Author Archives: Stephen Kish

[“American Citizens Abroad (ACA)with 40 years of advocacy on this issue, has led the charge for RBT, proposing a roadmap or outline to Congress showing them how they can get from where the US tax regime is today to where it should be with RBT”.] — From a Forbes article

My reading of the ACA proposal is that it is a “Roadmap to IRS compliance”.

— This post is another opportunity to tell American Citizens Abroad (ACA) what should go into their residence-based taxation proposal. Should you be interested, I am asking for your comments in the form of text that could be included in the ACA proposal.

The discussion with ACA is, in part, whether, to obtain a “departure certificate” (get out of jail card) it makes any sense for a person living permanently outside the U.S., who has:

—no meaningful relationship with the U.S. other than by birth or parentage,
—another citizenship from his/her local country,
—and who does not want to be a U.S. person;

should suffer ANY IRS compliance cost and uncertainty (see the correspondence below).

— First, I suggest that you read the ACA RBT proposal.

— Then read my question followed by a response from Mr. Charles Bruce, on behalf of ACA.

Questions include whether non-meaningful/”accidentals” should be mentioned, or not, in the ACA document as a distinct group. Should persons with no meaningful relationship to U.S. be treated differently than consenting, “real” Americans? Is it reasonable or not that anyone should require a departure certificate? The ACA Roadmap requires all affected to enter into some IRS compliance (and potential harm): Can this be morally justified?

I asked ACA the following question:

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OCTOBER 1, 2017 Canadian FATCA IGA legislation litigation update.

In addition to sending letters to a foreign country, some of us, with a lot of support, are engaged in suing our own country, the Government of Canada, in Federal Court for rounding up Canadians having a U.S. taint and turning them over to a foreign government. We argue that this violates Canada’s sovereignty as an independent nation and its Charter of Rights that is meant to protect all Canadians.

This is just a minor update for this long (since 2014) litigation. Basically we are now in a temporary holding patter waiting for a response from Government:

Plaintiff activities. Both Gwen and Kazia, our heroines, have now been subjected to oral examination by Government lawyers (and are OK).

Litigator change. Our retainer contract for legal services is with the Vancouver law firm of Farris, Vaughan, Wills and Murphy. This has not changed. One of our litigators, Mr. Joe Arvay, has left (as of today) Farris for a smaller firm. Our Board has decided to remain with Farris where we will be well-represented by the lawyers there who have long been working on our case: David Gruber and Arden Beddoes.

Waiting for Government response. I would really like to give you now a sketch of next activities and timelines, but can’t.

We are now at a stage in which we cannot proceed until the Government responds to our repeated requests as to the procedures Canada will require before our trial on the charter-constitutional issues can be heard. Until we hear from Canada it is not possible to predict the litigation steps for the next several months — since the ball is really in Canada’s court.

I am hopeful that we will receive a response from Government in the next few weeks or so, and then I can provide you with a more meaningful update.

Sorry for the slow pace of litigation, but we do move forward.

For the Alliance for the Defence of Canadian Sovereignty Board,

Stephen Kish

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[OCTOBER 1 UPDATE: THANKS EVERYONE WHO SENT LETTERS!]

Today is the very last day to support — by your letter and petition — a Republicans Overseas (RO)/RNC proposal that would replace citizenship-based taxation with a form of “territorial taxation”.

Info is at this website: https://republicansoverseas.com/territorial-taxation-individuals/#petition

RO’s Solomon and Michael will personally bring the letters and petition to the White House on October 2, but they need to receive everything by September 30 — WHICH IS TODAY.

USCA suggests that you consider:

“…The comments in this thread have reflected a diverse collection of views. The RO proposal has been severely criticized for various reasons (mostly revolving around the taxation of nonresident aliens). It’s true that the RO proposal has many flaws.

That said, I think it’s important to recognize in broad terms, that the RO proposal that will change the impact of CBT as it currently stands. In that respect the proposal is at least a start and that start is described as “Territorial Taxation For Individuals”. It is possible (and I think advisable) to support the broad principle of changing CBT without necessarily agreeing with every aspect (or any aspect) of the specific RO proposal. Some of you may have read the most recent ACA proposal which does a good and interesting job of explaining what “territorial taxation” (borrowing from the language of the RO proposal) could mean for individuals. (Interestingly what “territorial taxation” COULD mean for individuals is what most of us think of as “residence-based taxation…)

I am simply trying to argue that change will require education. Education will require engagement. Engagement requires personal interaction.

Your sending a letter and/or signing the petition will help RO achieve the personal interaction that they need to engage and educate. If you care about this issue at all, then you must participate.

I don’t believe that the mere fact of sending letters or signing petitions will make a difference. But, I do believe that WITHOUT YOUR EFFORTS and support that NO CHANGE IS POSSIBLE. Therefore, you are really deciding whether you want to act in a way that makes change possible or if you choose to act in a way that makes change not possible. It’s your choice. This is NOT about supporting a specific proposal. This is about behaving in a way that opens the door to discussion in change.

If it matters, I am not a Republican. I am not a Democrat. To the extent that I am political, I would be an independent. I am not primarily a U.S. citizen. So, these comments are not partisan. But, I am deeply committed to the struggle to getting these unjust laws changed. Furthermore, I believe that change can happen ONLY if all those affected create a united front in opposition to CBT. It is the opposition to CBT that unites ALL Americans abroad.

It’s very simple really. Where laws are made through a democratic process: If you don’t make your view known you can’t expect change.

Your participation may or may not make a difference. But, your NONPARTICIPATION will make a difference because it will ensure that no change will happen….”

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See the U.S. Constitutional analysis of FATCA article Neill has found.

From the document:

“…The FATCA reporting requirements arguably resemble that of a general search warrant. It was enacted in order to curb tax evasion of U.S. citizens using foreign accounts.

However, while the information reported can be useful to the IRS in confirming the income reported by individuals, there are no particularized suspicions in collecting this information from every foreign U.S. account.

Doing so assumes that every U.S. citizen with a foreign account is a “crook” evading his taxes.201

Additionally, the searches at hand contain the potential for abuse. This is due to the “access to this information without invocation of the judicial process.”202

The scrutiny of a neutral magistrate helps to balance societal and individual interests in the collection of the information at hand.203

Without a warrant issued through the judicial process, the search is an unreasonable violation of the individual account holders’ Fourth Amendment rights…”

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This is an update on our FATCA IGA legislation lawsuit in Canada Federal Court.

The Court ordered (May 31, 2017) that Plaintiffs provide:

— Additional personal, detailed documents related to their financial affairs. [Our litigators felt that this request was not relevant to the lawsuit or of tenuous relevance to the issues raised in the action, but Court disagreed.] Plaintiffs have now provided to the Defendants the financial documents and the Court has ruled that these documents will be kept confidential.; and

— A list of harms that the Plaintiffs know and allege have already occurred or certainly will occur. [Description of harms that might occur will be provided in a later submission.}

The harms listed in the submission are generally those detailed by the Witnesses. I am not going to provide the names of the Witnesses associated with their particular situations, but show below a brief summary of some of their harms without names disclosed.

SELECTED HARMS:

— Harm associated with sharing of account information with United States. Plaintiffs allege that financial accounts of Canadians have been shared with United States and that this constitutes a harm. However, with one exception (name of person who received confirmation of turnover from Revenue Minister listed in document) Plaintiffs have no direct knowledge whether their own account information has been turned over nor do they know names of those who have had their accounts turned over — that information is in Canada’s possession.

To the extent that these financial documents have been turned over, Plaintiffs allege that this violates their right to the security of person shrined in section 7 of Charter and the protection of Canadian sovereignty, and is a violation of section 15 of Charter.

Other Witness and Plaintiff harms (not all Witnesses or harms are listed below):

— Business Person who is Canadian and U.S. citizen. Would-be Canadian partners are unwilling to have potential financial and shareholder information disclosed to U.S.

— Canadian and U.S. citizen harmed by U.S. IRS PFIC costs taxing away gains. To eliminate harm she had to spend monies to renounce U.S. tax citizenship. Suffered psychological harm when filing forms with FINCEN, knowing possibility of large fines if there were ever to be an erroneous mistake. She feels as if she is guilty of a crime she has not committed until proven innocent.

— Canadian and U.S. citizen on disability harmed by U.S. personhood. On disability benefits, can’t afford to become IRS compliant or renounce U.S. tax citizenship. Not being compliant with IRS exacerbated psychological harm associated with precarious financial situation. This has created conflict within family as he is unable to speak to family member about situation without family member becoming upset.

— Canadian citizen mother trying to protect incapacitated son deemed only by the U.S. to be U.S. tax citizen. She has suffered psychological harm insofar as she has had her peace of mind taken away and has difficulty carrying on with normal life because she is unsure of her son’s wellbeing in future after she passes away. Has resulted in breakdown of relations within family.

— Pure Canadian spouse of Canadian citizen who is deemed to be a U.S. person only by the U.S. Spouse received bank letter asking citizenship question on account with U.S.-tainted wife. This places spouse at disadvantage compared to those not married to persons deemed to be U.S. citizens.

— Canadian citizen and formerly person deemed to be a U.S. citizen. Business partners expressed feelings that she compromised their business by sharing financial information with U.S. To escape harm she paid the costs to renounce U.S. citizenship. Feels that Canada has treated her as second class citizen.

— Canadian citizen deemed ONLY by U.S. to be U.S. citizen having entity account. As part of the roundup in Canada of all Canadian citizen “entity” account holders who have U.S. taint, she received letter from bank asking for information on citizenship…

— No CLN, we freeze your account Canadian citizen – deemed by U.S. to be U.S. citizen. It is sometimes claimed that Canadian financial institutions do not freeze accounts if there is a FATCA problem. Not true. This unfortunate Canadian citizen had her account frozen because her proof of no U.S. taint was not good enough: She lacked a CLN (Certificate of Loss of Nationality) that her bank required.

— Infant receives request from bank to provide information on birth place and U.S. citizenship in order to continue holding account. [Self-explanatory.]

Other: Psychological harms are mentioned including feeling betrayed by the Canadian government, stress and frustration associated with the financial harm, and harm by simply not knowing whether or when their financial account information will be shared with the United States.

—– The brave Plaintiffs and Witnesses are my heroes for standing up for Canada and its sovereignty. I thank the other Canadians who also bravely volunteered, but were not selected.

—– NEXT STEP: In oral testimony Plaintiffs will be examined by Government attorneys, beginning with Gwen at the end of this month…

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We already have Witnesses for our Canadian FATCA IGA lawsuit, but are now seeking a few more. If you are a Canadian who supports the major aim of the lawsuit (to return Canadian sovereignty back to Canada) and are interested, see below:

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As part of our FATCA IGA litigation in Canada’s Federal Court, Our three Plaintiffs previously provided financial information to the Government lawyers on their accounts. However, Government submitted a motion to compel Plaintiffs to provide additional very detailed financial information.

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