HOUSE OF COMMONS
2nd Session, 41st Parliament
NOTICE OF MEETING
Standing Committee on Finance
Meeting No. 34
Tuesday, May 13, 2014
3:30 p.m. to 6:30 p.m.
(613-947-7776)
Orders of the Day
Televised
Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures
Witnesses
3:30 p.m. to 5:00 p.m.
As an individual
Allison Christians, Professor
H. Heward Stikeman Chair in Tax Law, McGill University
Credit Union Central of Canada
Marc-André Pigeon, Director
Financial Sector Policy
Moodys Gartner Tax Law LLP
Roy Berg, Director
US Tax Law
Videoconference – Toronto, Ontario
Investment Industry Association of Canada
Ian Russell, President and Chief Executive Officer
5:00 p.m. to 6:30 p.m.
As an individual
Arthur Cockfield, Professor
Faculty of Law, Queen’s University
Portfolio Management Association of Canada
Katie Walmsley, President
As an individual
Lynne Swanson
Videoconference – New York, New York
As an individual
Max Reed, Attorney
White and Case LLP
I am posting this apart from the cross-post from Sandbox so more people will see it. In addition to Lynne, some familiar faces, Allison, Roy Berg and Arthur Cockfield. It will be televised. Does anyone know how to record this?
I, too, am leery of Roy Berg. He quoted me $20,000-$27,000 to come into compliance with a $14,000 retainer! I was so taken aback by those numbers that I couldn’t catch my breath. The physical reaction I had was as if I had received tragic medical news regarding myself or a family member. Mr. Berg suggested a call be set up to discuss the break down of his fees and I was to get back to him with times that would work for my husband and me. I sent him three e-mails and did not receive a single reply back from him. He is not a person I would trust or do business with. I am not happy to see Roy Berg’s name as a witness.
@no one
>why didn’t you opt out?
This was a difficult decision. We had a large number of accounts. Most had very small balances. We had a lot of pensions with reasonable balances, some ISA’s with large balances and a bunch of small stuff.
We got all the accounts with no tax excluded (pensions and the biggest ISA). This got the balance penalty down to $31k from out earlier $71k. We had very complicated and expensive PFIC taxes on the ISA’s. Our agent wanted everything and they denied us so much and changed the rules on us a lot.
Everyone here points to the IRM and says what a great deal you will get with opting out. The fact of the matter is they could just ignore all that and take a very large amount of money off us. Unlike many who opt out and speak here I actually have money and my tax returns show that. It was very clear from the interaction with the agent that they wanted to take a lot of money from us.
Realistically I might have been able to get the $31k dropped to $5-15k or something like that. It would cost me a lot to do the opt out in lawyer fees. I would be taking a lot of risk though.
I had already spent a couple of years on this. Spending that time on my job is worth a lot.
So I paid the Obama tax and moved on.
It looks like these demanding bills I got from the IRS are rubbish caused by the crazy way they do things.
Neill, thanks for the explanation.
If you already signed the 906, I guess there might not be much to do. This last bill is a hassle, and obviously a mistake on their part. Still, I wonder if it might not be worth contacting the tax payer’s advocate to straighten it out and see if they can get you a better deal outside if OVDI.
I am so happy I did not join.
@no one,
My mistake was to join OVDP (under the advise of a lawyer). The whole painful mess resulted from that mistake. It’s done. There likely isn’t a better deal for me now. My hope is the whole PFIC and FATCA thing we explode in a terrible mess for the government.
@badger
Thanks for the references. Yes, clearly not on “our” side.
The advisor.ca article brings up another area where CDN law has to be broken in order to comply with FATCA/IGA. The issue of trusts. Interesting that Mr. Berg would find the CRA guilty of lack of “right-mindedness.”
As a lawyer, I would expect Mr. Berg to respect the following arguments made by Peter Spiro:
http://opiniojuris.org/2014/05/08/sole-executive-agreements-next-roberts-court-chopping-block/
Article includes references to Allison’s point regarding the “dubious-ness” of IGA’s, always worth a re-read:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2280508
Don’t be surprised if Roy Berg brings up his suggestion that the CRA allow the cost of filing US taxes as a tax deductible expense. I have mixed feelings about this suggestion. Yes if Canada is going to act as facilitator of US law, NO as it provides support to CBT.
@Neill
I would write directly to the National Tax Advocate about your case. There is no down side to doing this.
Does anyone know if there is also a panel on Wednesday, May 14. The person I thought would be on the panel with me expects instead to be testfying on May 14. However, I have not been able to find anything about a meeting for May 14. Perhaps it will be posted later today.
Submissions:
http://www.parl.gc.ca/Content/HOC/Committee/412/FINA/WebDoc/WD6526468/412_FINA_C-31_Briefs%5CMoodysGartnerTaxLawLLP-Summary-e.pdf
and
http://www.parl.gc.ca/Content/HOC/Committee/412/FINA/WebDoc/WD6526468/412_FINA_C-31_Briefs%5CMoodysGartnerTaxLawLLP-e.pdf
@Publius
Not a clue… I didn’t even know there was a proper way to exit the US on a Green Card until some on this mb told me… I have residence cards for other countries… u leave… never been a problem.. Because they cared only about the tax on things I had in that country… just paid whatever I owed cause I never bother to close out things cause in some cases… after a yr or 2 I went back. When it expired, I re-applied for a new one.
With the GC I have to formally give it back & then I am taxed as a citizen giving up their citizenship. With an expired GC… u can’t legally live in the states but they sure as heck want the money in the country u are in & fines as u were still in the US.
To top it off… I can’t vote or have a say in the US… I am paying them to allow me to be a slave… To me… this is why I tell everyone… don’t do it… better in other countries… u don’t owe them your life savings with all these hidden laws & rules
@Blaze
I believe I answered about this on the other thread. As of now, nearly 5 pm, nothing is up on FINA site.
@All, Ian Russell admits that without an IGA there are privacy issues but otherwise he is likely rah rah sis boom bah;
http://fatca.thomsonreuters.com/wp-content/uploads/2012/09/USA-FATCA-Partners-agreement-would-limit-compliance-burdens.pdf
Georges score card;
Allison Christians, HOME RUN
Marc-André Pigeon, Probably Good
Roy Berg, BOO
Ian Russell, BOO
Arthur Cockfield, HOME RUN
Katie Walmsley, likely BOO
Lynne Swanson, HOME RUN (wear a lapel maple Leaf)
Max Reed, likely BOO
The wild card on the lawyers is if they are questioned on how difficult it is for Canadian Grandma in Nova Scotia to come into compliance with foreign laws of a country she never plans to step foot in.
@George
Lawyers will make out like a bandit on this issue… Max Reed who is a tax lawyer will be going… kerching… kerching… as the cash register adds up all the money it gets for all who need help with this… I did a quick search on Mr Reed… Seems to say… without IGA it will be crazy for the banks… I got a feeling he will testify on the for Fatca side rather then against. If u do a quick search… seems that only a few lawyers are against it… alot of them are selling their services to *help*… help me right over the cliff perhaps
@USPF, in the end it was either the banks getting f%$^& or John and Sallie Jones getting it.
The banksters and lawyers are getting everything they wanted and guess who is going into the meat grinders?
Someone needs to ask these lawyers on tape what it will cost to get Grandma in Nova Scotia compliant and renounced. The Canadian Government and every other that signed an IGA needs to create a Legal Aid or Citizens Aid Fund to handle this issue for its Citizens!!
If someone is an expat USA they need to get some other citizenship otherwise they are insane.
Those with clinging US need to either get a CLN or put together a very good file showing their relinquishment.
Oh and never ever set foot in that cess pool again.
@Neill, I presume you’re also living in the UK… how utterly horrid for you!!! I also had a very similar situation with many small accounts, ISAs, and PFIC issues. I was damn lucky that my accountant didn’t railroad me into OVDI. This is what’s so unfair about all this: the way it’s such a lottery who you end up with to help get you back into compliance; some are not even acting in their client best interests, which makes it even scarier… people are so vulnerable right now. This is where IBS is such a godsend.
Perhaps we can all try to contact various media (both national and in our own localities) to alert them to this particular meeting,.where both opponents and proponents of the most controversial part of Bill C 31 will be discussed.
@monalisa1776,
No. I live in the US. My wife earned money outside of the US in normal jobs, investing in normal accounts and normal funds for a UK citizen with zero ties to the US. She entered the US later.
We would have fared better had we earned the money (though less) in the US and snuck it out to avoid taxes.
@George
We are no longer citizens of their countries.. even if our butts were born in that country.. We are now known as US person who happen to be residents of that country… As 2nd class citizens.. we have no rights… no privacy… why don’t they save the time & publish our private data… share it with more people… we don’t count nor do others care. There is at least a few people in every single family in Canada with the taint… including bankers & politicians… There is no way its not possible since the borders are so close & we use to just cross back & forth with ease… Its not the unknon terrorists people should fear… it should be the known terrorists… the gov’t… we should all fear..
Hi Blaze,
Yes, there is a meeting on May 14. I just now had a reply to an email I sent to Murray Rankin. He wrote the letter to me on May 8 and says “I will be asking him [the Finance Minister] additional questions on Wednesday …” That would be May 14. I also saw the May 14 meeting mentioned elsewhere but I don’t remember where.
Professor Christians has posted notice of the next meeting and links to the last three meetings where Bill C-31 has been discussed. She has provided links to the minutes of the first two meetings for those who, like me, gave up on trying to download the video.
http://taxpol.blogspot.ca/2014/05/next-tuesday-appearance-at.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+TaxSocietyCulture+(Tax,+Society+%26amp;+Culture)
@ bubblebustin
Prof. Christians also wrote this at http://taxpol.blogspot.ca/
… Submissions are limited to five pages. I hope to make a submission soon, as the submission that I made with Prof. Cockfield is too long. But please read it anyway.
Thank goodness she will be doing a briefer brief for the committee as well as testifying. The brief will be terrific and so will her presentation I’m sure. Finally we are getting those who are in our corner onto the mat. Woohoo as our new CLNer Nomad33 would say. 🙂
What is the timeline exactly? When will we know if the amendment will be adopted or the bill is voted into law as is and we can start the charter challenge?
In preparation for this hearing, please read these papers by two of the presenters (free fulltext downloads available via the SSRN site).
This was an earlier submission by co-authors Christians, and Cockfield:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2407264
‘Submission to Finance Department on Implementation of FATCA in Canada’
Allison Christians
McGill University – Faculty of Law
Arthur J. Cockfield
Queen’s University – Faculty of Law
March 10, 2014
Abstract:
The United States enacted a tax reform in 2010 known as the Foreign Account Tax Compliance Act (FATCA), which will impose an extensive third-party monitoring and disclosure regime on financial institutions around the world in an effort to “smoke out” American tax cheats and expose their undeclared foreign assets to the U.S. Internal Revenue Service (IRS). The flow of information from Canadian financial institutions directly to the IRS that is required by FATCA would violate a number of laws in Canada. Accordingly, the United States has requested changes to these laws. The Canadian government now seeks to accommodate these requests in the form of an “intergovernmental agreement” (IGA) with the United States, which will be enacted into law as the Canada–United States Enhanced Tax Information Exchange Agreement Implementation Act (the Implementation Act) pursuant to a proposal released for comment by the Department of Finance. The Department of Finance invited public comments on these documents. We examined the proposed Implementation Act and the IGA and we find that they raise a number of serious issues ranging from likely constitutional violations to violations of international law. We submit these comments in the hope that they will help lawmakers and the public understand that FATCA, while intended to catch tax evaders, is poised instead to impose serious and unjustified harms on people who live around the world as non-resident U.S. citizens and green card holders, as well as their family members and business associates.
This study below, by Cockfield is the result of a grant from the Privacy Commissioner of Canada, but is not posted anywhere on the Commissioner’s site. The previous Privacy Commissioner funded the Cockfield paper via a grant to Prof. Arthur Cockfield of Queens University – fulltext of which was only posted at SSRN on May 6, 2014:
See,
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2433198
‘FATCA and the Erosion of Canadian Taxpayer Privacy’
Arthur J. Cockfield
Queen’s University – Faculty of Law
April 1, 2014
Report to the Office of the Privacy Commissioner of Canada, April 2014
Abstract:
In 2010, the United States enacted a tax reform known as the Foreign Account Tax Compliance Act (FATCA). Under FATCA, all non-U.S. financial institutions, including Canadian banks, must review their records to determine if any accounts are owned by “U.S. persons,” which include U.S. citizens residing abroad and individuals with significant social and/or economic ties with the United States. The United States threatened to economically sanction any foreign country that did cooperate with the new regime. Accordingly, Canada has agreed to implement FATCA via an intergovernmental agreement (IGA) with the United States; at this writing the implementing legislation, Bill C-31, is before Parliament. This report discusses how FATCA and the IGA unduly harm the privacy interests and rights of Canadians in part because detailed financial information concerning hundreds of thousands of Canadians would be transferred to a foreign government for the first time. Canada is getting nothing in return for this privacy giveaway other than the relief of the threatened economic sanctions. The Canadian government should not implement the IGA until these privacy concerns are addressed.
Note that this paper was not available on the Privacy Commissioner’s site. Why not?
There is no other result for the keyword search for FATCA on their site. Why not?
Why would the Privacy Commissioner’s office, who said that they were ‘following’ this issue not speak up when the IGA was signed, and has not highlighted the very significant privacy research that they thought important enough to fund with a grant?
Citation:
Cockfield, Arthur J., FATCA and the Erosion of Canadian Taxpayer Privacy (April 1, 2014). Report to the Office of the Privacy Commissioner of Canada, April 2014. Available at SSRN: http://ssrn.com/abstract=2433198
Can anyone provide a link to the live feed of the Senate Finance Committee hearing scheduled for today at 3:30pm?