“Anyone else getting the FATCA Call” (from MapleSandbox.ca)
Has anyone received the FATCA call from their bank, investment firm or other financial institution?
Johnnb posted the following under What’s New, but it definitely needs its own thread:
In a previous post I described how my wife and I decided to get our (backdated to 1973) CLNs. We applied in January of 2012 and the CLNs arrived in July 2012. We promptly made copies and gave one to our financial advisor at Scotia McLeod.
Last week we got a phone call from our financial advisor saying we now had to provide our old US social security number (haven’t got a clue what they were) and fill out a W8-BEN. Told her we weren’t filling out any US IRS forms ever again.
She then informed me that she has been instructed to call every person on her client list and ask each and every one of them five questions:
Are you a US citizen?
Were you born in the US?
Did you reside in the US for more than 183 days last year?
Two others that I missed because she was going so fast.
She said she was amazed to find so many of her clients who had ties to the US!
Anybody else getting this type of call?
We’ve missed you Johnnb. Good to see you back–but not with this information. Thanks for sharing.
Lynne commented and asked:
I think it’s important we remember this call was from Scotia McLeod, which is the investment arm of Scotia Bank.
For some reason, investment accounts are treated differently than bank accounts and many people have been asked the “US citizen” or “US person” question in the past on investment accounts even before FATCA. Like Hazy, I have never been able to understand why and no one has been able to explain it to me.
This, however, goes far beyond being asked to complete a form. This was a telephone call specifically to ask a long time customer the “US person“ questions. It is especially frightening that the call was from an organization that already had the CLN provided by the customer.
I have no idea if this is the first step towards banks asking all their customers that question or if it just one investment firm. Whatever it is, it’s alarming. Hazy, I really appreciate you checking it out with others.
Johnnb: What was the response of the Financial Advisor when you said you would not complete any IRS forms
@Lynne: I give her full marks. When I said I wasn’t going to fill out any IRS forms she said she’d get back to me and she did. Some stuff was moved to a TFSA and other stuff moved around and now no W8-BEN is required.
Don’t think this will work for many others. We are approaching the time when we have to move RRSPs to RRIFs and other investments are minimal.
Other comments on this post are at “Anyone else getting the FATCA Call” (from MapleSandbox.ca)
I really do not want to spend time here.
from page 60 of draft legilation
Under the Agreement, Canadian financial institutions are, under
certain circumstances, required to obtain self
-certifications to establish whether an account holder is a
U.S. person or to clarify the status of particular
entities. No forms have been prescribed for these purposes. While forms
issued by the IRS (such as the W-8 and W-9 series) may be used in
connection with establishing an account holder’s status, there is no
requirement to use them. (Some industry participants may rely on W
-8 forms to ensure that their clients can receive U.S. tax treaty benefits provided for
under the Convention between Canada and the United States with Respect to
Taxes on Income and on Capital.)
I had a previous discussion with KalC and I think we are both in agreement that you do not have to be tax compliant (8854) to be a non US person for Canada FFI. Is this your understanding KalC?
This is the get out of Jail clause
“9.29 If a financial institution wants to provide more instructions in connection with the question of where the individual resides for tax purposes, it may explain that a U.S. citizen is, in all cases, a U.S. person even if that individual also resides in Canada or another country. Non-U.S. citizens may take into account the application of any relevant tax convention in answering the question of where they reside for tax purposes.”
The USA treasury may still consider you an American for tax purposes even if you have not completed 8854 but Canada IGA says you are not a USA person for tax purposes when you get a CLN. Of course there is still that damn rule from the 1995 USA Canada tax treaty for collection of people who recently became Canadians.
I think the other two questions may have been similar to those asked by the banks in Switzerland
4. Do/did you possess a green card for longer than 6 years?
5 Do you have a signature authority over a bank account owned by a US person.
Thanks and oh-oh. 🙁
It’s all a moot point. America is on the edge of the precipice as 1st quarter big box numbers are in.
Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%
Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%
Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%
JC Penney Thrilled With Loss of Only $358 Million For the Quarter
Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%
Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%
Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores
Gap Income Drops 22% as Same Store Sales Fall
American Eagle Profits Tumble 86%, Will Close 150 Stores
Aeropostale Losses $77 Million as Sales Collapse by 12%
Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%
Macy’s Profit Flat as Comparable Store Sales decline by 1.4%
Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%
Urban Outfitters Earnings Collapse by 20% as Sales Stagnate
McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%
Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster
TJX Misses Earnings Expectations as Sales & Earnings Flat
Dick’s Misses Earnings Expectations as Golf Store Sales Plummet
Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%
Lowes Misses Earnings Expectations as Customer Traffic was Flat
RETAIL DEATH RATTLE GROWS LOUDER
Thanks, I thought I was really out of touch there.
The W8-BEN we had did not ask for a SSN, and it’s rather illogical to do so – after all the person is certifying they are NOT a USP. But then again sometimes logic is a bit hard to find.
Re place of birth the bank insisted on a passport as one of the forms of ID, which of course has your place of birth on it. Obviously not all banks will do this but as I mentioned this was private banking so I suppose they wanted to be sure of your bona fides… at an Australian bank I opened my (regular tiny) account with my drivers’ license.
W9 is filled out by US persons to receive dividends from US stocks without tax.
W8-BEN is for non-US persons so only basic 15% tax is deducted.
Without either form on file 30% is deducted from dividends.
The latest version of W-8BEN asks for both your non-US taxpayer id (box 6) and your US SSN (box 5) ‘if required’. The requirements seem fairly narrow and understandable — tax withholding exemption on withdrawals from an IRA or 401k, for example. Mostly it looks to be omit-able on the official IRS form. Banks doing a W-8BEN ‘equivalent’ may be going beyond this and asking for an SSN from anyone who has one, regardless of any nuanced legal requirement.
This link will take you to the HSBC PDF for it’s complete (roll over) FATCA compliance. Note that a US Citizen is defined as someone who has one or more parents who are US Citizens. Thus, it catches even those who may not know they are US Citizens or every acted as a US Citizen…..
fatca makes the Nuremberg laws look good
@Steve Klaus RE: HSBC PDF
Excellent find. HSBC has always appeared to be ahead of most other banks in dealing with information to their customers concerning FATCA. Their information, whether in this FATCA FAQ’s or their Terms and Conditions, all seem to be carefully well thought out and written. What may be of more importance than the 5 pages of explanations contained here are the obvious omissions. I refer to the following:
Item “6. What does HSBC have to do to comply with FATCA?
Conduct a review of new and existing customers
to identify those that are reportable under FATCA.
Report information to the IRS or local tax authority on
all accounts held directly or indirectly by US Persons.”
and item “14. What information will HSBC report to my local tax authority or the IRS?
The information reported to the IRS or to customer’s local
tax authority will depend on the FATCA classification
of the customer.” [emphasis mine]
What’s missing? Any reference to ‘thresholds’. Throughout the 5 pages I can find no reference to any thresholds for reporting.
Again, a carefully written document that says if you are a US Person, you will be reported. Period. My guess (and I emphasis this is only a guess!) is HSBC will only concentrate on accounts over $1,000,000 during the first ‘electronic search’ of their records of existing customers, and only on accounts of $50,000+ in later investigations. Nonetheless, they are playing very coy in what they are issuing in their information.
It would have been both simple and clearer to have made some reference to a fact that not all accounts are reportable. They didn’t do that. Curious.
Is HSBC issuing the above as information to their customers, or for the consumption of any US Government readers located in the US as to the banks (in all locations around the world) strict adherence to the FATCA rules?
@ Groucho – – My thought exactly!
HSBC is issuing letters as I understand it – depending on the country.
UBS Switzerland made it quite simple. They sent out a letter last year saying they would “no longer maintain existing portfolio assets in funds for clients who are US persons (persons with US domicile or US citizenship and/or holders of US Green Cards).” However, if you had cash only and were willing to sign a statement that you had filed your taxes with the IRS and that UBS could pass information about your account to the IRS, you could keep the account. UBS gave four months to return the statement to the client advisor and also told the client to look at the regulations which said UBS would immediately close the account of a US person if this process was not followed and the person was discovered to be a US person. I suspect they searched on the basis of birthplace when sending out the letter.
A friend whose family had accounts at a subsidiary of Credit Suisse for over 50 years was pushed into OVDI by CS as they had substantial amounts as some of the accounts were related to a business. Her only US indicia was birthplace. My friend was born in the US during WWII to non-US citizen parents and returned to Europe when she was 3. She has faulty English and never renewed her US passport after the age of 19. She received a letter from the bank telling her that as she was a US Person she was going to be reported to the IRS and suggesting she join OVDI. Unfortunately she did join OVDI and has paid more in taxes than penalties as the US did not recognize the “pauschalsteuer” she was paying on her income in Switzerland. She was in shock and then became angry and renounced last year. She said, “I never thought it would come to this.” So yes, the IRS was going after grandmothers, rich and poor.
By the way, the US embassy also asked her, “Why are you doing this now?” She was offended by that question, but told them the truth, that she did not need the citizenship and saw no reason to keep it.
@GeorgeIII , Shazam!!!
I finally get the head knocking you have been doing.
Per the terms of the IGA, a CLN is all that is required assuming that a bank is electing to cure indica problems.
But have you noticed that HSBC CA in its cutomer agreements goes beyond that and says US Person for tax purposes?
If you have a CLN but did not file a 8854, you are then still a US Person for tax purposes.
The compliance industry is the worse problem.
I have always thought that, when I get such a call, that I will tell the caller that my grandparents came out of Auschwitz and make sure that the caller got a full understanding of the identification work that they were now doing. If it happens inside a bank I intend to offer them to view my circumcision as proof.
Last I checked, there were no laws stating that it was against the law to lie about what religion you practice.
Make sure that any callers get an earful, and make sure that the person doing this job wants to put in their resignation.
I received the following in an email from the Kantonal bank in Switzerland where I banked until a year ago. It is important to note that this bank is in CH/US IGA as category 2:
Please send the following documents via fax or mail back:
– Certificate of Loss of Nationality ‘(CLN)
– FBAR forms from 01.01.2008 until delivery of U.S. citizenship
– Supplemented and signed U.S. Waiver
– Supplemented and signed reply form
Please note that we must the documents no later than June 4, 2014 in our records.
Here is the waiver they speak of:
I agree that Kantonalbank AG (the “Bank”) is authorized to provide this statement and supporting documentation to the U.S. Department of Justice or the U.S. Internal Revenue Service for purposes of the U.S. Department of Justice’s Program for Swiss Banks and, for this purpose, expressly release the Bank from its obligations under Swiss banking secrecy, the Swiss data protection regulations and other secrecy laws that would prohibit the provision of such information.
Printed name and address:
City / Date
I received this Monday:
– A phone call from my ex-banker
– A registered letter
– An Email demanding I give up my Swiss constitutional rights to this ex-bank so they can appease the IRS.
– After the CS judgment all the category 2 banks are pissing their pants.
– The Swiss have suffered a major defeat in the financial wars by the US. .
– Nobody cares about US expats when the SHTF.
– The IRS has managed to extort the entire Swiss banking system into becoming its tax enforcers.
– Many other western countries will follow suit
– The Swiss gold at the Fed is gone. Imagine the Swiss demanding an audit like the Germans and Austrians.
It’s finally here…Thanks for passing this on.