March 8, 2016 UPDATE: Legal fees paid — on to Federal Court for Charter trial contesting Canadian FATCA IGA legislation.
Canadians and International Supporters:
You came through once again: $594,970 for legal costs have now been donated and our outstanding legal bill is finally paid off.
Thanks especially to those who donated even though they never had any “spare” money to give, and despite this gave over and over and over again.
This last round of fundraising also shows that our Canadian lawsuit remains dependent on the kindness of our International Friends: There would be no lawsuit without their financial help.
Know that a very generous donation (today) from a supporter in the United States made it possible to pay off the remaining legal debt. Also please appreciate that there would be no lawsuit without the help of the Isaac Brock Society which has kindly let us use its website to solicit funds.
Our next step is the Constitutional-Charter trial in Federal Court.
For this we need more Canadian Witnesses, and my next post will be devoted only to a request for Witnesses willing to go public, like our Plaintiffs Ginny and Gwen.
For the future: I want a win in Federal Court — and I want the new Liberal Government not to appeal that win.
Thank you all for your support,
Stephen Kish,
for the Directors,
Alliance for the Defence of Canadian Sovereignty
@Badger, Thanks for the BC Lawyer item. If you know any memebrs you should get them to make a comment.
From the article; “BC lawyers who are US persons or who have partners or employees who are US persons must maintain client confidentiality when filing an FBAR.”
The problem with that statement is that when you file a FBAR you agree that the underlying records are open for inspection and that WILL divulge client confidentiality.
What am I getting at? Can a member of a qualifying legal organization even be a signatory on a firms escrow account if they are deemed to be a US Citizen?
This might be an area for Ginny our plaintiff lawyer from Windsor to explore. Is Ginny being harmed because it is now clear with the FATCA IGA that she can not be a signatory on a firm escrow account which is part of the job description of Joe Average Lawyer!!
Maybe @John Richardson could comment?
Does the Canada US FATCA IGA pierce the requirement for client confidentiality in Canada!!!
@George
Do mayors of cities have an interest in accounts or assets?
@Charl, I am aware of deemed US Persons in the EU that are involved in politics at the lowest political level and at least midway up the ladder who have removed themselves from the accounts where they were a signatory because of FINCEN FBAR concerns. This included small community “Mayors” in the EU.
The problem is not the basic filing of the form which is not that difficult except a mistake means its deemed not filed, but rather the agreement that the accounts listed on the Form are then open for inspection.
Lets assume Boris Johnson has his name on some accounts in London.
When he files his FBAR he is agreeing that those records are open for FINCEN audit.
Now would FINCIN conduct an audit? Probably not, but they can because Boris signed his name agreeing that.
Can you imagine the time and expense to the people/city of London of a full blown FINCEN audit of Transport for Londons financial accounts?
@George It would be a beautiful day if the local governing bodies would wake up to the fact that their nations have given FINCEN the potential to do this.
Is there a way to challenge FINCEN to actually go after those accounts? If they can go after individuals, banks and trusts etc then they have a mandate to go after governing entities. Might that hasten this mess to implode?
At the lower level they will most probably limit the responsibilities of anyone with a US taint. But in the case of higher level officials, as is the case of Mr. Johnson, as the laws now stand they must go after the City of London’s accounts. (Do they discern a difference between interest in accounts vs signing authority over accounts? Do mayors have signing authority even though this task is usually assigned to a financial officer for daily business?)
@Badger
…and the same applies for those with signing authority over a real estate broker’s trust account which holds deposits on real estate transaction. Clearly we are toxic!
Judging by the lack of comments, it appears we missed this Max Reed article in FP where he addressed the signing authority issue:
The FBAR tax plight: The maddening implications of when Uncle Sam deems you have signing authority
http://business.financialpost.com/personal-finance/taxes/uncle-sams-corner-max-reed-fbar
This article tells the story of how the Harper government found the justification for passing the FATCA IGA. A former lawyer for Canada’s Justice Department is suing the federal government over it’s view that if a proposed law has less than a 5% chance of passing charter muster it’s consistent with the Charter.
“Since the Justice Department formalized its “credible argument” interpretation of the law in 1993, there has not been a single instance in which the Justice Minister has advised Parliament that a law is not consistent with the Charter.”
http://www.theglobeandmail.com/news/national/lawyers-lawsuit-highlights-ottawas-court-clashes-over-charter-rights/article26449862/
I have just sent the following email. Feel free to use it in correspondence with your (ex. new Liberal) MP
or any other member of the new Liberal govt.
To: justin.trudeau@parl.gc.ca Cc: scott.brison@parl.gc.ca, Nathan.Cullen@NDP.ca, Murray.Rankin@parl.gc.ca, elizabeth.may@parl.gc.ca, thomas.mulcair@parl.gc.ca
Dear Prime Minister-designate Trudeau:
I wish to address the issue of the United States 2010 law Foreign Account Tax Compliance Act (“FATCA”) and how it potentially affects many thousands of Canadian citizens resident in Canada who possess some (often distant) degree of US origin.
As you may know, the United States feels that it has the right to tax any US citizen living and working anywhere in the world. This is commonly known as citizenship-based taxation (CBT) and is considered immoral and unjust. It is out of step with the rest of world, which practises residence-based taxation (RBT), whereby a country only taxes its residents. Only the African dictatorship of Eritrea, which has been condemned for human rights abuses, also practises CBT. The US has hypocritically criticized Eritrea at the United Nations for its “diaspora tax”.
Americans living in the US are effectively subject to RBT, but people deemed US citizens who live outside the US are still considered by the US government to have an obligation to file US tax returns and pay US taxes. This is essentially a US worldwide “place of birth” tax, and is unjust in more than one way:
i) The US designates people US citizens simply by place or birth (or by parents’ place of birth), whether these people consent to US citizenship or not. Many of these people are citizens (often from birth) of other countries and have no meaningful connection to the US (such as never having lived in the US or only having lived in the US as small children when their parents were temporarily studying or working there). The US (like Canada) practises birthright citizenship but (unlike Canada) does not allow easy and fair renunciation of US citizenship; there are onerous tax and financial barriers to renouncing US citizenship.
ii) It is a fundamental violation of international human rights for the US to tax residents of other countries on their income that is earned in their country of residence, who pay tax to their country of residence and who receive no services or benefits from the US. Nobody should have to pay taxes to a foreign country where they do not live or work. I am sure that the American politicians and government leaders who are leading their CBT campaign would never themselves consent to taxation by any foreign country!
US CBT was never previously enforced, which would require the co-operation of other countries. However now the US is trying to enforce their CBT with FATCA, which requires banks worldwide to report personal and private account balances of “US Persons” to the US Internal Revenue Service. The US has used its financial/capital markets clout to achieve this, by threatening a 30% penalty on US source income to any bank or financial institution that does not comply. This amounts to extortion.
Do not be fooled by the US rallying cry of catching tax evaders. FATCA is fine for US citizens living and earning income in the US who are hiding money in “offshore” accounts in tax havens such as the Cayman Islands. However, US CBT transforms FATCA from a just to an unjust law. Local Canadian accounts of Canadian citizens resident in Canada are not “offshore” – this is the definition of
absurdity.
As FATCA often breaks the privacy and anti-discrimination laws of other countries, the US has negotiated “IGA’s” (intergovernmental agreements) with many countries to override these laws. As you know, the previous Conservative government signed an IGA with the US in early 2014 and passed the IGA enabling legislation in the 2014 C-31 omnibus bill. This law violates sections 7, 8 and 15 of our Charter of Rights and Freedoms.
When this law was being debated by the Standing Committee on Finance in the House of Commons, there was a proposed amendment to exclude Canadian citizens or permanent residents who are resident in Canada from the FATCA IGA definition of a “US Person”. The Liberals (led by MP Scott Brison) and NDP (led by MP’s Nathan Cullen and Murray Rankin) voted for this amendment but it was defeated by the Conservative members. Elizabeth May and other Liberal and NDP MP’s have spoken eloquently against FATCA in the House of Commons. Ms. May’s Green Party promised to repeal the C-31 FATCA IGA enabling legislation in the recent election campaign.
Stephen Harper, for all his bluster about standing up to bullies, failed to stand up to the US bully. He failed to protect thousands of Canadian citizens from the unjust actions of the US. Stephen Harper failed to defend the sovereignty of Canada, allowing a foreign law to be enforced on Canadian citizens living in Canada. Canadian citizens designated as “US Persons” have been made second class citizens, their Charter and privacy rights violated.
This injustice needs to end. The C-31 FATCA IGA enabling legislation needs to be repealed or amended as described above. Canada needs to take a firm stand against the US with respect to FATCA. President Obama needs to be told that Canada will not allow her citizens to be treated in a discriminatory and unjust manner. The United States does not have a right to claim a tax filing “obligation” from any Canadian citizen or permanent resident who may possess some degree of US origin.
You have a chance to restore Canadian sovereignty and uphold the Canadian Charter of Rights and Freedoms. We understand that you and your new Liberal majority government have many important priorities, which we also personally support. However please do not neglect the FATCA issue. Many thousands of Canadians are affected by this and need your help.
Thank you for your attention to this important matter.
Yours sincerely, (used my and my wife’s real names)
Mr. A.: Thank you, thank you, thank you for sending your very comprehensive letter to Mr. Trudeau! You’ve helped to put our issue front and centre on his desk!
Yes, Mr A, very good letter. Thank you! I hope you’ve copied your own MP designate in emailing.
And thank you, of course, to the ADCS team for the requests you have made to Justin Trudeau. Mr. Trudeau now knows full well that the FATCA IGA *must* be a significant part of the house-cleaning that his government needs to undertake.
@ Mr. A
Thanks for your comprehensive and inspiring letter. Unfortunately, the Liberal candidate from my riding lost in a very close race with the Conservative. As we continue to have a Conservative MP in my riding, I am considering sending her this letter for educational purposes. What do you and others think about this?
@ Mr. A.
Excellent! Even though our Con MP was re-elected by a wide margin I’m going to send him a copy of your letter, with a preface, to let him know we are not going away and we are now appealing to the new PM to do the right thing re: FATCA … something the old PM refused to do. Thanks for the motivation.
@ Pat Canadian
Obviously my opinion is to send it.
Same here. Absolutely send it to Conservativve MPs. Thanks, Mr. (and Mrs.) A.
Excellent…let the Conservatives know we are not going away. Let them keep hearing from us.
@Bubblebustin, thanks for highlighting that FP article authored by Max Reed regarding the effect of the US extraterritorial FBAR demands as applied to non-personal workplace and voluntary roles;
One of the examples he gave would have in the (thankfully distant) past applied to me (before I learned that US extraterritorial FBAR even existed);
“…..Take another example. Jill is a U.S. citizen who serves on the board of a non-profit organization. Because she has the power to sign cheques on behalf of the organization, Jill would have to report the account on her FBAR form…..”
http://business.financialpost.com/personal-finance/taxes/uncle-sams-corner-max-reed-fbar
Not only have I been a past board member of a non-profit community organization with potential co-signatory powers, but I have been an employee of a small Canadian local non-profit with co-signatory powers. The US Fincen and IRS would have directed me to report the provincial grants and other funds being held in the community non-profit’s accts. simply because I was born in the US (and lived there for a very small fraction of my life, a half century ago) – and could have potentially levied FBAR penalties based on funds in accts that weren’t even mine and from which I could never have derived any personal benefit, and which were audited, reported and made public every year under layers of Canadian laws. Despite owing no taxes to the US, and having no personal financial interest in my Canadian employer’s and the voluntary organization’s accounts, the US would brand me a criminal for not having disclosed accounts funded and held in Canada – made up primarily of Province of Ontario grant funding paid to the workplace and community group to deliver direct services to Canadians in need.
This is one of the little known and little appreciated travesties of US extraterritorial CBT, FBAR and FATCA demands. I made a SAMS complaint to the IRS Taxpayer Advocate about it since it functions to effectively deprive those deemed “US taxable persons/citizens” outside the US from being eligible for employment and voluntary community roles in the non-US countries where we live – because it is highly unlikely that any potential employer and community organization board would agree to let an individual disclose that information to a foreign government.
After I found out about US extraterritorial CBT, FBAR and FATCA, I had to avoid taking on workplace or voluntary or community (or family) roles in which I might have an FBAR burden on top of my own pre-existing personal one. I had to refrain from co-signing on any of my Canadian spouse’s accounts or my Canadian child’s savings acct and registered education savings plan.
Yet more reason to formally rid myself of the US citizenship taint, and more reason to oppose US arrogance and persecution of those it claims as citizen-serfs.
Very good questions @George. After seeing that piece, I wondered what the other Canadian Bar associations made of the issue. And in the EU, and also in Commonwealth countries with similar legal structures.
@Mr A, a tip of the hat.
@Bubbles, that item on the charter…….head in my hand now shaking……
@All
If the irs wants audit the government accounts the mayor of London has signature authority over I would think that an audit of the government accounts can only be granted by a government auditor not someone with signature authority.
In other words the mayor could sign the form to allow an audit but he probably does not have the authority to grant an audit.
any comments
@Mr A
Would you mind if others copy your very well written letter and send it to their heads of governments? I would just switch where it says Canada for the name of my country. I think this letter should be sent to all countries prime ministers or presidents….it is very well written and easy to comprehend. Thanks for taking the time to write it.
Without the IGA protections, Canadian banks will face the 30% tax.
There is no IGA with Zimbabwe and a number of banks there are not registered with FATCA. They probably don’t have any holdings subject to the tax. The U.S. dollar is the official currency there, and even if they cannot do SWIFT transfers they can clear the cheques through the reserve Bank of Zimbabwe, which is exempt from FATCA as a governmental institution.
Now, if somebody donates money to the lawsuit, that money is gone from that person, but is the same person buys stock in a new bank that won’t comply with FATCA, there is the hope of making considerable money. Therefore, I expect it will be easier to raise the initial capital to open a small bank than it has been to raise the 600,000.00 CAD for the lawsuit. That one bank will grow and prosper without the expense of FATCA compliance.
“Norman is usually a good source of information but he made an error on this one.
The IRS instructions indicate that you are safe BUT the IRS instructions link you to FINCEN; a Government Entity ONLY includes Government Entities of the USA.”
George is right. Bee ware, if I’m quoting the IRS then I’m quoting unreliable information.
Here’s probably what George found:
https://www.fincen.gov/forms/files/FBAR%20Line%20Item%20Filing%20Instructions.pdf
“Governmental Entity. A foreign financial account of any governmental entity of the United States (as defined above) is not required to be reported by any person.”
Hmm, “the United States (as defined above)” makes trouble for American Samoans and maybe others.
“United States. For FBAR purposes, the United States includes the States, the District of Columbia, all United States territories and possessions (e.g., American Samoa, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, and the United States Virgin Islands), and the Indian lands as defined in the Indian Gaming Regulatory Act.”
The Fincen-document-United States is bigger than the 14th-amendment-United States.
“United States Person. United States person means United States citizens (including minor children); United States residents; entities, including but not limited to, […]”
That’s usually OK, since American Samoans and other 14th-amendment-nonpersons who are US non-citizen nationals don’t have to file US tax returns unless they have income from the US government or reside in the US by green card or whatever. But in this document United States was defined to include American Samoa. So a United States person seems to include a 14th-amendment-nonperson who is a Fincen-document-United States resident.
“Note. The federal tax treatment of an entity does not determine whether the entity has an FBAR filing requirement. For example, an entity that is disregarded for purposes of Title 26 of the United States Code must file an FBAR, if otherwise required to do so.”
So if an American Samoan has a New Zealand bank account, the person doesn’t have to pay US taxes but does have to file FBAR.
FBAR is not tax law, FBAR is not tax forms, FBAR is not combatting tax evasion, FBAR is all about penalties.
@2terrified2sleep
Absolutely, anyone can copy and use it as they wish.
@ Mr. A.
I did just that, accrediting you as Mr. and Mrs. ________ (names unknown). I’ll be sending my e-mail to our re-elected Con MP tomorrow. You put everything down so well that I only needed 4 short paragraphs as a preface. I also linked to the ADCS-ADSC press release and included a copy of the letter to Obama from the farmer’s wife, just one example of the personal hardships imposed by FATCA. Do you remember “There are 8 million stories in the naked city”? Well there are 8 million stories in the FATCA’d world too.
Has anyone found a list of email addresses for our newly elected Canadian MPs?
@ calgary411
Can we use the @parl.gc.ca address? Maybe I’ll have to hold my e-mail until parliament reconvenes.