How might this Supreme Court decision apply to Canada’s banks (and provincial financial institutions) with Bill C-31 legislation implementing the IGA that Canada signed with the US re FATCA?
Category Archives: Issues regarding US persons abroad
If 1% of homelanders pay 46% of income taxes and no VAT, it’s no wonder U.S. has an Exit Tax
Inequality and the narrowing tax base: Too reliant on the few http://t.co/ik4nlmoneO – In US: 40% pay no income tax – 1% pay 46% of all tax
— U.S. Citizen Abroad (@USCitizenAbroad) September 23, 2014
The above tweet references an article in The Economist magazine (which is British).
This is a great article. I strongly recommend you add some comments.
The article begins with:
“I LIKE to pay taxes,” said Oliver Wendell Holmes. “With them I buy civilisation.” Most people recognise that taxes pay for public services, but few are as keen to stump up for them as Justice Holmes was. High income taxes tend to discourage effort and entrepreneurship, while encouraging all manner of activity to avoid them. That is why a basic principle of good tax policy has long been to charge a low rate over a broad base.
It is a target which many countries miss, and the gap is growing. Income taxes—one of the main sources of tax revenue across the rich world—are increasingly paid by a small minority of the most affluent. In Britain, employment has risen by 1.3m in the past five years, but the number of taxpayers has fallen by 2.2m. More than 40% of American households pay no income tax. In contrast, the most highly paid 1% of workers in Britain pay 28% of all income tax, while in America it is 46%. In 1979 those shares were 11% and 18% respectively. Corporate income taxes show the same concentration. In Britain just 830 firms pay almost half of all corporation tax. Five American industries account for 81% of the country’s corporate tax revenue, but just a third of its companies.
Solving US Citizenship Problems-Info Session-Niagara Falls ON-Tuesday Nov 11, 2014
Presenter: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar. Citizenshipsolutions.ca
Where: McBain Community Centre – Room A – 7150 Montrose Rd., Niagara Falls, Ontario L2H 3N3 MAP
When: Tuesday, November 11, 2014, 8:00 – 10:00 pm
Admission: $20 individual or $40 for a family of up to four people. Payable in cash at the door, please (to cover costs). Hope to see you and your families on November 11. Spread the word!
It is estimated there are 7 million U.S. citizens living outside the United States. Some of these people don’t know that the U.S. may consider them to be citizens. The vast majority of these Americans abroad (according to U.S. law), are required to pay taxes and complete information reporting forms to the United States. Although “citizenship-based” taxation has existed for years, what is new, is the enforcement.
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Please @PMHarper say it isn’t so – Canada is not really a world leader in #FATCA?
@VLJeker Can this really be true? Only 5 #FATCA IGAs are actually in operation? These 5, including Canada are the true world FATCA leaders
— U.S. Citizen Abroad (@USCitizenAbroad) September 23, 2014
The above tweet references a post by Virginia La Torre Jeker. The post is a dispassionate look at FATCA compliance and notes that of the 49 IGAs signed only 5 IGAs are actually operational – that is in force.
Think of it: 5 FATCA IGAs in force and Canada, with 10% of its population affected, is one of the 5!
Please tell me that these people did this because they didn’t know what they were doing.
Seems to me that there are now two options:
1. Buy shares in Canada’s banks – they run the country.
2. Support the FATCA Lawsuit launched by Canada’s grass roots “Alliance For The Defence of Canadian Sovereignty“. Someone must defend Canada. It’s clear the Harper Government won’t.
Perhaps, somebody could by way of comment list who the other 4 FATCA collaborators are.
The widening gap for the cost of freedom from US citizenship and US tax compliance
UPDATE: September 23, 2014, from JC comment, additional to The_Animal’s original list:
The injustice is even worse than presented:
a) Canadian Welfare payments are considered taxable by the US in Canadian Government POV
b) Canadian Disability payments are considered taxable by the US in Canadian Government POV
c) Canadian Employment Insurance is considered taxable by US in Canadian Government POV
d) Canadian Worker’s Compensation is considered taxable by US in Canadian Government POV
e) Canadian Child Support Payments are considered taxable by US in Canadian Government POV
f) Canadian Child Tax Benefit payments are considered taxable by US in Canadian Government POVThe Canadian-US Tax Treaty is an abomination to embody the point of view of the Canadian government, that Canadian government assistance to families is taxable U.S. income. These areas above should have been explicitly exempted from U.S. tax in the tax treaty. Without the exemption, there is no clearer case of US government infringement on Canadian sovereignty.
I believe this subject is so very important. These are the families I, too, worry about the most — and, believe me, I worry about ALL *US Person* families. For these families, how will they ever have enough for the US citizenship renunciation fee, let alone the cost of compliance either to remain a US citizen abroad or to check out of the USA properly? How will many even understand all of the complexity? Who at a US Consulate OR what Canadian MP, who must take responsibility in subjecting persons to this by not standing up for these *US Person* Canadians, their rights waived by the signing of an intergovernmental agreement for FATCA with the US Treasury, will assist these low-income persons?
From The_Animal, put into this post to be further discussed in comments.
How FATCA will impact those of modest means (low income families).
Homelanders like to trumpet the fact that we have an “foreign earned income exemption” of 97,000. Unfortunately, the trump card is the “earned income” classification. Earned income means pay checks from an employer. So what does that do to most sources of income for those expats of low-income or on social assistance?
a) Welfare payments are not considered “earned income” in IRS’s POV.
b) Disability payments are not considered “earned income” in IRS’s POV
c) Employment Insurance is not considered “earned income” in IRS’s POV
d) Worker’s Compensation is not considered “earned income” in IRS’s POV
e) Child Support Payments are not considered “earned income” in IRS’s POV
f) Canada Child Tax Benefit payments are not considered “earned income” in IRS’s point of view.So all of these are taxed by the United States Internal Revenue Service in its overreaching grasp. Since most expats of modest means have a corresponding lack of education, they are furthermore hindered by not being able to understand the intricacies of the US tax system. Furthermore they do not have the monetary resources to get into compliance as their choice is between putting food on the table for their families or starving and coming into compliance.
Secondly all accounts that are not disclosed by means of an FBAR are subject to a financial penalty of $10,000 per account that is not considered wilful non-disclosure – the penalty for wilful is $100,000 or 50% of one’s account balance, whichever is greater. How is someone who makes $18,000 per annum supposed to come up with $10,000 for a non-wilful penalty let alone $100,000 (if the whim of the IRS is that the account-holder is a wilful non-disclosure)? For these families there is no financial safety net to dip into. For these people there is not a single way to come into compliance that would not wreak financial ruin on the family.
“There has to be a better way” is the constant refrain that I’ve been hearing from everyone. Unfortunately there is NO way for those of low-income to even think of coming into “compliance”.
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From a comment I made this morning, the portion pertaining to low income persons who have Canadian Registered Disability Savings Plans: https://isaacbrocksociety.ca/2014/06/01/its-time/comment-page-72/#comment-3097016
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John Richardson interviewed by Dave Popowich on CHQR’s “More Than Money”
Dave Popowich, host of “More Than Money”, interviews John Richardson on CHQR News Talk 770, Calgary, Alberta, September 20, 2014.
Another great discussion about FATCA, the Canadian IGA and the Charter challenge by ADCS. John was also recently interviewed by CHQR’s Dave Taylor.
Charles Adams “For Good And Evil” – The Impact of Taxes On The Course Of Civilization
The following tweet references a post on the RenounceUScitizenship blog.
Here are some of what Charles Adams considers to be the 27 lessons from the history of taxation (page 452 of the first edition of his book: “For Good and Evil – The Impact of Taxes On The Course of Civilization“):
11. If liberty is to be defended with success against the dominance of the state, then financial privacy must be preserved. Banking privacy is one the cornerstones of liberty, having its roots in the principle of early English Law that a man’s castle (primarily his treasury) is beyond he surveillance of the king.
24. Taxes that are not apportioned among all taxpayers with impartiality and fairness lose all force of moral obligation.
Mr. Adams was writing in 1993 before FATCA and the “FBAR Fundraiser“.
Charles Adams “For Good And Evil” – The Impact of Taxes On The Course Of Civilization http://t.co/tqc2V6pPNB
— U.S. Citizen Abroad (@USCitizenAbroad) September 21, 2014
Charles Adams "For Good and Evil – Impact of Taxes on Civilization" https://t.co/rbSUz7ohUD – Very impressive and very understandable.
— U.S. Citizen Abroad (@USCitizenAbroad) September 21, 2014
The above tweet references a YouTube video series, made by the Mises Institute, featuring tax historian Charles Adams (who incidentally taught at the University of Toronto).
The series is based on his book:
For Good and Evil – The Impact of Taxes on the Course of Civilization.
The lectures are described by the Mises Institute as follows:
Solving US Citizenship Problems Info Session – Paris – Enfin à Paris ! – Cancelled
This meeting has been cancelled.
In lieu of a public meeting, John Richardson will be available for appointments on Sunday, October 5, from 2:00 – 4:00 pm and on Monday, October 6, from 7:00 – 9:00 pm. Please confirm no later than Saturday, October 4, 2:00 pm EDT.
Toronto Phone Number 416 840 4529
Skype – “CitizenshipSolutions”
Citizenshipsolutions.ca
Finally in Paris! An information evening will be held on Mondayy, 06 October on the harsh reality of French citizens who also have American citizenship and its obligations to the IRS. Sign up!
Enfin à Paris ! Une soirée d’information se tiendra le 06 octobre prochain sur la dure réalité des Français ayant aussi la citoyenneté américaine et leurs obligations envers l’IRS. Inscrivez-vous !
Details/Détails TBA – 6:00-8:00 pm CET
Ottawa Brock Lunch – Saturday 4 October
We’ll be getting together for lunch Saturday, 4 October, at 2:00 pm at Boston Pizza, 1055 St. Laurent Boulevard, Ottawa (between Donald and Queen Mary, free on-site parking).
We’re currently expecting about 10 people — hope you can come too! Please rsvp by posting a comment here or e-mail me at pacifica@isaacbrocksociety.ca
Is TD Bank overzealously ferreting out US persons?
Originally, my understanding was that existing customers would not be signaled under FATCA regulations unless their accounts were over $50,000. Yesterday, I spoke with a woman whose accounts never exceed $10,000 in aggregate. Furthermore, she is a young mother who hasn’t worked much in the last few years since coming to Canada, and so she has never had an IRS tax liability, as her income would be well below the Foreign Earned Income Exemption. She holds her accounts jointly with her Canadian-only husband. This case highlights why we need the legal action of ADSC.
Yesterday she received the following correspondence from her bank. It shows that they have determined that she has US indicia. They have threatened her with reporting her accounts to the CRA in violation of section 8 of the Canadian Charter of Rights, which would require the CRA to obtain a warrant before seizing her account information. But now the TD Bank has threatened to transfer her account information to the CRA. But what crime has she committed that the TD has threatened this action? None at all.
I have recommended that she do nothing–not fill out the self-certification form. But I’d like to hear what others think. Please discuss.
