Tim just provided to me these Canada Revenue Agency (CRA) documents (some last modified 3/22/2017) on implementation of the new Common Reporting Standard (CRS). You can imagine how the Government will use this in FATCA litigation.
Please look through these documents and their links. Anything unexpected?:
“…The automatic exchange of financial account information with the United States (U.S.) exists under the Canada-U.S. intergovernmental agreement for the Enhanced Exchange of Financial Account Information with respect to taxes signed on February 5, 2014.
Canada’s automatic exchange of financial account information arrangements with jurisdictions other than the U.S. has been implemented in accordance with the Common Reporting Standard (CRS). The implementation of the CRS legislation is effective July 1, 2017.” See link.
“…Under the CRS, financial institutions must take steps to identify certain accounts held by, or for the benefit of, non-residents and to report such accounts to the Canada Revenue Agency (CRA). The information would then be available for sharing with the jurisdiction in which the account holder resides for tax purposes under the provisions and safeguards of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters or the relevant bilateral tax treaty.
On December 15, 2016, Part XIX was added to the Income Tax Act, implementing the CRS due diligence and reporting obligations in Canada. This legislation together with the administration by the CRA will allow the CRA to exchange financial account information with participating jurisdictions beginning in 2018…” Link
THE DECLARATION:
“Declaration of Tax Residence for Individuals – Part XVIII and Part XIX of the Income Tax Act If you are an individual and you are planning to open a financial account or if you already have a financial account with a Canadian financial institution, it may ask you to fill out this or a similar form.
Canadian financial institutions are required under Part XVIII and Part XIX of the Income Tax Act to collect the information you provide on this form to determine if they have to report your financial account to the Canada Revenue Agency (CRA). The CRA may share this information with the government of a foreign jurisdiction that you are resident of for tax purposes. In the case of the United States, the CRA may also share the information with that country’s government if you are a U.S. citizen…
Section 2 – Declaration of tax residence
Tick all of the options that apply to you.
— I am a tax resident of Canada. If you ticked this box, give your social insurance number.
— I am a tax resident or a citizen of the United States.
If you ticked this box, give your taxpayer identification number (TIN) from the United States. If you do not have a TIN from the United States, have you applied for one? Yes No— I am a tax resident of a jurisdiction other than Canada or the United States.
If you ticked this box, give your jurisdictions of tax residence and taxpayer identification numbers…”
As I was saying, welcome to breitbart.ca…
Briefly looking over the guidance (first link in Stephen’s post), I noticed paragraph 8.33. I don’t know if this parapgrah was in previous versions of the guidance, but it appears to confirm the conclusion expressed on IBS and elsewhere regarding pre June 4, 2004 relinquishments
8.33 Generally, it is the CRA’s view that an explanation demonstrating a relinquishment of U.S. citizenship (other than by a renunciation before a U.S. consular or diplomatic official) before June 4, 2004, and in accordance with the U.S. Immigration and Nationality Act (Title 8 of the U.S. Code) as it existed at the time of relinquishment, is sufficient to demonstrate a reasonable explanation as to why an account holder does not have a CLN. Financial institutions are not expected to be experts in U.S. nationality law; any such explanation accepted by a financial institution is accepted for the purposes of Part XVIII and the Agreement only and is not finally determinative of tax or nationality status.
Disclaimer: I am not a lawyer, and this should not be taken to be legal advice, just my opinion!
There has been discussion of the second question:
“I am a tax resident or a citizen of the United States.”
Suppose you are a naturalized Canadian, born in the US. From your point of view, you relinquished your US citizenship when you became a citizen.
Are you lying if you say NO to the question?
I think not. Even if the IRS claims you are a citizen of the US, unless your case has gone to court, your status is open. They say you are, you say you are not a US citizen. So…in saying NO, you are staking a claim on your position, but you are not lying.
(I stand to be corrected by anyone with better knowledge of the subject.)
@NorthernShrike
And for accidentals who acquired Canadian citizenship at birth and thus never naturalized, one could always claim to have performed one of the many available relinquishing acts (worked for the federal government etc.) and therefore lost US citizenship. (Conversely anyone who acquired Canadian citizenship as a child may not be able to claim relinquishment through naturalization because they weren’t legally competent?) It doesn’t really matter, it’s about denying US citizenship in a believable way. As long as questions aren’t asked at the bank it doesn’t really matter if it’s a bald-faced lie, the honest truth, or a kinda-sorta-half-true-maybe-not-lie.
@NotthernShrike
You just described my personal situation to a “t”. The thing about this new form is that you don’t have to actually answer questions, you just do or don’t check a box. Not checking a box isn’t lying. At worst it might be called an error or omission.
Maybe instead of getting all grumpy about yet another obnoxious form we should think of it as our passport to full Canadian citizenship because once that sucker is on file, we are on record as a Canadian tax resident, period, full stop. The US problem goes away.
The previous Harper Government didn’t do us any favours on NAFTA, neither. Meanwhile, the NDP may be a significant force in the game of kingmaker politics, they don’t have the numbers to be the next government.
Not that I’m a fan of Justin, but hoping for a one term wonder won’t help me with the next two-faced turncoat. Not when it’s the US citizenship itself that’s the real chain around my neck.
@Nononymous
Re: Your comment about breitbart. Its possible Furious was just getting a early start for April Fool’s day.
@maz
You won’t be laughing when you wake up on April 2nd and find yourself under the yoke of Sharia Law AND the IRS!!!
aka the IRSIS
http://uk.businessinsider.com/donald-trump-irs-isis?r=US&IR=T
He’s not joking. He knows more than we do. He gets the intelligence briefings.
Absolutely. He reads the intelligence reports, the IRS reads his tax returns… 🙂
Oh, fuck Trump and fuck America already! I’m sick and tired of hearing it!
I’m not here to read about bullshit homelander politics!!
Northern Shrike, a follow-up to your point:
There are probably many Canadian citizen-residents who happened to be born in the U.S. who do not accept imposition of any foreign citizenship without consent.
These Canadians argue simply that foreign citizenship cannot be imposed on a person without consent (because refusal is a natural human right) and that there is no need or any logic for complicated legal paperwork or “permission” etc. to renounce foreign citizenship that has not been freely accepted.
So….are such Canadians really dishonest by not checking the CRA “I am a U.S. tax-citizen” box?
@Stephen Kish
No, such persons are not being dishonest at all, in my view. If an accidental never acquired a US passport, or in any other way attempted to “exercise the privilege” of US citizenship, then they can fail to check box #2 with an absolutely clear conscience.
But I’m more interested in the practical than the moral and ethical, so the relevant question is, will banks and other financial institutions simply accept the declaration or will they demand some sort of proof? Will they make assumptions they shouldn’t be making, such as US birthplace meaning automatic US citizenship (which it doesn’t, if you suddenly remember that one of your parents had diplomatic status).
@mjh
You have to let us tease the loons. It’s payback for all the hard work giving sensible advice.
If you want to say “no” but are afraid to, taking the practical approach, it would seem to me you start here.
1) Is it likely you ever used a piece of US ID to open a bank account in Canada/your adopted country? The only reason this might happen is when one first arrives and has nothing else but a passport. I did that for my very first bank account in 1982, closed long ago. I would not be overly worried about that being uncovered esp since I don’t deal with that institution and have not for decades.
2) Is it likely you ever mentioned you were a US citizen to anyone in the bank?
3) Do you really think a bank official would have put something like that in your file say pre 2008-2009 (which was the beginning but not quite yet, for us)?
4) Depending upon the length of time-do you even have the same accounts you had say, 10 or more years ago?
OR
Consider what information a bank has access to and what it does not.
1) I seriously doubt the bank can phone the State Dept to see if you have a US passport.
2) The bank would be unable to ask the IRS if you have a file.
3) The bank might try getting your credit report-which from my experience working in credit, DOB is there but not place of birth.
4) Really, what else could they possibly check or have access to, outside of their own records. Can they ask the CRA? Would the CRA have any info? Are they able to ask CIC? Or for other countries, your tax and/or immigration ministries?
OR
1) You have at least a 50% chance (or better) of a being able to deny without the bank knowing
2) Worse-case scenario – you say no, somehow the bank finds out.
3) The bank sends your info; same as if you had said yes
4) So big deal, the IRS knows you exist -you get a letter – you ignore the letter
5) If you cannot ignore the letter due to needing to enter for family reasons, at that point, you must make the choice-comply or comply and renounce that is the harsh reality the US is forcing upon you
OR and maybe we should be looking into this
If you are that worried about, go to the bank and ask to see your entire record
1) I am not aware of any law that says an institution can refuse to show what is on file-
and perhaps, if there is such a law saying no, that is something we should start demanding/fighting or
2) there are many reasons one might need to see their file-when an account opened, how long one has had an asset for valuation, etc……and even if the bank suspected you asked to see if they had indicia, if there is none, your act of asking proves nothing (and don’t think the bank really wants to know that)
that as well as, if a record is forwarded to CRA-IRS, one has the right to know and there should be a notification process in place.
IOW, being practical should offer options that lend one to either YES/NO as to likely to being found out. It should not contribute on any level, to doubt and fear-mongering………….IMHO
I’m betting the banks will happily accept a filled out form without any further to-do. Remember, FATCA is a pain for the banks as well as for individuals. The last thing they want to do is screw up the relationship with an otherwise (i.e. profitable) good customer, particularly with the stories that have been floating around in the media lately.
They don’t really care what a person answers as long as they fill out the damn form. Once it is on file, the bank has done its due diligence and can consider their ass covered. They are not experts on US citizenship law and don’t want to be; they don’t give a damn. Once they have that form, its time for them to get back to doing what they do best, making money.
@maz
Wait for it, a government lawyer will say precisely what you just said, to illustrate how the IGA does no harm. Oh the irony.
As long as government lawyers and the CRA officially state that lying on the form is OK if telling the truth might potentially cause a problem (similar to “if you have a green card don’t identify yourself as a US person to your financial institution”), I’d be good with that. That way, everybody’s ass would be covered, i.e. the banks, the CRA, AND individuals. Maybe something like “If you are a Canadian citizen living in Canada and you checked box #1, skip questions #2 and #3 and go directly to section 3”.
I’ve made it my sacred mission to make damn sure that IGA doesn’t do me any harm. Actually that’s a good way to deal with FATCA. Go through the motions to make the USG happy but make sure no Canadians are harmed in the process.
Interesting tidbit;
“.We understand the European Union is sending a delegation to Washington to discuss the reciprocity inherent in the IGAs…..”
from;
‘FBAR/FATCA Task Force Report’
posted by DA News |
March 28, 2017
http://www.democratsabroad.org/fbar_fatca_task_force_report
Note, then comes partisan unhelpful snark to rationalize FATCA;
(..”Though reciprocity is an important aspect of the IGAs that remains unfulfilled, financial account reporting has the support of the governments of Europe. Those nations and the many other countries implementing both FATCA and the OECD’s financial account disclosure regime see financial account reporting as a valuable tax enforcement mechanism. Other countries are not behaving like they believe FATCA will be repealed.”….).
Caveat;
I am not nor have ever been a member of any political party in the US, so I’m not posting this in support of either party. And I have renounced/relinquished.
More on the EU report and delegation to the US, part of which is about FATCA
http://isaacbrocksociety.ca/fatca-and-the-eu/comment-page-3/#comment-7850008
There is some interesting ammunition in the EU report that might be useful for opposition to FATCA in Canada, and elsewhere. Worth reading.
http://www.europarl.europa.eu/RegData/etudes/IDAN/2017/598602/EPRS_IDA(2017)598602_EN.pdf
@badger
word on the street is that the delegation only spoke to pro-FATCA forces……..