Watch John Richardson on BNN Here
BNN – Business Day AM 11:00 am ET
FATCA: What you need to know
Lawyer John Richardson discusses new tax legislation taking effect
July 1, that will impact a million US citizens currently living in Canada
Also see John Richardson on Independent Nation: Monday, June 30 – 8:00 PM Live Streamed Online
“The Night Before FATCA” (with Peter Dunn and Tricia Moon)
See Video HERE
It seems dot me that he was trying to mask his hostility towards FATCA- did anybody else feel that too. And I also listened intently when he said that the definition of “US persons” would be enlarged with time. He forgot to mention the kids of US citizens even if they were born in Toronto.
BTW- just talked to a financial manager in Switzerland today, and he said they had effectively gotten rid of all their US clients.
Interesting major investment decisions the US has missed out on. Mercedes has recently announced they’re building a new factory in Mexico. Oddly enough BMW will announce on 3 July they intended to build their own as well.
BMW only decided to expand the production capacity in SC rather than build another US factory.
Yes labour costs in Mexico as very low, however, did FATCA factor in to BMW and Mercedes decision making?
These manufacturers limit their exposure to FATCA by treating the US as a market to only ‘sell into’ rather then produce in.
Providing the Mexican production will be sold in USD, all those dollars coming from Canada, Central America, and South America are not at risk of the 30% FATCA sanction tax and the USG regulatory BS along with it.
John pretty much covered it without having to get into minutiae. He was pretty on.
Great interview. Thanks!
@Polly and @Bubble, I got the impression that he thought wiser to keep it simple rather than confusing people. And as an attorney, I’m sure that part of how he makes his living is by charging clients for legal advice on how to deal with FATCA. He has been exceptionally generous to give us a lot of information that he would probably charge for.
@Everybody: John was great, hit all the important notes, but his laid back demeanor deflects panic in the facts and details which could easily slide over anyone just learning of this today.
@Don: It seems to me that Mercedes and BMW deciding to build their plants in Mexico ignores two things ( but they could know something we don’t!)
First: If they hire even ONE US citizen, they are going to be under FATCA reporting.
Two: With NAFTA implementation and OECD tax regime coming in Sept along with NAFTA, will it matter WHERE their plants are in North America?
And: A question I have: If they are successful in ‘taking down the US’ in preparation of NAFTA implementation and Canadian and Mexican borders disappear, currency in CDN dollars and Mexican Peso are then quantified into WHAT? A ‘North American Currency? And sovereignty for all three countries? Non existent?
We know we are being screwed and have to find the screwdriver!
@Furious: I agree– his demeanour was professional. His responses were calm and measured. From a PR/communications standpoint, he did a fantastic job. Most reasonable Canadian viewers, I believe, would find the facts alone disturbing. This is a great interview to forward to friends, family, colleagues, politicians, and sympathetic journalists. Great interview John!
“1) The taxes are not worth the value being returned.
I don’t have a problem paying taxes, so long as they go to something worthwhile. I will end up paying around 33% – an entire 1/3rd of my income – in my 2013 tax return. Yes, I am getting a refund, but when I am paying tens of thousands of dollars and not getting the services I should receive for that investment in my country, celebrating the return of a few hundred dollars seems absurd.
Where is my benefit from my government for all of this? Do I have free healthcare? No. Do I have a world class education for my child? No. Do I have any kind of guaranteed income should I lose my job? No.
No, instead, I have a country which is the only one in the world to tax its overseas citizens. A country that bails out banks who prey on those who just want a home to raise a family when they become insolvent – but when it happens to me, and I short sell my home, the IRS is there, ready to tax me on “phantom income” – forgiven debt.
I have a country that spends billions on fighting wars for political gain, but does nothing when there actually is evidence of WMD use against others. A country that hemorrhages so much money on military spending, it must turn around and take loans against my child’s future – her income – in order to continue to pay for programs we don’t need.
2) I’m tired of people being surprised that I’m American because I have manners, common courtesy, and the ability to see the other side of issues.
Seriously, the number of people I meet who think Americans are rascal-riding land whales (like in the movie Wall-E) with handle-bar mounted machine guns, a sack of Big Macs in the front basket, a clinical addiction to NASCAR, and a passion for the modern day artist that is Jerry Springer – it’s just too much. I’ve been introducing myself as Canadian because apparently I’m so polite, that’s where they mostly assume I’m from.
3) The fact that none of this is ever going to change, regardless of what party is in charge, and the fact that the American government continues to shred the constitution a little more each year, until it doesn’t even matter anymore.
You may not think of America as a police state, but it is. Nobody’s going to come grab you in the middle of the night, unless you’re reported as a terrorist of some kind. At that point, just forget about “police work” and get ready for the SWAT team.
Nobody is going to take your children way from you, unless Child Protective Services is called, and someone decides – for whatever reason – that it’s “in the child’s best interest” to be removed.
Nobody is ever going to interfere with your access to medicine, unless you’re trying to get something that isn’t ridiculously expensive from another country; in that case, get ready for being charged as a drug trafficker.
Nobody is going to freeze your bank accounts, passport, and other means of movement, unless the IRS believes you haven’t given them enough money. Suddenly you have debt to prove isn’t there, and it will all get “sorted out” at the blistering fast speed of government efficiency. Or you could just pay the amount they say and it all ends quickly.
4) The fact that the future for my child in the US is so dark.
All this debt, and it’s going to fall on her and her children. She’s broke, and she doesn’t even know it yet. Disgusting.
Well, I count myself fortunate that I don’t own a home in the US – it affords me the ability to even consider leaving it all behind. There’s so much propaganda about how wonderful America is but, when you look at it without those rosy lenses on, what you really see is horrifying.”
Second interview covered a lot about people needing to shed citizenship and I have my own situation to ask your take on. I could apply now for renunciation while slightly being under “covered expat” status BUT I fear doing so now may result in all manner of investigations.
A few weeks ago in Spain I had my US PP stolen (briefcase) and the embassy only issued me a 1-year validity one requiring I apply again so State can do more checking. That is because 7 years ago I had the US PP lost/stolen. If I now apply to shed nationality (dual/C born) might that set of alarms. I travel on C PP but with one day in US on way back had to also carry the US one. Seeing on the new PP app I now live in C I wonder if they would be concerned about taxation as well. Your thoughts please?
@arctic raven – If you download the current US PP Application form, I believe it asks for your SS number and if you refuse they charge you some high fee.
The SS number is passed on to the IRS and other application data (also to Homeland Security as well).
There was something in the current law that stopped them from mandating you to give your SS number so they’ve made it expensive for those who won’t comply.
At the end of the day, it’s saving the USG from having to match up data manually.
So in effect it’s already being done. As for raising the alarm, as renunciations uptick it’ll become business as usual for the USG unless something changes.
Polly: I think John’s hostility to FATCA came forth in every sentence he spoke. The content of his answers would largely have been determined by the questions the interviewer asked. It would have been impossible to cover everything that needed to be said in such a short time. I think this is another video that we should all spread about as much as possible!
Just had a thought. Could FATCA be a possible profit opportunity for dual citizens until this issue is resolved?
All duals should take time and walk into a bank or brokerage to open up a ‘new’ account.
Banks are going to be stuck between a rock and a hard place. To mitigate risk of data protection, it’s unlikely they’re going to send all customer’s data to the local tax authority. Somewhere along the line they’re going to have to ‘discriminate’ the data for dual citizens.
Everyone should look at this option and research it from the bank’s point of view. Is there compensation available for customers that have been discriminated against? If there’s a low cost (perhaps small claims court or some ombudsman) to bring the bank to book to possibly get a nice little payout for being discriminated against.
It’s worth looking into this matter for a number of reasons:
It may be a nice little earner if you have dozens for these cases on the go at once.
It punishes the banks and other FFIs who may in turn start to lobby the Government.
It will create publicity against FATCA (remember in the UK how everyone jumped on the suing the banks for previous bank charges bandwagon). Everyone likes a get rich scheme for doing very little work.
Legal settlements are ironically tax free (even in the US).
Just think you take a Saturday afternoon and visit banks trying to open a ‘new’ account with the intention to suing the bank for discrimination.
Yes the banks will see it as a cost of doing business, but it will create some pressure to resolve the situation with dual citizens.
It makes FATCA more expensive to manage if FFIs keep having to pay compensation claims.
Someone should do research in each IGA country to see if any of this is possible. That’s what I’m going to do.
Don, here is some info on passport renewals re ss numbers. I believe it’s still current (emphasis mine):
“Do I have to provide my Social Security Number? (Top)
Section 6039E of the Internal Revenue Code (26 U.S.C. 6039E) requires you to provide your Social Security Number (SSN), IF YOU HAVE ONE, when you apply for a U.S. passport or renewal of a U.S. passport. Failure to provide your Social Security Number may result in significant processing delays and/or the denial of your application.
If you have not been issued a SSN, enter zeros in box #5 of the passport application form you are completing.
Contact the Social Security Administration to request a Number. If you are residing abroad, you must also provide the name of the foreign country in which you are residing. The U.S. Department of State must provide your SSN and foreign residence information to the Department of Treasury. If you fail to provide the information, you are subject to a $500 penalty enforced by the IRS. All questions on this matter should be directed to the nearest IRS office.”
This is not the Canada that I was born in.
The Canada I remember, was one of Pierre Elliot Trudeau. The very same who stated: “We must now establish the basic principles, the basic values and beliefs which hold us together as Canadians so that beyond our regional loyalties there is a way of life and a system of values which make us proud of the country that has given us such freedom and such immeasurable joy.” when he signed the Charter of Human Rights and Freedoms in 1981. Back then we were so proud that we had a Charter of Human Rights and Freedoms to aspire to. That at the very age of eleven, I looked on believing Canada to be the land of the just and upholder of human decency. We were proud of being Canadians; the first to put together such a proclaimed charter that the Queen herself had given Royal Assent and personally signed in a ceremony on Parliament Hill. We truly believed that Canada was at the forefront of civilized nations.
Yet…here I stand not 33 years later angered and bitter at the fact that Canada, under Prime Minister Stephen Harper has signed away those very rights and freedoms that were enshrined to us under the Charter of Human Rights and Freedoms by passing an omnibus bill that contained a United States law called the Foreign Account Tax Compliance Act (FATCA). That over 1 million Canadians with clinging US indicies were painted as US persons – as delinquent US taxpayers no matter how long they were living in Canada or whether they were born in Canada. With that flourish of a pen and with the passing of the vote in which not one governing party MP deigned to vote against, Canada surrendered its sovereignty to the United States. For such is the foul taint of United States citizenship that anyone who is even the slightest bit connected to any person with clinging US indicies in question is labelled a US person (of interest) to the Internal Revenue Service.
I stand here today a jaded 44 year old who trusts his government much less than that innocent 11 year old of years past. Knowing just how much his government has betrayed his family and his loved ones has brought him to that point. My mother was interned in Slocan during WWII, a Japanese-Canadian born and raised in Vancouver, British Columbia when the Japanese of her father’s homeland bombed Pearl Harbor. Mackenzie King was the architect of that internment and violation of Human Rights. He was also a Liberal, which made me swear that I would never vote Liberal for the rest of my life. The only party that stood up to his violation was the CCF (Co-Operative Commonwealth Federation). The Progressive Conservatives righted the Liberal wrong by making restitution to the Japanese-Canadians for forcibly being removed from their homes and their possessions taken and sold. And that was what prompted me to support the Progressive Conservatives when I began to vote. I realize now that government is for sale to the highest bidder with the betrayal of Canadians to the United States. That we, as Canadians if we are not to see our sovereign nation’s rights ceded to a foreign nation, we must stand on guard and protect our sovereignty, under arms if we must.
The blatant subornation of a certain segment of population by the Progressive Conservative government should not pass without reprisal. The US government has labelled those with clinging US indices tax cheats and have thrown the full weight of the IRS at those who they claim “flout their laws” and the Canadian government is a willing accomplice. The Canadian government should be brought to task for the criminalization of the segment of Canadians and all Canadians should be outraged that their citizenship and our nation’s sovereignty should be valued so cheaply. This law does not affect just those with clinging US person-hood, but it affects all of us. We will be forced to pay out of pocket for the rising costs of the bank compliance through higher fees, intrusive interrogation when opening a bank account that normally would be cause for a Human Rights complaint, but because of a flourish of a pen, is made legal to ask. One by one our rights are being eroded and instead of being enraged for the further erosion of this once-great country, we are complying with a whimper. Trudeau would ask about the location of our spine.
The acts of our government would indicate that we have none.
Wow, the Animal, you are as exceptional with the written word as you are with graphic arts. Well said.
Shame on the Canadian media for not warning all Canadians of the impending attack. Laura Secord’s rolling in her grave.
Don. In the UK, the Equality Act (2010) covers all residents, so one need not be a dual citizen to adopt your wheeze. Discrimination on grounds of nationality is prohibited and covers all residents.
Unfortunately, Section 33 of the Act says that the Act can be ignored if it is necessary to so in order to comply with some other law. This is how banks (and NS&I in the UK) are justifying their breach of the Equalities Act. They say that UK laws that have been passed to implement FATCA override it.
However, this might be open to challenge. HMG has boasted of the concessions it has won in the UK-US IGA. The IGA provides means by which banks can comply with both FATCA and the Equality Act. So banks are being disingenuous. The problem for the banks is that it is more expensive to comply with the Equality Act. But is cost of compliance a valid excuse for ignoring a UK law with which it is possible to comply?
An I ain’t dun gone to post-sekundairy needer. ~wink~ LOL.
A quick amendment to my post at my blog at: http://bit.ly/TDdOB4
I’ve added links for Isaac Brock and Maple Sandbox as well as a link to the Donate page of the Charter Challenge.
Your post would make a fabulous letter to the editors if Canada’s largest newspapers or your local community ones
The Independent Nation interview (John, Tricia and Peter) has now been listed in the archives of That Channel:
And here’s the youtube link:
Outstanding! Really well done.
Not easy to compress all that info into 7 minutes or so.
Plus the tone was perfect.
Two thumbs up….
Pingback: The Isaac Brock Society | Looking back, the day after the demise of Sovereign Canada — “This is not the Canada I grew up in.”