I have been absent from the FATCA scene recently. I am back in the states and have been busy preparing to start the PCT hike next week trying to forget this madness. However, I had to fill out my FBAR before I left and file for a tax extension since I won’t be back until the first of September. Then I got two letters from my bank, one in NZ and one at our home back here in the States. It was from the “Foreign Revenue Enquiry Team” who are trying to “cure” their list of potential U.S. Persons.

For your information, here were their lead in paragraphs

“We are writing to ensure we have the latest foreign tax residency information for you as required under the Foreign Account Tax Compliance Act (FATCA).

The foreign Account Tax Compliance Tact is a law from the United States of American that recently came into force. The Act requires Foreign Financial Institutions or their governments to enter into an agreement with the US Internal Revenue Service to determine which accounts are held by US citizens and report certain information about their accounts.

Under an inter-government agreement between New Zealand and the US, all New Zealand Financial Institutions are required to comply with the FATCA legislation. As a New Zealand Financial Institution we are required to collect and retain details from our customers to determine whether they are citizens or tax residents of the US.”

……..(details about why they they had identified us)…………….

Important Information…
If we do not hear from you within 90 days, we will be required to send certain information relating to you and your accounts to the New Zealand Inland Revenue Department, as part of the inter-government agreement between NZ and the US. We recommend that you contact your accountant or tax advisor if you are unsure about your foreign tax obligations.”

Anyway, I don’t have much time to devote to this FATCA crap, as still a lot to get done before I leave, but couldn’t help but send this enclosed letter (copy below) along with my compliance. Does no good, but makes me feel better, and thought I would send along a copy for you if you are interested. I don’t have time to post on IBS, but if someone else wants to, they are more than welcome to use it or not. Just remove the names, thanks.

Continue reading →

Cross-posting from MapleSandbox.ca: FATCA Letter to Leaders and MPs.  Thanks for posting, Lynne!

I am happy this morning to cross-post today’s ADCS-ADSC blog entry…

“Repealing “Citizenship Taxation”: The difficult we do today, the impossible takes a little longer”.

which starts out with:

The Alliance For The Defence of Canadian Sovereignty is prosecuting a lawsuit against the Government of Canada. The lawsuit is for the purpose of “striking down Canada’s FATCA IGA”. The Canada FATCA IGA lawsuit is providing citizenship leadership and FATCA education for the world.

The primary purpose of FATCA is to enforce U.S. “citizenship taxation”. In reality, U.S. “citizenship taxation” is taxation based on the immutable characteristic of “place of birth”.

Although “citizenship taxation” may have always been U.S. law it has NOT always been U.S. practice. In fact, the U.S. made no attempt to enforce “citizenship taxation” until sometime after the 2008 financial crisis. The reasons for the enforcement are not entirely clear, but the enforcement of “citizenship taxation” has been a “life altering” event for Americans abroad. For Americans abroad, “citizenship taxation” is NOT a theoretical concept.  It is a reality that impacts on virtually every aspect of their lives. It directly affects their career opportunities, their retirement planning and (for those Americans with an “alien spouse”) their marriages. This has led to cries of anguish and pleas for change. It has led to a huge surge in the “relinquishments” of U.S. citizenship. On March 2, 2015 I participated in a session for U.S. citizens in London. A comment about the about the session and the recent enforcement of U.S. citizenship taxation included…

I would add that it was evident that some people at the meeting have suffered significant mental anguish, either now or in the past. These are good people, who had tried as US citizens to do the right thing, but who have been stymied by rules and complexities of the IRS code which, to paraphrase John, “no rational person would ever have suspected or guessed would remotely be true”.

I find the damage to mind and body to be one of the most heart-rending things about this whole mess. Someone wrote to me recently, “So I’m not alone in my panic!! Yeah, there’s been plenty of sleepless nights. Just can’t get it out of my head.” Many reading have had that experience.

I am waiting for the day that someone in government finally notices and apologies, perhaps admitting, “We tortured some folks.”

…

In the short term, the implementation of FATCA will exacerbate the “pain”. On the other hand, the “pain” may be the necessary impetus for change. In order for there to be “change”, there must be some discussion and analysis of the issue. In order for there to be analysis, there must be awareness of the problems of “citizenship taxation”. That’s the reality of what has been unleashed by FBAR, FATCA, PFIC, CFC and the whole “Alphabet Soup” list of provisions which have changed the lives of Americans abroad.

The good news is that awareness of “citizenship taxation” is growing. The awareness is “growing” largely because of the efforts of Americans abroad (including those who identify as Americans abroad and  “accidentals” who simply do NOT regard themselves as Americans). The following groups (working independently) have been responsible for this awareness:

…

John Richardson also introduces a new voice in commentary by Professor Daniel Shaviro:

9. It is encouraging to see that “citizenship taxation” is being considered in law school classes. Two recent examples include:

A. The tax policy and law workshops at the Peter A. Allard School of Law – University of  British Columbia. On Friday February 27, 2015, Professor Ruth Mason discussed her recent paper on “citizenship taxation”.

B. The Tax Policy and Public Finance Colloquium and Seminar run by Professors Daniel Shaviro and Alan Viard of NYU law school. On Tuesday March 3, 2015 Professor Ruth Mason was in attendance to discuss “citizenship taxation”.

Professor Daniel Shaviro commentary on the Ruth Mason presentation – March 4, 2015

Professor Shaviro’s perceptions of “citizenship taxation” (based largely on the Mason presentation) appear as a separate blog post here.

His post identifies (and categorizes) many of the “theoretical concerns” of “citizenship taxation”. He begins by saying:

Yesterday at the colloquium, Ruth Mason discussed her paper, Citizenship Taxation.  I enjoyed reading it enough to conclude that I may want to write about this topic as well.  (I generally agree with the paper, but it’s a rich topic and perhaps a fruitful area for me to deploy some of my interests and approaches.)

His post contains 10 interesting points. I would like to identify what I consider to be the most interesting and important two…

The John Richardson, ADCS-ADSC Co-Chair and Legal Counsel, ADCS-ADCS entry ends by saying:

U.S. “citizenship taxation” is a problem for:

1. The individuals affected by it.

2. The countries where U.S. citizens reside which are required to accept the capital outflows inflicted by “citizenship taxation”.

In 2009 few would have imagined that the problems of “citizenship taxation” would be given the attention that they are today.

As they say in the Marines:

“The difficult we do today. The impossible takes a bit longer.”

Keep up the great work! Keep the faith!

John Richardson

As submitted by two Brock commenters.   Our thanks to them …

and, once again, to Senator Rand Paul.

March 5, 2015 (Sputnik International) “Senator Rand Paul said that the Foreign Account Tax Compliance Act violates privacy rights of US citizens as well as has a bad effect on the American economy.”

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

This story is confirmed on Senator Rand’s website.

Mar 4, 2015

WASHINGTON, D.C. – Sen. Rand Paul today reintroduced S.663, a bill to repeal certain provisions of the Foreign Account Tax Compliance Act (FATCA) and put an end to a defective bill that does not accomplish its objective of ending tax evasion.

…

“FATCA is in complete violation of every Americans’ constitutional right to privacy and adds burdensome regulations that negatively impact our economy. It is a defective law which disregards  the mutual respect of sovereignty among nations and drains money from the federal treasury, on top of discouraging overseas investment in the United States. My bill will reverse the negative aspects FATCA has on the economy, prevent the government from bulk collecting U.S. Citizen’s financial data, and preserve the constitutional rights for all Americans,” Sen. Paul said.

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

UPDATE: March 5, 2015

AARO @aaro

AARO team met Wednesday with Senator Wicker (R-MS) who will co-sponsor Senator Paul’s “Repeal #FATCA” bill.

Bruce W. Bean,

Michigan State University – College of Law

AND

Abbey Wright Farnsworth,

Independent

February 25, 2015

ILSA Journal of International & Comparative Law, Vol. 21, No. 2, 2015

Abstract:

… two Canadians have filed a claim against the Canadian government asserting that the IGA entered into by the United States and Canada to implement FATCA violates several provisions of the Constitution of Canada,166 including Canada’s Charter of Rights and Freedoms, the Income Tax Act of Canada, and the Canada-U.S. Tax Treaty. The agreement requires Canadian FFIs to hand over information on qualifying accounts to Canadian tax authorities, who will in turn submit the information to the IRS.

… Additionally, there is concern that the agreement disregards the principle of maintaining sovereignty. The claimants and many other Americans living in Canada feel “entrapped in U.S. citizenship” and that their rights are being violated as they are “branded” potential tax evaders.

…The U.S. Government has taken a bold step with FATCA. The legislation is by far the most egregious example of extraterritorial overreach in history and has been harshly criticized by individuals and entities alike.

 **********************

(as most of the world’s countries and *foreign financial institutions*

submissively roll over for the U.S.A.)

http://www.law.ubc.ca/centre-business-law/cbl-events

The Tax Law and Policy Workshop is a seminar course open to both J.D. and LL.M. students, and meets twice a week.

The sessions with visiting speakers are held generally on Fridays from 1:30pm to 3:00pm in Room 122 of Allard Hall. Map / Allard Hall, University of British Columbia, 1822 East Mall, Vancouver BC

Scholars, students, and practitioners not enrolled in the course but who are interested in particular topics are welcome to attend the Friday sessions.

For further information, please contact the instructor of the course, Associate Professor Wei Cui, at cui@law.ubc.ca.

The paper being presented was just released:
http://www.law.nyu.edu/sites/default/files/upload_documents/Ruth%20Mason.pdf

February 27, Ruth Mason (from University of Virginia Law School): “Citizenship Taxation”

WSJ Expat, February 23, 2015, by Jonathan Lachowitz: Everything U.S. Expats Need to Know About IRS Tax Forms (But Were Afraid to Ask)

With one comment so far (comments open!):

Seriously, is this for real? American expats already declare and pay (higher) taxes wherever they are resident. Perhaps all this bureaucratic nonsense ought to be scrapped? It would not hurt America to bring herself into the 21st century world of residence-based taxation. The IRS would consequently become leaner or more effective by focussing on territorial taxation. An antiquated (19th century) tax policy called citizenship-based taxation should have been written in history books a long time ago…

**************
…which would lead one to agree: Virginia La Torre Jeker J.D, February 23, 2015: “Why the US Tax System Needs to Change”!

…Anon is apparently one of many hapless dual-nationals now caught in the big FAT(CA) trap. He’s obviously never filed a US tax return, is clueless about FBARs, SFFA’s reportable on Form 8938, PFICs, CFCs and all other variations of the US tax alphabet soup. Now, Anon’s local bank in Saudi Arabia (which is viewed as a “foreign” financial institution for US tax purposes) is probably asking him for a so-called “FATCA certification”. In all likelihood, the bank noticed that Anon’s Saudi passport listed a US birthplace. As part of the FATCA mandate imposed on this “foreign” bank, Anon must now “certify” his US status or provide evidence satisfactory to the bank that he is no longer a US person. Anon has probably done some investigating about FATCA and what it means to be a US citizen. Anon has just been given the shock of his life.

RBC Global Asset Management Inc. Announces New Offering of Passive Foreign Investment Company Reporting Statements for U.S. Taxpayers

TORONTO, November 5, 2014 – RBC Global Asset Management Inc. (RBC GAM Inc.) today announced that Passive Foreign Investment Company (PFIC) Annual Information Statements will be made available to U.S. taxpayer clients holding certain Canadian-domiciled funds that are part of the RBC GAM fund families. These statements will be available on more than 70 RBC Funds, PH&N Funds and RBC Private Pools (RBC GAM funds) for the 2014 tax year.

“As part of our continued effort to meet the evolving needs of our clients, we are pleased to provide PFIC reporting on a wide range of our investment solutions,” said Doug Coulter, president of RBC GAM Inc. “With this reporting available on more than 70 funds and private pools offered by RBC GAM Inc., investors have a robust line-up of options that provide them with the ability to apply the appropriate tax rules to their investments according to their status as U.S. taxpayers.”

The PFIC reports issued by RBC GAM Inc. will provide U.S. taxpayers with the option to elect to treat certain RBC GAM funds as Qualifying Electing Funds (QEFs) on their U.S. tax returns. This allows U.S. investors access to capital gains tax rates on their holdings of these funds and prevents the application of certain amounts of tax deficiency interest penalties.

For more information and to access the full list of RBC GAM funds that will have PFIC reporting, please visit: RBC Global Asset Management – Passive Foreign Investment Company

More information on how to access PFIC Annual Information Statements for RBC GAM funds will be communicated in early 2015.

Spread far and wide.

“We the people”: Your voice in the US government: https://petitions.whitehouse.gov/petition/tax-us-citizens-residency-and-not-citizenship-remove-fatca-requirements-we-already-pay-taxes-abroad/dwZ1c5wL

You can also comment at this CNBC International YouTube link — click on “YouTube” in the lower right-hand corner of this video …

Related for answers to this: WSJ Expat: When American Expats Don’t Want Their Kids to Have U.S. Citizenship

We appreciate that someone of your stature will have the media grab your story and write about the absurd (resident for taxation purposes) consequences for anyone who was born an *Accidental American* or anyone who made a choice to move outside the USA for work, for adventure, for falling in love with another country and someone from there, deciding to remain to raise their family and give their allegiance and tax dollars for services and benefits.

Thank you for letting the world know the absurdity of the consequences of US Citizenship-Based Taxation law as *US Persons* are game in countries that practice Residence-Based Taxation law, we who have some US-definition of *US Person* or citizenship, as our countries have signed intergovernmental agreements (IGAs) with the US that allow US FATCA law to override our own countries’ laws.

Perhaps will be mentioned the others who will also be affected, including those who are considering becoming permanent residents of the land of the free, those seeking US green cards, so they will make their decisions with full knowledge of both pro’s and consequences of US CBT.

Boris Johnson ‘intends to renounce US citizenship’

Good luck to you as we read of your way to freedom as your “commitment is, and always has been, to Britain”.

…and Forbes, Robert Wood, comments open: Savvy London Mayor Boris Johnson Paid IRS, Is Now Renouncing U.S. Citizenship

Update: new article and Brocker comments at The Economist, February 21, 2015 The long arm of the IRS: An Englishman’s home, The mayor of London renounces his American citizenship