Are you a Canadian citizen and resident and have you renounced U.S. citizenship and have paid or are subject to the U.S. Exit Tax (IRS 877A)? [No, I do not mean the $2350 fee.]
If so, we ask you to consider being a Witness in our Canadian FATCA IGA lawsuit.
You might have renounced U.S, citizenship but own, for example, a now valuable house (i.e., Canadian-made IRS asset eagerly waiting to be confiscated) in Toronto/Vancouver/London etc. and have (because interest rates are now very low) a very valuable IRS-asset-company pension (IRS wants percentage of cashed out total value of your CANADIAN pension)— and had/have to pay a U.S. exit tax.
From the Toronto Star: “In a sign that Toronto’s real estate market is off to a hot start this year, a home on Palmerston Ave. north of Bloor St. near Bathurst St., has sold for 62 per cent more than the sellers paid two years ago. The three-bedroom semi went for $1.375 million on Tuesday. In December 2014, it sold for a mere $851,750 — $523,250 less.
— The value in U.S. dollars of your CANADIAN house, plus CANADIAN company pension, plus a few CANADIAN investments, might put you into “covered” territory where you, a CANADIAN, will be be punished for your success.
Information on the exit tax and examples of the exit tax can be found at the citizenshipsolutions.ca site.
We are specifically seeking as a possible Witness in our Canadian FATCA IGA lawsuit a person who:
— Has renounced and has paid an exit tax (the ideal witness);
— Has renounced and will be subject to exit tax;
— Is intending to renounce and know that they will have to pay exit tax; and
— Cannot afford to renounce because they have no way of paying the exit tax
If interested, and perhaps a little bit feisty like our Plaintiffs and Witnesses, email me at: Stephen.Kish.Chair@adcs-adsc.ca Your name and situation will be made public in a submission to the Federal Court of Canada.
@Nononymous
The rules were changed dramatically in 2008, so for anyone who has lived in the US for more than eight or nine years these are not necessarily the rules agree to at all. An ultra-short notice unilateral change in “terms and conditions” for the worse, if you like, with no recourse to refuse. And a treaty-breaking one at that. Yes, accidentals can often fairly easily sidestep or ignore this nonsense, but residents and resident citizens cannot.
You seemed to take the stance that Neill shouldn’t be complaining. Perhaps you didn’t intend that, and I just misread your meaning. However, US residents — and particularly long-term green card holders — can now find themselves thoroughly shafted, in effect retroactively, by US tax laws. I’d say that entitles them to full-on victim status.
@Watcher
I’m sympathetic to Neill and others. There are doubtless grave injustices in how the US tax system is organized, the details of which I can thankfully remain ignorant of. But that is a much bigger fight than simply getting rid of the IGA so that us duals north of the border can return to happily ignoring US tax compliance.
@ Nononymous
When I moved to the US to live and work 30 yrs ago, the heart act and ‘covered expatriates’ did not exist. I worked hard in a stressful medical career but always intended to retire back ‘home’ until I found I was a financial prisoner of the US just like Neil. I was always cognisant of CBT and Fbars but that didn’t help me convince or maintain my bank account in Switzerland on my retirement or prevent me having to give away a good portion of my retirement funds to my US kids to avoid covered status and the double tax implications of that scenario.
NO ONE coming to the US could possibly expect to become a prisoner of the ‘freest country in the world’
NO ONE coming to the US could possibly expect to become a prisoner of the ‘freest country in the world’
Well said.
@Bubblebustin, re;
“So we are entitled to those higher yielding investments private banks offer, so much so that we are justified in lying to them in order to personally gain from them.”
‘Honesty is the best policy’ say the Banksters and FATCAnatics – teaching by example.
‘I do admire your willingness to expose yourself’
Your laugh for the day, Nononymous. My husband read your comment and is now calling me Lady Godiva. Thanks a heap 🙂
@Nononymous
>But at the end of the day, if you move to live and work in the US, with or without taking citizenship, those are the rules you have agreed to play by (perhaps unwittingly, but caveat emptor).
They actually added these rules after I became a green card holder. In fact I think they created my long term gc holder status in law since I already had the appropriate number of years,
Just because the banks and FATCAnatics abuse it, does it mean there’s now something wrong with honesty?
Look, people can do whatever they want with or without knowing the consequences. It just doesn’t make sense to me that people would want to keep their money with the enemy when they have alternatives, that is unless they can overlook the bank’s evilness for a good return on investment (rest assured that the bank’s making more money than you are on your money however).
@Bubblebustin,
Private banks? You mentioned this upthread in a discussion about Credit Unions. I’m not following you here (or I missed something), in that I don’t think it’s a matter of using private banks but using a run-of-the mill investment institution (the standard type where you can open an account with as little as $500), whereas “private banking is personalized financial and banking services that are traditionally offered to a bank’s wealthy high net worth individual (HNWI) clients (Investopedia).”
Credit Union members often use an investment institution in addition to their CU because CUs (the ones I’m familiar with or heard about anyway) don’t offer investments above the GIC level. While often a useful and sensible investment to have as part of one’s portfolio, with their very low rate of return, GICs are not a tool for building retirement savings, so you need another institution to be able to invest in mutual funds or stocks. Indeed, they are higher yielding than a GIC, but it’s pretty routine investing and I’d suspect that very few Credit Union members use private banks.
Credit unions (the one I know of anyway) are affiliated with an investment institution that you can use for your investing or you can of course choose any investment institution you want. In either case, even if the investment institution is affiliated, the investment institution will have you fill out their application. Although one’s credit union might not have a citizenship question on its application, it seems to be standard with investment institutions. But our readership is probably more likely to be dealing with the common-garden-variety type, not private banks.
@pacifica777
I guess I meant “private” in the respect that banks can choose their customers, and no one is entitled to the use of them.
A few observations on some of the comments in this thread:
On the idea that paying the exit tax is entirely voluntary for a Canadian – this is only true if all of your assets are in Canada. If you have assets in the US (say a 401(k) or IRA that you can’t touch until you’re older), then the US doesn’t need the cooperation of CRA to collect any exit tax.
On the Exit Tax – Australia also has an exit tax similar to Canada’s. When you cease to be a tax-resident of Australia you have a choice – pay capital gains tax on your current unrealised gains OR defer the tax until you sell the asset, at which time you pay tax to Australia on your entire realised gain, even the gain that accrued after you left Australia (Australian real property may be treated differently as most treaties would allow Australia to tax non-residents on real property gains where the property is located in Australia).
The US exit tax is, as others have said, much worse. At least with the Canadian and Australian versions, assets purchased after leaving the country are not included.
@Bubblebustin,
re;
““private” in the respect that banks can choose their customers, and no one is entitled to the use of them.”
Which is maybe one reason for the Access to Basic Banking Services Regulations http://laws-lois.justice.gc.ca/eng/regulations/SOR-2003-184/ under the Bank Act http://laws-lois.justice.gc.ca/eng/acts/B%2D1.01/ and some aspects of proposed changes to the Bank Act
http://www.airdberlis.com/Templates/Newsletters/newsletterFiles/20336/Federal%20Government%20Introduces%20and%20Then%20Withdraws%20a%20Consumer%20Protection%20Framework%20December%202016.pdf in order to make sure that despite banks being private, they must provide certain minimumservices under certain conditions, in the public interest.
Private banks should stop getting special access and sweet deals from our PUBLIC government. Ex. their being extraspecially apprised of the FATCA IGA talks with the US, which ordinary Canadians ‘the public’ were deliberately kept in the dark about. We the public had to read about it by accidently seeing the obscure notice from Finance on the Gov. of Canada website. And those ‘private’ bankers have special access to the ear of public governments while the public, us, fight to be heard. How many times do you read that the government is being advised by bankers. Ex.
http://www.macleans.ca/politics/ottawa/the-inner-circle-inside-trudeaus-economic-advisory-team/ https://www.bloomberg.com/news/articles/2014-12-15/trudeau-turns-to-td-and-blackberry-for-economic-advice
And that’s in addition to very actively lobbying ex. https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/advSrch;jsessionid=ju8NXUQg74TTaAWaxQ-7b4Wh.app-ocl-01?mod=1
Ex. of advantages enjoyed by private banksters, see the COMER case which is still being fought by COMER and Rocco Galati and is bound for the Supreme Court;
http://www.comer.org/content/FederalCourt_7Dec16.htm
https://thetyee.ca/Opinion/2015/04/17/Liberate-Bank-of-Canada/
“…instead of the Canadian government borrowing money from its own bank, our bank — the Bank of Canada — it has, since 1974 chosen instead to borrow exclusively from private international and domestic financial institutions providing them with enormous, absolutely risk free profits for almost four decades……”…………..
…………………….
“…In 1974, Canada immediately stopped borrowing from the Bank of Canada, launching the country on a deficit accumulation path that in 2012 saw interest payments to private lenders top $1 trillion. Fast forward to the present and the lawsuit, which seeks to “restore the use of the Bank of Canada to its original purpose, by exercising its public statutory duty and responsibility. That purpose includes making interest free loans to the municipal, provincial, and federal governments for ‘human capital’ expenditures (education health, other social services) and/or infrastructure expenditures.”..”
See also;
https://ecocidealert.com/?tag=bank-of-canada
https://watershedsentinel.ca/articles/comer-lawsuit-proceed-supreme-court-canada/
I myself don’t invest with the private Banksters, except for a small RRSP – which is only still with them since they want to stiff me with a huge fee for transferring out. The proportion of the size of the fee to the principle in my opinion is confiscation if not a type of usury. Certainly the reason for the fee is to discourage consumers from moving their RRSPs and RRIFS elsewhere and keep them locked in.
Ex.
Registered Retirement Savings Plans – Includes locked-in RRSPs
Daily Interest Savings Account
Full or partial transfer to a financial institution, other than the Canadian Iniquitous Bankster Confiscators
$100.00 per transfer of funds
Guaranteed Investment Certificates (Redeemable and Non-Redeemable)
Transfer to a financial institution, other than the Canadian Iniquitous Bankster Confiscators
$100.00 per transfer of funds
You can be certain that the Banksters urged the gLIBs to take up the CON defense of the FATCA IGA legislation against us – assuring that all Canadian taxpayers would not only shoulder the cost of the legal defense against the ADCS lawsuit, but also fund the CRA and other government costs to implement and comply with FATCA forever and ever, and shield the Banksters from risk and from as much of the implementation costs as possible. Leaving the Banksters free to continue to expand into the US markets.
Can we elevate ‘honesty’ over financial survival and security if Canadian citizens and residents with the US taint cannot invest or keep their investments, or potentially prosper by saving and investing the same as other Canadians are able to? I’m not going to condemn people who do not out themselves in instances where the US indicia hunt is for the sole purposes of assisting Canadian banks to administer the foreign US FATCA. Is it dishonest if the IGA is unconstitutional and offends Charter and constitutional and privacy rights?
@Watcher makes the point that:
@Karen notes that:
With respect the comments that compare the U.S. “Exit Tax” with “Departure Taxes” levied by other countries confuse the issue.
The “departure tax” imposed by Canada is a tax imposed based on a change in “residence”. The U.S. S. 877A Exit Tax is a tax imposed based on a change in “citizenship” in the case of “citizens” and a change in “immigration status” when applied to Green Card holders.
In the case of “Green Card Holders” the U.S “Exit Tax” (provided that it is applied when the Green Card Holder BOTH moves from the USA and surrenders the Green Card at the same time) is somewhat like the Canadian departure tax. It does however apply to more items and it applies to items that have no connection to the United States.
In the case of U.S. citizens, the U.S. Exit Tax is in NO way connected to residence in the United States. It does NOT apply at the time the a U.S. citizen moves from the United States. It applies at the time that they decide that they do NOT want to be a U.S. citizen and renounce U.S. citizenship. This means that it mainly applies to assets (both capital assets and pensions) that have no connection whatsoever to the United States. To put it simply the way the U.S. Exit Tax rules operate is that the United States uses it as a a mechanism to (in effect) confiscate the non-U.S. assets.
In addition, as @Neill, @Heidi and others have noted the confiscation is RETROACTIVE confiscation. In other words, the law appeared in 2008 (so NO Neill did NOT agree to this by moving to the USA) trapping assets that existed at that time. As @Heidi puts it:
Wrong, the simple fact is that there are many Green Card Holders who are now “in prison in America”.
Furthermore, as some comments have noted the application of the S. 877A rules has the practical effect of subjecting those assets to double taxation. And as @Watcher notes, there is NO realization event to pay the Exit Tax.
@Watcher concludes with:
The U.S. is NOT the only country that imposes taxation when one breaks “tax jurisdiction” with a country. But, because all other countries use “residence based taxation”, the U.S. IS the only country that has an Exit Tax based on a change in personal characteristic “citizenship or immigration status”. The pure evil of the Exit Tax flows from the pure evil of a system of citizenship-based taxation. Because there is NO other country that uses citizenship-based taxation, there is no other country that can have an “Exit Tax” that is based on a change in citizenship.
Therefore:
On the one hand to compare the Canadian Departure Tax to the U.S. Exit Tax is an incorrect comparison; and
On the other hand, (since many commenters seem to be making the comparison), some thoughts on the suggestion the U.S. Exit Tax is the worst.
When the U.S. S. 877A Exit Tax is compared to Exit Taxes imposed by current and past regimes, it is clear that the U.S. Exit is by far the worst by today’s standards.
But, the U.S. Exit Tax is also by far the worst by historical standards. The Exit Taxes imposed by the nastiest regimes in history (say during the World War II era) made NO attempt to confiscate assets acquired after the person left the country. As @Karen put its:
So, yes there is NO doubt that the U.S. 877A Exit Tax is the nastiest in history.
@Nononymous the S. 877A Exit Tax is unjust whether one complies or not, whether it is paid or not and whether one “feels the injustice” or not. The fact that an accidental American ignores the issue, is completely irrelevant to the injustice of the tax.
I think a very important aspect of the US exit tax is that even the person who put together the legislation (Schummer) really considers you some kind of traitor if you actually take his terrible deal. Which is quite amazing if you think about it. It’s a few politicians goals to try and retro-actively punish those that have already exited via sec 877A.
REPEATING REQUEST FOR CANADIAN “EXIT TAX” WITNESS:
Are you a Canadian citizen and resident and have you renounced U.S. citizenship and have paid or are subject to the U.S. Exit Tax (IRS 877A)? [No, I do not mean the $2350 fee.]
If so, we ask you to consider being a Witness in our Canadian FATCA IGA lawsuit.
You might have renounced U.S, citizenship but own, for example, a now valuable house (i.e., Canadian-made IRS asset eagerly waiting to be confiscated) in Toronto/Vancouver/London etc. and have (because interest rates are now very low) a very valuable IRS-asset-company pension (IRS wants percentage of cashed out total value of your CANADIAN pension)— and had/have to pay a U.S. exit tax.
— The value in U.S. dollars of your CANADIAN house, plus CANADIAN company pension, plus a few CANADIAN investments, might put you into “covered” territory where you, a CANADIAN, will be be punished for your success.
Information on the exit tax and examples of the exit tax can be found at the citizenshipsolutions.ca site.
If interested, and perhaps a little bit feisty like our Plaintiffs and Witnesses, email me at: Stephen.Kish.Chair@adcs-adsc.ca Your name and situation will be made public in a submission to the Federal Court of Canada.
Concerning the calculation of the Exit Tax for covered expatriates:
In April of 2015, John Richardson most kindly included on his site some examples of calculations for a theoretical filer of 8854 who was subject to the Exit Tax (a covered expatriate), and also subject to calculation of capital gains. According to John, the examples were prepared by “a licensed U.S. CPA who specializes in International Tax”. At the time, John warned that in the calculation for a personal residence, and the claim of an exemption for capital gains (Form 8948 and Schedule D), it was uncertain if the normal exclusion ($250,000) was allowed on the sale of a qualifying personal residence. I do remember investigating this at the time, and John was quite correct, there were no references in IRS publications. The CPA concerned had included the $250,000 exclusion in their calculations.
http://www.citizenshipsolutions.ca/2015/04/05/part-5-the-exit-tax-in-action-five-actual-scenarios-with-5-actual-completed-u-s-tax-returns/
A look at the most recent “Publication 523, Selling your Home”, now includes the following:
Under “Eligibility Test”, is the following:
[I]”You can exclude up to $250,000 of gain ($500,000 if married filing jointly) on the sale of your home if you meet the eligibility test.”[/I]
Further, under “Eligibility Step 1—Automatic Disqualification”, is the following:
[I]”Determine whether any of the automatic disqualifications apply. Your home sale isn’t eligible for the exclusion if ANY of the following are true.
•You are subject to expatriate tax. For more information about expatriate tax, see chapter 4 of Pub. 519, U.S. Tax Guide for Aliens.”[/I]
https://www.irs.gov/publications/p523/ar02.html
There is no date displayed on the publication as to when it was last updated.
It now appears that a covered expatriate subject to filing Form 8854 will lose the exemption and the full home value must now be used for calculations. Let’s hope that home isn’t on Palmerston Ave., north of Bloor St. near Bathurst St., in Toronto.
If anyone knows if the above is inaccurate, please correct us.
Boris Johnson. Fits the first criteria perfectly.
Probably a little busy these days, but might still be worth giving him a ring.
Except for *Canadian*.
Boris was a dual from birth so that ‘covered’ status and exit tax would not apply to him as long as he caught up with filing 5 yrs of back tax filing, taxes due, fbars and filed 8854 before renouncing….and who knows if he has even renounced, his name has not appeared on the ‘list’.
“There is no date displayed on the publication as to when it was last updated.”
Says Jan 28 2016, LH bottom corner of the first page. I assume that’s the revision date – it doesn’t actually say so.
https://www.irs.gov/pub/irs-pdf/p519.pdf
@heidi
True, I conflated paying the capital gains he owed on the house sale – the source of his public complaints – with the exit tax.
@iota
Sorry, I wasn’t clear. I was referring to Pub. 523, not 519.
I’ve followed your lead and looked at the pdf version. The above is the HTML version. For the pdf version the date in the lower left hand corner of the first page is Jan 17, 2017. It notes it’s for 2016 returns. The automatic disqualification for covered expatriates in the pdf version is on page 3.
https://www.irs.gov/pub/irs-pdf/p523.pdf
Oh yes, looking again at your post I see where I misread it. My apologies.
Need inspiration or motivation to support or become a witness for the ADCS lawsuit?
From Maple Sandbox, Lynne posted this;
http://maplesandbox.ca/2017/is-u-s-treasury-secretary-a-real-tax-cheat/
‘Steven Mnuchin, Treasury Nominee, Failed to Disclose $100 Million in Assets’
“…Steven T. Mnuchin, President-elect Donald J. Trump’s pick to be Treasury secretary, failed to disclose nearly $100 million of his assets on Senate Finance Committee disclosure documents and forgot to mention his role as a director of an investment fund located in a tax haven, an omission that Democrats said made him unfit to serve in one of the government’s most important positions.
The revelation came hours before Mr. Mnuchin, a former Goldman Sachs banker, began testifying on Thursday before the Senate Finance Committee,..”…..
Continues the trend of choosing Treasury secretaries who for all their lauded qualifications and homeland USA resident status can’t figure out how to declare and pay their ‘fair share’, while administering US extraterritorial laws to force people who are ALREADY paying tax to the country they actually live in to report and potentially pay another layer of taxes and penalties to the US – a country which they have NO meaningful economic connection with.
And its no chump change. Nothing like the legal local Registered Disability Savings plan interest, disability benefits and education savings plans the IRS insists Canadian children and others owe US extraterritorial tax and reporting on.
Its like deja vu all over again……….
— MAYBE THERE IS A CANADIAN WILLING TO BE AN “EXIT TAX” WITNESS, BUT THAT PERSON DOES NOT READ BROCK. MAYBE YOU KNOW SUCH A PERSON. IF SO, WHY DON’T YOU PASS ON MY REQUEST?
SOON THE DOOR TO NEW WITNESSES WILL CLOSE.
MY REQUEST:
Are you a Canadian citizen and resident and have you renounced U.S. citizenship and have paid or are subject to the U.S. Exit Tax (IRS 877A)? [No, I do not mean the $2350 fee.]
If so, we ask you to consider being a Witness in our Canadian FATCA IGA lawsuit.
You might have renounced U.S, citizenship but own, for example, a now valuable house (i.e., Canadian-made IRS asset eagerly waiting to be confiscated) in Toronto/Vancouver/London etc. and have (because interest rates are now very low) a very valuable IRS-asset-company pension (IRS wants percentage of cashed out total value of your CANADIAN pension)— and had/have to pay a U.S. exit tax.
— The value in U.S. dollars of your CANADIAN house, plus CANADIAN company pension, plus a few CANADIAN investments, might put you into “covered” territory where you, a CANADIAN, will be be punished for your success.
Information on the exit tax and examples of the exit tax can be found at the citizenshipsolutions.ca site.
If interested, and perhaps a little bit feisty like our Plaintiffs and Witnesses, email me at: Stephen.Kish.Chair@adcs-adsc.ca Your name and situation will be made public in a submission to the Federal Court of Canada.