24 thoughts on “October 1 2017 Canadian FATCA IGA Legislation Litigation Update”

1. Thank you very much Stephen for the update, and I am thankful that Gwen and Kazia are okay after the government’s oral examination. I thank you and them and all those helping it to happen over all this long time.

   Canada’s delays in this matter, and the Sunny gLib government’s decision to take up the Con mantle (which they once fulsomely and publicly decried) denying our brave plaintiffs and fellow Canadians of our constitutional and Charter rights not to be discriminated against based on national origin, and the ceding of Canadian sovereignty and autonomy to a foreign power remain unconscionable and unforgivable.

2. Take care all of you who have brought us this far. Bless each and every one.
   I am thinking of all of you with gratitude and warmth. Please pass on my best to everyone.

3. Did anyone notify the U.S. government about the lawsuit? Part 3506 of U.S. law requires Citizens of the United States to notify the government in cases like this. What was the governments’s response?

4. @Dazed,
   Re the “Part 3506 of U.S. law” you mention, are you referring to 18 USC 3506?   That wouldn’t apply in this case, as it requires “Service [on the US govt] of papers filed in opposition to official request by United States to foreign government for criminal evidence”.

5. Thank you all (including Ginny) for your sterling service in the pursuit of Justice.

   I am disturbed that Joe Arvey has parted ways with Farris. Is there no way that he could continue in this case WITH Farris till this case is ended. He does have quite a reputation.

   Does the Cdn Govt really have control of the accelerator in this or does the Court?

6. Glad to hear that Gwen and Kazia are OK after examination by government lawyers, which can be quite an ordeal. Sad to hear Joseph Arvay is no longer involved. He left me with a very positive impression as a lawyer in the Vancouver court proceeding.

7. @pacific777 – I don’t know if that’s the law or not. But I’ve been told that the U.S. gov needs notification and if it hasn’t been notified that is a big problem.

8. Thanks for the update, Stephen. A big thank you to our plaintiffs, present and past.

9. Stephen: Thank you for the update. I am saddened to learn of Mr. Arvay’s departure. That is one of the prices to be paid for the sluggish progress of this litigation. The delay tactics of the Canadian federal government in this matter is beyond belief. Meanwhile Mr. Arvay’s life has moved on. The rest of us would like to move on too. I will hope, along with you that we hear from the government lawyers VERY soon. My best wishes and thanks to our plaintiffs!

   Dazed: This lawsuit is being brought by CANADIAN citizens against the CANADIAN government. Why would the US need to be notified?

10. “… (and are OK).” is the best news in the update, to me. Many of us (me especially) would be a nervous wreck, before, during and after such an interrogation. Gwen and Kazia are amazingly strong plaintiffs. We’re lucky to have them. Very sorry to hear that Joseph Arvay will no longer be part of the legal team. That’s what happens when things draw on and on … people have to move forward in their lives. I’m sure that’s just the sort of thing the government has been banking on with its constant delaying tactics. I guess our “Surgite!” will simply have to endure the reality that justice does not always come in a day, a week or a month … it can take years.

11. I urge those in Canada to forward your MP’s a copy of Congressman Posey’s letter to Treasury Secretary Mnuchin, with a suggestion that instead of fighting their fellow Canadians in court, they could be using any channels they have trying to get FATCA repealed, or at least “frozen” by Secy Mnuchin.

    http://isaacbrocksociety.ca/2017/09/29/congressman-bill-posey-asks-secy-mnuchin-to-deal-with-fatca/

12. Thank you Stephen. And thank you to everyone else involved, especially those that braved the effort. I think because of you, I feel safer going south for my mom’s 95th birthday. As a Canadian, bred and born on the Saskatchewan prairies, my mom’s dismayed over what the Canadian Government did to appease the U.S. government, and what the U.S. government’s doing to collect money it’s already spent. Speaking of which…

    The liberals attacking small business and farmers, raising taxes to continue raising money to feed it’s spending habits? Whaaaaaaaaaaat?

13. What the team has accomplished is admirable. You have done more than you think. As the Canadian govt drags this out, you have to live with changes in plaintiffs and lawyers.

    I do hope you all keep at it and win in the end, but whatever the outcome, you have done so much to help us all, to raise education and awareness, that it is impossible to thank you enough.

14. Thanks for the update. I too am sorry to hear about the loss of Mr. Arvay.

15. If absolutely nothing happened at all , which of course, it has, we would all be better for the association with all here. Good and bad. Positive and Negative.
    The fact that so many diverse people, physically, socially, politically came together for one cause: Justice and Sovereignty, is a remarkable and almost miraculous achievement.
    Particularly since most have never met in person. And yet, most who have participated have realized a benefit that many not involved would never understand: The saving of our sanity.
    Drawn together by one all encompassing outrage against our individual freedom and our privacy.
    Not to mention the wholly evil assault on Canadians whose connection with the US was through marriage only or some other very legally tenuous attachment such as membership in a company, co-op, club.

    It would appear that the US Congress may move before our court case can be heard.
    It has been suggested that the Canadian government see the writing on the wall and withdraw their very expensive objections to our rights and liberties. The Trudeau government seems not to care one whit about those of us who have been here, been born here or reside here peacefully and productively contributing to society. ONLY those whose origins are suspect as are their motives are given taxpayer funded free rides on taxpayer funding they have never contributed to or earned in any way.
    Political parties in Canada are going to have to answer to a whole lot more than they have in campaigns of the past.
    Mr. Trudeau has squandered in record time the good will of a nation looking for solutions a new government should be expected to provide, especially when the promises made were specific.
    The attitude of the Trudeau government perfectly mirror the attitude of the Obama government over 8 years. The embracing of the Trump Administration is totally rejected in Canada politically leaving the country at least 8 years behind in understanding the threat we face as a country and as all people face under the assault of global aims and intent.
    One hopes the determination of opposition in Canada mirrors the determination of the individuals who make up the Isaac Brock Society and the ADCS. Moreover, the determination of those opposing the Canadian government to the adherence of defying existing law to return the Bank of Canada to the country of it’s origin for the benefit of her citizens instead of the overwhelming enrichment of private entities.
    The ending of FATCA. The recognition of the government of Canada that their efforts to destroy Canadians on the orders of a criminal administration in cahoots with global intentions is even more Treasonous than giving away their own public bank would be excellent if they acknowledged it on their own rather than having it forced on them.
    The enormous cost in taxpayer dollars of our own government defying her own citizens for the further enrichment of offshore interests, whether they be the US IRS or the Bank of International Settlements is something that should ensure the enmity of an entire nation.

16. @FuriousAC
    Thank you for your comment. It is worth reading more than once. It truly represents what has been going on.

17. Thank you, Furious AC. You have put into words well what many of us deemed US citizens or persons in Canada or bonafide dual US/Canadian citizens think about what the Canadian Conservative government did in so readily signing an IGA with the US and, as a real slap in the face, the then complete betrayal of the Liberal government after all of its hollow words turned into a complete flip-flop.

    *A Canadian is A Canadian is A Canadian* or so it’s been said.

18. Kudos, Furious AC! Thank you!

19. This is a very interesting report by TIGTA, and worth reading (thanks to Tom.Harrison for bringing it to our attention on another thread).

    See ‘FATCA? Who Cares? Information CHAOS at the IRS’ https://www.angloinfo.com/blogs/global/us-tax/fatca-information-chaos-at-the-irs/, which leads to the significant TIGTA report she discusses; ‘Exchange of Information Capabilities Are Underutilized by the Internal Revenue Service ‘
    September 11, 2017
    Reference Number: 2017-30-077.
    https://www.treasury.gov/tigta/auditreports/2017reports/201730077fr.pdf

    As Virginia noted, the TIGTA report on their audit excluded and examination of the IRS status of FATCA data – which may be very significant. Also, she says; “…A September 11, 2017 Report (Report) by the Treasury Inspector General for Tax Administration (TIGTA) revealed that the Internal Revenue Service (IRS) is not up to speed in processing or using information sent to it from foreign countries, including bulk data from the automatic exchange of information….”

    The report is very interesting, and may provide ammunition for court cases against the FATCA IGAs in terms of whether the US is even honouring its commitment under existing treaties re automatic exchange of information. I am really wondering what if any information it has even managed to send to those with tax treaties such as Canada. The Canadian government has refused to disclose whether/what information it has received from the US. Seems that there may be some grounds to be doubtful that the US is even keeping its promises re sending info outside of the FATCA IGAs;

    Ex.
    “…..The United States paused sending information on United States source payments to treaty
    partners in 2012 to update the processes the IRS employs to assess whether United States
    exchange partners have the appropriate legal framework and infrastructure to safeguard the
    information exchanged, and implement these new processes. As of May 2017, the program
    continues to be paused, and there is no definitive timeline to restart the program. In the
    meantime, the IRS is still creating files for each country but is not sending them out. Because of
    the reciprocal nature of exchange-of-information relationships
    , it appears seven treaty partners have paused further automatic exchanges with the IRS pending resumption of IRS automatic exchange activity.
    10
    Of the 21 treaty partners who were inconsistent in sending data, four
    partners stopped sending automatic exchange information after Fiscal Year
    2012, and another three partners stopped sending information after Fiscal Year 2013……”

20. Admins, it’s not my intention to duplicate the comment I made here http://isaacbrocksociety.ca/2017/09/26/five-days-left-to-send-repeal-citizenship-based-taxation-letters-and-petition/comment-page-4/#comment-8013084 but thought it would be very useful (and perhaps more relevant) on this lawsuit update thread too.

    Perhaps the lawsuit team could look at the TIGTA report to see if it contains any useful ammunition to bolster any line of argument, or to cast doubt on how it is that Canada is willing to violate and subvert our Charter and constitutional rights in order to send information that the US cannot even use and potentially has suspended providing even non-FATCA information to treaty partners – which might include Canada?

21. Comment from BADGER: (Badger accidentally posted this on the wrong thread and asked us to move it here (we can’t actually move a comment, so I cut-and-pasted it)).

    Badger writes:

    “Later reading in the TIGTA report, Canada and treaties which include mutual assistance in collection agreements are mentioned, (and also the ‘international tax gap’ which they continue to admit the IRS has no actual numbers for).

    ex.
    see Page 12
    “….’Exchange of Information Capabilities
    Are Underutilized by the Internal Revenue Service’
    The expanding overseas activities of United States entities (individuals, trusts, and businesses)
    has increased certain opportunities for tax avoidance and evasion. Actions taken by the IRS to address
    these issues include establishment of the international enforcement program. In Fiscal Year 2016, the IRS’s international collection strategy identified the MCAR Program as an area of focus.23

    This program is an enforcement tool that can be used to help address noncompliance
    with the tax laws. The IRS estimated that for Tax Years 2008 through 2010, taxpayers underpaid
    an annual average of $39 billion, with individual taxpayers accounting for $29 of the $39 billion.
    The IRS does not have a separate estimate for the international component of the Tax Gap.
    However, non-IRS sources estimate the international Tax Gap to be between $40 billion and
    $123 billion annually.24
    Certain tax treaties to which the United States is a party provide for mutual assistance in
    collection. The collection assistance provisions of a tax treaty enable one country to collect taxes
    covered by the treaty on behalf of the other country. A request of such assistance is referred to as an MCAR.25
    The United States currently has five mutual collection income tax treaty partners as follows:
    •
    Canada
    •
    Denmark
    •
    France
    •
    The Netherlands
    •
    Sweden
    There are some limitations on the type of taxpayer each country will pursue collection against.
    For example, the United States and all its mutual collection income tax treaty partners will generally not
    pursue MCAR collection action against one of their own citizens. A United States request for collection assistance (hereafter referred to as “outgoing MCAR”) originates from the Field Collection effort in the SB/SE Division. If, after all domestic sources of collections have been exhausted, any assets are discovered inan MCAR treaty country, then the revenue officer will prepare an outgoing MCAR request. The SB/SE Division MCAR Coordinator reviews the request and forwards it to the EOI Program Office for issuance.”

22. Thanks once again @pacifica. I am muddled with chasing too many threads today.

    I hope the relevance of my posts here re the TIGTA report are clear. Canada is mentioned in the report because it is one of the countries with an automatic ‘reciprocal’ reporting agreement, the IRS has too much data from other tax agencies in other jurisdictions to sift through overall – even without including the FATCA data, and thus US reciprocity in general is further in question – as they have apparently suspended for years some of the automatic information they were providing to some un-named countries (could include Canada as far as we know?), TIGTA is pushing them to do more with the data in terms of requests for mutual assistance in collection (Canada is one of the countries with mutual assitance provisions), surprisingly though the IRS claims FATCA to be a success,TIGTA left FATCA data out of its audit report (no reason given), etc.

    This report calls into further question why all the countries of the world are being extorted at the point of the FATCA witholding gun, and paying for the ongoing implementation of a foreign US law on our own sovereign autonomous soil to be used against our own citizens and taxpayers, and absurdly the US is not even able to cope with the information it already collects, and in some cases (unknown) has stopped remitting information to some of the countries that it has agreements with.

    I commented in the hopes that other will read the report and consider whether it can either help on this thread with the lawsuit and support for Canadian opposition against FATCA and US extraterritorial CBT imposed on Canadians (and on the other thread that it might be used to help with framing of letters against the cost, wastefulness and futility of enforcing US extraterritorial CBT, FATCA and FBAR).

23. I don’t really understand all the import of this, but this caught my eye, and wondered if it might help the lawsuit? I’ve put it also on a few other threads. (FATCA and Canada, and as fodder for the letter/petition writing campaigns).

    See;
    http://isaacbrocksociety.ca/fatca-and-canada/comment-page-8/#comment-8023423
    re a very recent September 22nd, 2017 letter from the IIAC to the IRS
    Page 5
    “…The Canada Revenue Agency has not publicly
    commented on this specific issue at this time. However, Canadian QIs could potentially be in the position
    where they need to decide if they are going to be compliant with local tax laws or their QI Agreement. If
    Canadian QIs withhold on payments of dividend equivalent amounts, but local authorities have
    determined that these amounts are not subject to withholding at source, clients would be penalized as
    they would be taxed according to U.S. laws and yet not able to receive any tax credits under the treaty.
    This will result in contradictory treatment of similar payments across jurisdictions and will create an

    unlevel playing field within the securities industry depending on how various countries respond to the
    jurisdictional question….. “”
    http://iiac.ca/wp-content/uploads/IIAC-Letter-to-Treasury-and-IRS-re-Executive-Order-13777-Enforcing-the-Regulatory-Reform-Agenda-and-Section-871m.pdf

    Interesting comments from the IIAC about “…jurisdictional concerns..”, and the potential for paying US tax but without being able to claim credit for it under existing tax treaty with US. Also notes the problem exists and has been noted by “…United Kingdom, France, Spain, Italy and Germany…” .

    and see this which is referenced too;

    This is of a 31 August 2016 letter from the British Bankers Association
    https://www.bba.org.uk/download-file/?f=eyJ1cmwiOiJodHRwczpcL1wvd3d3LmJiYS5vcmcudWtcL3dwLWNvbnRlbnRcL3VwbG9hZHNcLzIwMTZcLzA5XC9CQkEtQ29tbWVudHMtb24tTm90aWNlLTIwMTYtNDIucGRmIiwibmVlZGxvZ2luIjpmYWxzZSwidXNlciI6ZmFsc2V9

    The issues highlighted by the BBA (British Bankers Association) to the IRS, may also be a problem for Canada, the CRA and the FATCA IGA;
    …….”1. Managing potential conflict with local law
    The proposed QDD rules require prospective QDDs to agree to take primary withholding responsibility
    for section 871(m) transactions. During the course of implementing FATCA, a number of banks and
    industry bodies (including the BBA) highlighted that in their jurisdiction, withholding on behalf of a
    foreign government may not be permitted
    1
    , and that, at best, in a number of other countries
    clarification was needed from local tax authorities before withholding could take place.
    Addressing this was part of the purpose of the Intergovernmental Agreements signed for FATCA
    purposes, agreed by the respective tax authorities.
    However, in the case of section 871(m) and the QDD rules, we understand that there have not been
    equivalent discussions to address the withholding issue. The IRS needs to engage with their
    counterparts in other tax authorities to discuss these issues.
    There is also an issue for ensuring appropriate double tax relief to ensure that recipients of payments
    do not suffer tax on a payment under both local law and section 871(m). We are not aware that the
    tax authority of any country has addressed this issue as yet and time will be needed for governments
    to consider and address these rules. The consequence of applying section 871(m) is that income
    which would have previously been treated as sourced and taxable in one country will now instead be
    treated as taxable in the US. Since this will result in a shift of tax from the domestic revenue to the
    1 For example, the letter from the UK Ambassador to the US, dated 6 August 2010 available here:
    http://www.bsmlegal.com/PDFs/BritishEmbassy.pdf https://web.archive.org/web/20160330115245/www.bsmlegal.com/PDFs/BritishEmbassy.pdf
    Page 2
    2
    US, we would encourage active engagement with domestic tax authorities to eliminate double
    taxation. In particular, if a domestic authority does not recognise the section 871(m) tax, or accept the
    US Treasury view that it is a dividend, that may lead to the denial of a tax credit”………….

    Perhaps this can help to show that the IGAs do not solve the jurisdiction and legal and tax issues entirely, and may still be in conflict with the Canada US tax treaty? Perhaps this is not covered by the enabling legislation?

    Beyond my ken, so turning it over for you to read and consider. Read also their footnote links to letters from the German banking association, etc. as provided in the IIAC letter. All useful links should be immediately entered into the Wayback Machine internet archive https://archive.org/web/ and saved for future reference to preserve access.

24. Following