Thanks to @HelenBurggraf for this about the upcoming problems created by the Dutch banks. You can see the actual video from the Dutch banks here – is this information accurate or not? https://t.co/WW1K973T4l https://t.co/wR3hhghhO7
— U.S. Citizen Abroad (@USCitizenAbroad) August 31, 2019
Thanks to Helen Burggraf at American Expat Finance for reporting on this story. Helen was recently interviewed by the BBC on this topic. (See also this article that appeared on the STEP blog.)
The most important issue in the world today (forget about the demonstrations in Hong Kong) is whether US born people can supply banks with a US Social Security Number! Yes, it’s time to formally document, those undocumented US born people, who have always lived in other countries!
By way of background, the FATCA IGAs require that the banks include an individual’s TIN (Social Security Number) as part of FATCA reporting. Because the “powers to be” in U.S. Treasury, never contemplated that there might be accidental Americans (what in the world are those?), who did not have a Social Security Number, Treasury relaxed the requirement of a Social Security number until December 31, 2019. It is NOT clear what happens on January 1. 2020. Do the banks cease to be compliant with their obligations under the FATCA IGAs? Are the banks required to close the accounts of those life forms, who were born in the USA and are living as “undocumenteds” without a US Social Security Number? It looks like the Dutch banks think that account closures may be appropriate. There have also been “bank noises” coming out of the UK and France suggesting the same thing.
The UK, France, Netherlands (and Canada) have the same kind of IGA. Actually, most of the world has the same FATCA IGA. This means that “accidental Americans” the world over may be having problems. It’s just that “USness” (usually based on indentification of place of birth) is more visible in some countries (Europe) than in others (Canada).
Since it’s the IGA that governs what is required to be disclosed, it’s helpful to look to the IGA to see what is actually required. Not a single media article has referenced the section of the various IGAs that would require the closing of accounts. But, no matter …*
As Ms. Burggraf writes:
In the latest development in what is becoming a fast-moving international story concerning the bank accounts of tens of thousands of “accidental Americans” living outside of the U.S., it has emerged that the Dutch Banking Association has posted an animated video on the home page of its website in which it warns such clients of the need to get their U.S. Social Security numbers – if they don’t wish to lose their Dutch bank accounts.
A spokesperson for a European accidental Americans organization said that the video appeared to suggest that Europe’s banks were “well on their way to becoming the willing agents of the U.S. Internal Revenue Service.“
The actual video (which is well worth the look) is referenced in the following tweet:
A public service message about #FATCA from the Dutch banks – look out! They say they may no longer be able to provide services to those who where "Born In The USA" and are therefore @TaxCheatByBirth! https://t.co/Nf6HvJJakA
— U.S. Citizen Abroad (@USCitizenAbroad) August 31, 2019
Yes, it’s true. The Dutch banks are very anxious to assist in subjecting Dutch citizens and residents to the U.S. tax system.
Hard to believe that:
1. The United States is claiming tax residents of other countries as their own U.S. tax residents; and
2. That the banks are so willing to assist in facilitating this.
It apparently hasn’t dawned on these people, that the U.S. and the U.S. alone, defines exactly which Dutch residents are subject to claims by the United States.
In any event, it seems to me that the video makes some claims of questionable accuracy. If you agree, perhaps you could post some of these as comments.
And yes for those who are only interested in what steps they might take to get a U.S. Social Security the answer may be found:
Here for those living in Canada (actually its worse); and
Here for those living outside the United States and Canada.
The Dutch banks are blanketing the airwaves requesting that those with a U.S. birthplace provide the banks with a Social Security number. It’s not easy having a U.S. birthplace. In fact, life is probably too short to live it as an (accused) American.
To apply for a Social Security Number or not not apply for a Social Security Number, that is the question. Whether tis better to …
What should these poor people do?
______________________________________________________
*Since Canada has the same kind of IGA as the Netherlands, France and the UK I thought it might be interesting to get the Canada Revenue Agency’s description of the Social Security Number issue. Interpret this as you will …
U.S. federal taxpayer identification number (U.S. TIN)
12.24 The U.S. TIN of a specified U.S. person that is an account holder (or a person identified as a controlling person) must be reported. However, there is a phase-in period in connection with preexisting accounts. A U.S. TIN includes:
a social security number (SSN); an individual taxpayer identification number (ITIN); and an employer identification number (EIN).
12.25 It must be reported for the 2014 to 2016 reportable years in connection with a preexisting account only if the U.S. TIN exists in the records of the reporting Canadian financial institution. If it does not exist, the financial institution must report the specified U.S. person’s date of birth if that information is in its records.
12.26 For the 2017, 2018 and 2019 calendar years in connection with preexisting accounts, a reporting Canadian financial institution that has not obtained the U.S. TIN is required to:
– review electronically searchable data for any missing U.S. TIN;
– request any missing required U.S. TIN from each account holder annually; and
obtain and report the date of birth of each account holder and controlling person whose required U.S. TIN is missing.12.27 A financial institution must make reasonable efforts to secure an account holder’s U.S. TIN. A financial institution is authorized to ask its account holders to provide a U.S. TIN at any time regardless of the phase-in provided for in the Agreement (see paragraph 4 of Article 3 and paragraph 4 of Article 6). If an account holder does not have a U.S. TIN, the account holder is required to apply for one and provide the number to the Canadian financial institution. If the account holder does not provide a U.S. TIN, the account remains reportable.
12.28 “Reasonable efforts” means genuine attempts to acquire the TIN of the account holder of a U.S. reportable account.
Example
Reasonable efforts include contacting the account holder (e.g., by mail, in-person or by phone), including a request made as part of other documentation or electronically (e.g., by facsimile or by e-mail); and reviewing electronically searchable information maintained by a related entity of the financial institution. However, reasonable efforts do not necessarily require closing, blocking, or transferring the account, nor conditioning or otherwise limiting its use. Notwithstanding the foregoing, reasonable efforts can continue to be made after the above mentioned period.
The video states that if one was born in the USA, then one has US citizenship. This overlooks the (admittedly remote) possibility that one’s parents may have been foreign diplomats, in which case the child would not acquire US citizenship. It would be interesting to know if any procedures are in place for such people.
Australia’s Westpac bank is now sending out a notice via internet banking that any US citizens on their books MUST submit a TIN (or social security number) to the bank, which will then be sent to the Australian Tax Office (ATO). It was clear that failure to do so would eventually lead to closure of accounts. I also noticed on the Paypal site a similar notice. I think it mentioned any transactions over a $10,000 US limit so small fry can still use Paypal- at least for now.
I don’t and won’t tweet. I won’t bother you with my thoughts about the phenomenon. However, for those that do, could someone comment that getting a TIN is not necessarily followed by tax filing.
Just checked the RBC on line account opening process. Question. Are you a tax resident of Canada -yes. Pick a province. Check. Are you a tax resident of any other country? Easy to say no.
Note they don’t ask where you were born and they don’t ask your citizenship. Easy to assume that ‘tax resident ‘ doesn’t equal citizenship. We are lucky compared to Dutch citizens.
@Portland
legally speaking, all US citizens are considered tax residents of the US regardless of they live.
@Cam….
I’m sure Portland is well aware of the stupidity of US tax laws. He was merely pointing out that “practically speaking” a US citizen residing in Canada can easily and safely ignore what the US “considers” and be solely a Canadian tax resident if they so desire. Who cares what the US government may think about it?
@Cam
In practical terms, one may either not know that US citizenship equals US tax residency, or one may conveniently forget this fact. Bank forms can be so ambiguous and intimidating sometimes.
While I would assume that the “grace period” for US persons without a TIN will run out in 2020 for all countries that have signed an IGA, we’ve heard absolutely nothing about the possibility of account closures in Canada yet, as far as I’m aware.
Speaking only of Canada here:
If you are a US person and have identified yourself as such to your bank, but you do not have a TIN, then presumably at some point in the near future the bank will ask you to supply for a US Social Security Number. Perhaps they will threaten to close your account if one is not forthcoming, but again, we’ve heard of no such threats in Canada yet.* (As was mentioned in a previous comment, one can obtain an SSN to make the bank happy, but never file US tax returns. The IRS might receive some FATCA data, which is less than ideal but probably not the end of the world, particularly for a dual citizen immune from collection in Canada.)
If you are a US person who has not identified themselves as such to your bank, do not do so. Canadian banks rely on self-certification and have no basis to challenge the truthfulness of a customer’s answer unless they have evidence of US citizenship on file. Since banks typically never recorded information about citizenship or birthplace, that is very unlikely
*About five years ago I was threatened with a “trading freeze” on an RRSP account because I refused to supply an SSN or sign a W9. Turns out this was probably caused by confusion about an old US mailing address on file, and once I stated for the record that I was not a US citizen (which was not true) they let the matter drop.
Max 57 and Ron H. Thank you
Yeah that was kind of a “Thanks, Captain Obvious” moment, wasn’t it?
Was the title question “Do you remember where you were born or were you in fact born in the United States?” actually in the video? I don’t remember hearing it. Of course few people would be able to recall their births. On the other hand, few of us would forget the birthplace we were told, so I’m not sure what the background of the question would be.
@ Zla’od,
I heard the first question asked in the video as “Bent U geboren in de Verenigde Staten?” which is “Were you born in the United States?” but I didn’t hear “Do you remember where you were born?” or any other questions about birth in the video. I found the English subtitles very consistent with the audio; doesn’t appear they left anything out, as is sometimes done with subtitling.
What does the bank do when you provide them with the letter from Social Security refusing to give you a TIN?
“It’s not easy having a U.S. birthplace. In fact, life is probably too short to live it as an (accused) American.”
Truer words….
Just yesterday I – a CLN holder – applied for an account with a European online bank. The application only asked for city of birth, which, as I hail from New England, was vague enough. They also asked for all my tax residencies and had a special info box to click on about American tax residency. Naturally, I provided my country of citizenship as my only tax residency. That said, a few minutes after I submitted the online application, I received an email with a link to confirm my account details and identity; I had to provide a picture of my passport, which plainly states my country of birth. I’m curious to see if my application gets flagged during the bank’s ID check because of that birthplace.
Unfortunately, none of these online banking services provide any way to deny US status by letting you upload a copy of your CLN. I would like a free online checking account the same as most other Europeans enjoy and not be forced to use a brick and mortar bank that charges monthly fees just so I can prove I no longer have any US taint. The whole banking issue with FATCA affects everyone with any US indicia, whether they are accidentals, unawares, renouncers, relinquishers or whatever other situations folks may find themselves in. Simply ludicrous! My birthplace is going to haunt me for the rest of my days – there’s no escape from being accused of US-ness.
The only thing I have seen in Canada to date is this: If you are a signing authority to a trust account or the signing authorities are changing requiring everyone to attend the bank with I.D., YOU WILL BE ASKED. I was the signing authority on (7) accounts of which (6) were trust accounts. A month after I renounced in Calgary, the firm I worked for received the first letter, then another and another. Are you, a partner, an associate or anyone else in your firm who has the ability to move money, a US citizen for tax purposes? Two years ago, we changed signing authorities on the trust accounts when an associate left the firm. TD did ask.
@Ann #1
I’m sure that compliance and enforcement is tighter in professional situations with signing authority etc. And the consequences of being caught lying about US citizenship might be job loss, so not to be done lightly.
Did the ID requirements include ID that shows birthplace, or is it just driver’s license and trust the customer to answer truthfully?
The IRS answer is really simple to this issue. You want a bank account, get a SSN or renounce.
Not to minimize this issue, but there are lots bigger problems facing expats like transition tax, PFIC, etc. because those are retroactive issues that renunciation will not solve.
We keep hearing about the “accidentals” described like they are more innocently caught in this that other expats. Believe me, we are all accidentals in that none of us intended to be in this nightmare. We are all in this and screwed by the US and its homelanders.
Have to add though at least accidentals can renounce with almost no chance of being a covered expat. Often I wish I was an accidental.
It’s not up to the IRS. It’s between you and your bank. If you live in a country where a driver’s license is the only ID you need to open an account, or you weren’t born in the US, pas de problem.
All the rest of those problems aren’t problems for anyone willing to not be compliant, or stop being compliant. (With all the usual caveats: citizen in their country of residence, no US assets or income sources, yada yada.)
@Cam
Yes, for accidentals who have never been in the system, renunciation has a good chance of solving their problem once and for all. No Social Security Number, no tax history, nothing much. They can simply renounce with a chance that that’s the end of it. So, why don’t more of them do this?
You are absolutely correct that “tax compliant” Americans abroad who are subjected to the retroactive confiscation – have a much bigger and more complex problem.
@Ron Henderson
Of course that’s not what is going on in the Netherlands or Europe. The people in Europe have a problem because “place of birth” is commonly listed on ID. Also, many of these people already have been flagged as “U.S. Persons”. Obviously those have not been identified as “U.S. Persons” will hide their (possible status). At this stage, most realize that they should simply avoid opening any new bank accounts.
One more of the thousands of comments that fails to address the situation of the large numbers of people whose lives have been destroyed because they are in the system and have experienced some of the circumstances that Cam addresses. Of course they can just stop filing. But, this group of people is open to a large number of problems because they are already in the system.
(It’s obvious that those who have a history of filing would not enter the system if they knew then what they know now.)
As has been discussed extensively, the “citizen in their country of residence” is relevant to the “assistance in collection” issue and not relevant to the “assessment of tax issue”. Most people would prefer not to (and many would not) hide behind the “assistance in collection” provision of the treaty. This is the reality for those who (as @Cam describes) already have transition tax, PFIC and other assorted issues.
In addition, the “citizen in their country of residence” is relevant only in six countries. How (for example) does the fact of being a British citizen help a US citizen living in the UK (whether British citizen or not)?
@ Ron Henderson @USCitizenAbroad
Dewees and Pomerantz are the examples we know of in Canada. Dewees was not a citizen and was collected against by CRA. To date they have not collected money from Pomerantz, though a 1.4 million permanent judgement was assessed and is sitting against him and his heirs in the USA. No collection but the man has probably paid with years of insomnia, looking over his shoulder, and an untold amount in legal fees.
True, until the treaty changes, US cannot collect in countries where the expat is a citizen, so we are not talking about collection problems. Really, the options to renounce, not renounce, to comply, or not to comply are options people have to treat their anxiety levels, not tax issues. If one has the stamina to withstand a high anxiety level, maybe they should stop complying, as compliance can get incredibly expensive and complicated as illustrated by the transition tax. Some vultures asked for 20k retainers just to “examine”.
By the way, all upcoming treaty changes would be posted here: https://www.fin.gc.ca/treaties-conventions/treatystatus_-eng.asp
I copied the above comment and moved its replies to the Tax Discussion Thread.
CIBC in Canada has started sending this letter out to its customers:
https://cdn.fbsbx.com/v/t59.2708-21/67788374_466911770757695_6867677436725690368_n.pdf/output.pdf?_nc_cat=102&_nc_oc=AQmbi2w-DKVs9DUcP8yyJm1Sk4KZoY1c2uhhi95K5ERyatzEz_XG1c8UbdIGDxPOMsE&_nc_ht=cdn.fbsbx.com&oh=94cc499413bddc444fb39e211a8ad431&oe=5D6F56E4&dl=1
…and threatening them with $500 CRA fines for not providing them with SSNs:
https://www.cibc.com/en/legal/common-reporting-standard.html
CIBC in Canada has started sending this letter out to its customers:
https://cdn.fbsbx.com/v/t59.2708-21/67788374_466911770757695_6867677436725690368_n.pdf/output.pdf?_nc_cat=102&_nc_oc=AQmbi2w-DKVs9DUcP8yyJm1Sk4KZoY1c2uhhi95K5ERyatzEz_XG1c8UbdIGDxPOMsE&_nc_ht=cdn.fbsbx.com&oh=94cc499413bddc444fb39e211a8ad431&oe=5D6F56E4&dl=1
…and threatening them with $500 CRA fines for not providing them with SSNs:
https://www.cibc.com/en/legal/common-reporting-standard.html
That letter would be going out to a customer who has self-identified as a US person but has not provided an SSN, correct? Not to all customers.
Interesting that there is no mention of account closure for failing comply with the request.
As has been discussed elsewhere, that $500 CRA fine business may be a hollow threat. A quick scan of the other major Canadian banks reveals no such language on their sites, nor any discussion of missing SSNs.
The next issue the IRS will bring up won’t be missing SSNs, but correct ones. Bad data is as bad as no data.