accept the consequences of being U.S. property. You will survive this, but you must understand that there is no quick fix and that it will take time. We live in difficult times. But, as the U.S. Marines say:
The difficult we do today. The impossible takes a bit longer.
4. Because of U.S. citizenship you are different from others. You live in a different reality. Those who are wealthy will have to spend the rest of your lives defending your wealth from the U.S. Therefore, the time has come to think in terms of a new definition of wealth. This new definition of wealth will be “peace of mind”. Learn how to live on small amounts of money. Appreciate the value of a walk in the part or the wonders of being immersed in a good book. In other words, invest in the things that are harder to quantify. Invest in the things that are harder to confiscate. Remember, FATCA Hunt is a new sport to U.S. persons. The U.S. is not well liked. Therefore U.S. persons are not well liked. This means that there will be no third party help. I find it difficult to imagine that international human rights groups will come to the aid of U.S. citizens. Why not? Because they are U.S. citizens. Can anybody identify a single human rights group that would be sympathetic to U.S. citizens?
As Orwell said:
All animals are equal, but some are more equal than others.
Anyway, back to the practical suggestions:
1. Move the Charter challenge forward. It will increase awareness of FATCA and U.S. extortion.
2. Begin to expose the banks for what they are.
@Sheowahya,
1.) US Citizen expats that are permanent residents somewhere ARE either getting the shaft or will get the shaft. The only hope they have is becoming a citizen elsewhere and getting rid of their US Citizenship that is like chewing gum on your shoe.
2.) Dual Nationals who were and are American Firsters are about to get thrown under the bus and because they wore the Red, White and Blue on their Arm are in a rather difficult bind.
3.) Those that honestly relinquished but remain “undocumented” are likely to not experience a life altering change because they never branded about their past. An honest past relinquisher probably does not have the fondest attitude to the USofA and has blocked that past away from the world.
4.) Those that renounced and have a CLN or relinquished in the past but have now obtained a CLN, often at great travel expense, will likely have no problem but will still be best served if they avoid places that ask for place of birth. Why? This whole thing is a mess and the IGAs have language like may or should instead of SHALL. If you have a CLN and a US place of birth there is NO obligation on the financial institution not to sort you out.
@USCitizenAbroad, @All.
I had a very comfortable experience but it was NOT at a bank. I answered all account opening questions truthfully.
But the problem of being hunted remains and the hunt will get worse.
In the Canada IGA, the Banks can report anything and anyone!!
“Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Canadian Financial Institution elects otherwise”
AND/OR
“If any of the U.S. indicia listed in subparagraph B(1) of this section are discovered in the electronic search, or if there is a change in circumstances that results in one or more U.S. indicia being associated with the account, then the Reporting Canadian Financial Institution must treat the account as a U.S. Reportable Account unless it elects to apply subparagraph B(4) of this section”
Notice the “unless it elects” language?
It does not matter if you have a stinking piece of paper called a CLN!!
If you were born in the USA, that is a permanent tattoo!!
People, a CLN is not, repeat not, a Golden Ticket. At best, its gold paint on some recycled aluminum ticket.
Once a bank picks up a US place of birth, the Government of Canada has given the Banks unlimited ability to report you!!
It will not matter if you tell the banks you have a CLN. The decision for them to report is their decision, not yours, not that of the CRA.
@MonaLisa1776
I am really surprised that your accountant told you to report your phone SIM card and travelcard. I have looked at U.K.-U.S. IGA and all the references I can find are to cards that can be loaded up with over $50,000, for example:
“credit cards will not be considered to be Depository Accounts where the issuer of the credit card implements policies and procedures (by the later of 30 June 2014 or the date it registers as a Financial Institution) either to prevent a customer deposit in excess of $50,000 or to ensure that any
customer deposit in excess of $50,000 is refunded to the customer within 60 days..”
“Entities that issue payment cards that can be pre-loaded with funds in excess of $50,000 to be spent at a later date, such as a pre-paid credit card or “e-money” will also be considered to be Depository Institutions for the purposes of the Agreement, notwithstanding that these entities are exempt from the
definition of a Depository provider for the purposes of the provisions of the Electronic Money Issuers Regulations 2011.”
http://www.hmrc.gov.uk/drafts/uk-us-fatca-guidance-notes.pdf
Even if you are commuting to London from Swindon (annual railcard cost an eye-watering £8,000 or US$13,200 per annum), this would fall well below the limit, so that would be one less thing to report. You might want to see what the terms and conditions on your SIM card are (can it really be pre-loaded with $50,000?).
It does look like they are interested in credit balances on credit cards (is this opposed to debt balances?), unless your credit card is issued from a bank where you have lots of money:
“A Depository Account will include any credit balance on a credit card (a credit balance does not include credit balances in relation to disputed charges, but does include credit balances resulting from refunds of purchases) issued by a credit card company engaged in banking or similar business.”
“Where a Financial Institution elects to apply the threshold for Depository Accounts this will mean that a credit card account will only be reportable where, after applying the aggregation rules (See Section 4.14):
• there are no other accounts and the balance exceeds $50,000
• the total balance on all aggregated Depository Accounts (including the credit card balance) exceeds $50,000”
Let’s not give them any ideas about more things they could have us report, they have enough already!
@Undocumentedemigrant, I share your concern that even a CLN won’t necessarily protect people from FATCA. After all, it doesn’t offer full proof that I’m no longer a ‘US person’. I could resume my US personhood for tax purposes if I ever overstated in the US or subsequently received an extended visa or green card; I also understand that the IRS could still consider me as a US person for tax purposes if I have failed to properly log out of the tax system by correctly filing 8854.
I could see banks not only insisting on CLNs but also certified copies of past tax returns perhaps up to five years ago, along with FBARS to prove full compliance. They might also want proof that one has been in continual residence where they officially live via domestic bills, credit card statements, etc. I agree that it could indeed be the banks themselves who could be our biggest threat, especially if the IRS threatens to fine them as in Switzerland.
@Publius, I believe they just thought that it was safer to over-report just in case, though agree I probably didn’t really need to report my travel card or sim; its just that they can be loaded with a cash balance. I’d imagine that even an Amazon gift card, if held online, could be in theory FBAR reportable. Paypal is iffy because its already a US-based set-up, I think.
I am actually biting my nails again because the IRS still has no record that they’ve received my tax return and 8854 even though it had a signed-for delivery via Fed-Ex…I wonder if they don’t find it within another couple of weeks whether I should just resend it again just to make absolutely sure that they acknowledge its receipt well within the 15 June deadline….I dread them considering me a covered expatriate because would then owe them around $15,000 taxes in my deferred employer pension plan!!! God, oh God, I just want to get all this behind me. :'( It’s still making me fraught with worry.