Author Archives: calgary411

The Canadian IGA says:

Accounts under $50K are not reportable “unless the FFI elects otherwise”.
Accounts with unambiguous US birthplace are reportable by the FFI “unless it elects to apply subparagraph B(4)…” (which is to try to cure the indicia).

The CRA draft guidance says:

The CRA expects that financial institutions will generally attempt to cure indicia before determining that an account is reportable.

I persisted with my own financial investment advisor, saying I wanted none of our information to go to the CRA as we have CLNs (US-ness was known) and finally got this statement:

I have reviewed all of your documentation that I have for you here and in all of this; I have only noted Canadian Citizenship. Given this, yours and XXX’s status would be noted as Canadian Citizens only with no indication of indicia on record, therefore TD would be reporting to CRA for you as per every other Canadian Citizen.

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Says bubblebustin,

Wow, the Animal, you are as exceptional with the written word as you are with graphic arts. Well said:

 

This is not the Canada that I was born in.

The Canada I remember, was one of Pierre Elliot Trudeau. The very same who stated: “We must now establish the basic principles, the basic values and beliefs which hold us together as Canadians so that beyond our regional loyalties there is a way of life and a system of values which make us proud of the country that has given us such freedom and such immeasurable joy.” when he signed the Charter of Human Rights and Freedoms in 1981. Back then we were so proud that we had a Charter of Human Rights and Freedoms to aspire to. That at the very age of eleven, I looked on believing Canada to be the land of the just and upholder of human decency. We were proud of being Canadians; the first to put together such a proclaimed charter that the Queen herself had given Royal Assent and personally signed in a ceremony on Parliament Hill. We truly believed that Canada was at the forefront of civilized nations.

Just a couple of short days ago, …

Waking on Canada Day to:

Now today, July 2, 2014:

…here I stand not 33 years later angered and bitter at the fact that Canada, under Prime Minister Stephen Harper has signed away those very rights and freedoms that were enshrined to us under the Charter of Human Rights and Freedoms by passing an omnibus bill that contained a United States law called the Foreign Account Tax Compliance Act (FATCA).

…

This law does not affect just those with clinging US person-hood, but it affects all of us. We will be forced to pay out of pocket for the rising costs of the bank compliance through higher fees, intrusive interrogation when opening a bank account that normally would be cause for a Human Rights complaint, but because of a flourish of a pen, is made legal to ask. One by one our rights are being eroded and instead of being enraged for the further erosion of this once-great country, we are complying with a whimper. Trudeau would ask about the location of our spine.

The acts of our government would indicate that we have none.

*****************

Yes, bubblebustin,

Shame on the Canadian media for not warning all Canadians of the impending attack. Laura Secord’s rolling in her grave.

“Appalled, incredulous and angry’: Canadians slam law giving IRS personal info

The U.S FATCA intergovernmental agreement negotiated and signed behind closed doors by the Canadian government; legislation for implementation buried in omnibus Budget Bill C-31; hearings and debate before the House of Commons and the Canadian Senate without media coverage on any of that process to Canadians, and now omnibus Bill C-31 given Royal Assent by Canada’s Governor General and the FATCA IGA not even mentioned in the Conservative government’s press release. Still so few know. How is this possible in a country that calls itself a democracy?

So, Patrick Cain revealed to Canada the many submissions that did not get to the MPs and Senators who determined the fate of so-called *US Persons in Canada*.

One person was “appalled, incredulous and angry”; another asked Ottawa to “resist these threats to our autonomy and sovereignty with all means available.” Another argued that “with a huge cost and no benefit to Canada, this is not an agreement at all but a surrender.”

(From MapleSandbox.ca, Patrick reported) The finance department released more than 400 pages of responses under access-to-information-laws. In most cases, the writers’ names were redacted.

Enabling legislation for FATCA, which is part of the budget bill, passed third reading in the House of Commons last Wednesday and achieved royal assent on Friday.

After the deal was announced Feb. 5, the Federal Finance Department asked the public for submissions, due by March 10.

In response, they got 108 letters from private citizens and an analysis of the deal by law professors Allison Christians and Arthur Cockfield, who teach at McGill and Queen’s, respectively.

Thank you, Patrick Cain, Margaret Wente and G&M June 22, 2014 Editorial. Please keep this issue alive so *US Persons* in Canada finally will know what is in their future come Canada Day, July 1, 2014.

Your voice in *US Persons in Canada as 2nd-class citizens* and the future of Canada’s Sovereignty = support for Alliance for the Defence of Canadian Sovereignty.

The U.S FATCA intergovernmental agreement negotiated and signed behind closed doors by the Canadian government; legislation for implementation buried in omnibus Budget Bill C-31; hearings and debate before the House of Commons and the Canadian Senate without media coverage on any of that process to Canadians, and now omnibus Bill C-31 given Royal Assent by Canada’s Governor General and the FATCA IGA not even mentioned in the Conservative government’s press release.

Still so few know. How is this possible in a country that calls itself a democracy?

Canadians and International Friends! It’s now time to support our legal challenge! [UPDATE June 19, 2014: FATCA IGA enabling legislation is now the law of Canada]

So important that we find donors to join us to support the Challenge at http://www.adcs-adsc.ca/.

UPDATE, compliments of “Hazy”:

Royal Assent happened on June 19th. Here’s the June 20th press release from Finance:

http://www.fin.gc.ca/n14/14-085-eng.asp

No mention of FATCA in the press release. They must have forgot!

This is a post from my comment at another post here. (Some may not have seen that comment since there have been technical problems of some sort for several seeing comments on that thread).

Hansard Transcript, Canadian Senate Debates, June 18, 2014 brought interesting statements on the audacity of having to vote on so much that is in this (and other) omnibus bills, but Third Reading occurred.

And, now Bill C-31 will go to has been given Royal Assent by Canada’s Governor General. for Royal Assent. We may not know when until we read it in the Canadian media.

Too bad our media has essentially skipped the process before Royal Assent of another Canadian omnibus bill, that includes (among other things that other items therein should be separate bills on their own merit) implementation of the US FATCA intergovernmental agreement (IGA) that Canada signed with the US.

Update: The Canadian government forgot to mention implementation of the FATCA IGA in their press release. So, I guess we cannot blame the Canadian media for not reporting it — or can we?

Hon. Pierrette Ringuette expressed what most of us feel. Listen to her and her colleague, Hon. Céline Hervieux-Payette, who seconded her motion. Start at 4:27:30 (Pull the “indicator” to this point to listen.)

Also Senator Day stated earlier in this Senate Debate:

There’s another piece of legislation, still in Bill C-31, still under the rubric of privacy versus disclosure between agencies, and that relates to the Canada-U.S. agreement in Part 5 of this bill. Part 5 is what we talked about earlier on. Part 5, the Canada-United States Enhanced Tax Information Exchange Agreement, was an attempt by the government to avoid, to a degree, the oppression of earlier legislation that the United States had. We have all received many emails about having to make available — the banks have to go through a due process, and for any potential U.S. taxpayer, the information of all the accounts they have must be sent to the U.S.

Canada has entered into an agreement with the United States, and Part 5 deals exclusively with that, but this is one of those acts within an act. What really bothered me is that they want us to pass the act, at clause 99, that includes the words “as amended from time to time.” So we adopt a piece of legislation that adopts an agreement between Canada and the United States, and that agreement between Canada and the United States may, from time to time, be amended by the executive branch. We will not see that as legislators. We will not say, “That is far too oppressive on the people of Canada and Canadian citizens who might be doing business in the U.S. and therefore might become subject to U.S. tax payment requirements.”

You’ve just been named by your financial firm as a responsible officer under the US Foreign Account Tax Compliance Act, or FATCA for short.

Should you hand in your two-week notice, take the job in stride, or brace– and protect yourself – from hefty operational and legal liabilities?

Those are the decisions and options now faced by potential FROs, or thousands of high-ranking officials working outside the US, who have been tapped by their financial institutions to help comply with the controversial FATCA legislation.

FATCA Responsible Officers: Be Careful, Very Careful

What could be the consequences to a Responsible Officer making a false certification under FATCA?

PwC looks at building effective internal controls and processes to promote compliance and (RO) certification

Seems to me lots of money spent in set-up — there must be something to this implementation of FATCA IGAs in Canada and other foreign countries. Wonder how many new “Responsible Officers” job titles and opportunities have been added to the world’s foreign financial institutions, corporations and where that FRO would stand in the pecking order of Board of Directors, CEO, CFO, etc.

Not That Lisa brings to our attention: Foreign Account Tax Compliance Act Hurts Law-Abiding Americans Living Abroad

George agrees:

NTL, thats an important article from Heritage and it should garner publicity. Can we link to it on a side bar?

Not That Lisa says:

Yes, it is important because the Heritage Foundation is a major, well respected, conservative think tank. I hope Solomon Yue at Republicans Abroad is aware of this article. It might help to booster his platform within the party.

Anthony B. Kim is a Senior Policy Analyst for Economic Freedom in the Center for Trade and Economics, of the Institute for Economic Freedom and Opportunity, at The Heritage Foundation. Curtis S. Dubay is Research Fellow in Tax and Economic Policy in the Thomas A. Roe Institute for Economic Policy Studies of the Institute for Economic Freedom and Opportunity.

They start by saying:

On July 1, the Foreign Account Tax Compliance Act (FATCA) will fully take effect. FATCA is supposed to reduce tax evasion by making it harder for tax cheats to abuse tax havens. In practice, however, FATCA is forcing law-abiding American taxpayers residing overseas to bear enormous financial and legal burdens.

Congress should reform FATCA so that it does not hurt innocent Americans residing and working overseas. More important, Congress should turn its full attention to broader tax reform that would help curtail tax evasion in a more effective way without resorting to onerous and intrusive regulations such as FATCA.

From the CRA website (FAQs– FATCA):

6. Will my financial institution be asking me if I was born in the U.S.?

A financial institution complying with the Agreement will not be required to ask its account holders about their place of birth.

If a financial institution, applying the due diligence rules of the Agreement to its accounts, discovers any records connected to the account that have an unambiguous indication of a U.S. place of birth, the financial institution may treat the account as a reportable account or follow up with the account holder to obtain documentation that shows the account holder is not a U.S. resident or U.S. citizen.

A recent posting to IBS from BC Doc (from around the same time the servers went down):

RBC Direct Investing: The US Persons Round-Up:

I was helping a family member open an on-line investment account with RBC Direct Investments today. I couldn’t help but notice the many different ways RBC DI is trying to identify so-called “US Persons.”

Here are the questions asked by the on-line application:

Are you a U.S. Citizen or a U.S. resident for tax purposes?

If you answer yes, the next prompt is:

To comply with regulations, you will be presented with a W9 form with your application package.

Enter your US Social Security Number (SSN).

If you answer no, the next question is:

How many countries are you a resident of for tax purposes?

You are then asked:

Country of residence for tax purposes.

Next up is:

Enter your City of birth.

Followed by:

Enter your Country of birth.

Next up is:

Are you, the co-applicant, a U.S. Citizen or a U.S. resident for tax purposes?

If you answer yes, you are prompted to enter your US Social Security Number (SSN).

You also get the statement, “To comply with regulations, you will be presented with a W9 form with your application package.”

If you answer no, the next prompt is:

How many countries is the co-applicant a resident of for tax purposes?

This is followed by:

Co-applicant’s country of residence for tax purposes.

Co-applicant’s city of birth.

Co-applicant’s country of birth

Are you married or do you have a common-law spouse?

Is your spouse the joint applicant?

I think we can consider this a sign of things to come from Canadian banks and investment firms in the coming months. Forewarned is forearmed.

One more thing. A W-8BEN for is a part of the package. RBC-DI requires completion of the W-8BEN form so that Canadian citizens are given the more favourable 15% tax withholding by the US on their dividends (versus the standard 30% I believe if a W-8BEN is not completed). New on the W-8BEN are two questions:

City of Birth

Country of Birth

I have banked with RBC-DI since 2007. Prior W-8BEN forms did not ask city and country of birth.

The net has been cast!

My questions for today:

Why is RBC DI asking for country of birth if this information is not required by CRA?

If this information is not required, is it illegal for RBC DI to ask for it?

The questions about city of birth and country of birth on the W-8BEN appear to have been added by RBC DI. I don’t see these questions on the official IRS version of the W-8BEN.

Again, if this information is not required, is it legal for RBC-DI to ask?

George brings this to our attention:

The UK Government worked to include language about discrimination in the FATCA IGA.

j) The Financial Institution must not have policies or practices that
discriminate against opening or maintaining accounts for individuals
who are Specified US Persons and who are residents of the UK.

But was that nothing more than window dressing?

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“Anyone else getting the FATCA Call” (from MapleSandbox.ca)

Has anyone received the FATCA call from their bank, investment firm or other financial institution?

Johnnb posted the following under What’s New, but it definitely needs its own thread:

In a previous post I described how my wife and I decided to get our (backdated to 1973) CLNs. We applied in January of 2012 and the CLNs arrived in July 2012. We promptly made copies and gave one to our financial advisor at Scotia McLeod.

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March 27, 2014 “Congressional Research Service Report for Members and Committees of Congress” entitled “Reporting Foreign Financial Assets Under Titles 26 and 31: FATCA and FBAR”

Summary
All citizens of the United States as well as U.S. resident aliens are required to report their worldwide income for U.S. federal income tax purposes. However, where foreign assets are involved, this is an area in which taxpayers, knowingly or unknowingly, may fail to comply with the law.

There are numerous information reporting requirements involving foreign assets that may assist the Internal Revenue Service (IRS) in recognizing a failure to report foreign income; however, both taxpayers and tax preparers may not be fully compliant with filing these forms. Again, this may be more a matter of ignorance of the requirements than any intent to skirt the law.

Neither the reporting requirement imposed by the Foreign Account Tax Compliance Act (FATCA) nor the Foreign Bank Account Reporting (FBAR) imposed by the older Bank Secrecy Act directly involves reporting income for tax purposes. Instead, each involves reporting the existence of financial assets or accounts located outside of the United States. Although in some cases the same accounts or assets may be reported on each information-reporting form, both forms may be required. Failure to file either form if required may result in significant penalties, in some cases amounting to the entire balance of the unreported account or more. Continue reading →