Since it is now July, and hotter than a cat on a tinfoil hat, this story may make your temperature rise:
We’ll have an update on July – never mind, just watch the video.
Category Archives: Issues regarding US persons abroad
FATCA Dutch treaty
http://www.lexology.com/library/detail.aspx?g=d35c2f66-5a6d-4612-8a44-a5b507a755d3
Implementation of the FATCA Treaty
The Dutch Ministry of Finance has launched a consultation on a decree implementing the FATCA Treaty. The decree requires Dutch financial institutions to provide information about bank accounts of US tax subjects, and to report financial institutions that do not comply with their FATCA obligations.
The Netherlands and the United States entered into a treaty on the implementation of the FATCA Treaty in December 2013. A bill providing for the ratification of the treaty will be submitted to parliament shortly.
Perhaps someone from the Dutch government should have a little chat with Allison Christians.
CBC Radio Ottawa “All In A Day” July 4th interview with Allison Christians and Kathleen
The excellent interview by All In A Day’s host Alan Neal with Allison Christians and Kathleen:
WSJ, July 9, 2014, David Kuenzi: “American Expats’ Tax Nightmare”
Comments on this excellent article here and there at Isaac Brock, so will heed “JC” request to post:
The Canadian-US tax treaty covers all aspects of taxation between the two countries. The current treaty cedes Canadian sovereignty to the U.S. and permission to double tax by not specifying exemptions such as for retirement accounts, the family home, life insurance, mutual funds, outrageous noncompliance penalties for Canadian tax residents, etc.
Everyone: there is a highly relevant new article here in regards to the injustice that has not had sufficient attention on this website: WSJ, David Kuenzi: American Expats Tax Nghtmare.
Or, if you have cannot access, the article is here
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Note: David Kuenzi, Certified Financial Planner,® Founder, Thun Financial Advisors, Madison, WI spoke at the May 2, 2014 Toronto Forum Debate on CBT vs RBT (we’re still awaiting an ACA video of this forum).
British Virgin Islands Premier says FATCA is “universal law”
http://www.islandsun.com/inter-governmental-agreement-simplifies-fatcas-compliance-premier-says/
Well, you don’t get much bigger than the entire universe:
“The signing of the FATCA IGA is universal… Also, contrary to what others claim, this is not about selling out anything,” Premier Dr. the Hon. D. Orlando Smith announced during a press briefing on 8 July. The BVI Leader made the comment as he announced that Government signed a Model 1B intergovernmental agreement (IGA) in relation to the United States (US) Foreign Account Tax Compliance Act (FATCA) on June 30.
Dr. Smith explained that FATCA is a United States federal law that is universal, and requires United States persons living outside the United States to report, among other things, their income to the US Government.
The BVI Leader further defended the decision to sign on to FATCA by stating: “I said this before and I will say it again, we are doing merely what a responsible government should do: one, alleviate the burden on its citizens to comply with this universal law; and two, protect our financial services industry by helping the financial institutions to comply with this obligation.”
We’ve been saying for some time that the IRS seeks to tax US Persons no matter where in the universe they live. This appears to be the first time that a government official anywhere on this insignificant planet has confirmed this fact on-the-record.
MUST READ for *US Persons* in their OMG Moment (cross-post from MapleSandbox.ca)
OMG! IRS Wants Me!
We have all had our OMG Moment. Now that the FATCA rollout has begun, there will be many more “OMG Moments”. This past weekend, I heard about a particularly egregious, frightening and unfair situation (yes, some are worse than others). In response to this, John Richardson suggested that I post the following:
If you are newly in your OMG Moment, we hope this will help.You are among friends here. Thanks John!
Have you just been told that you are required to file U.S. tax returns?
I am hearing more and more reports of people having their OMG (“Oh My God”) Moment where they are hearing for the first time that they may be required to file U.S. tax returns.
You are experiencing one of the most terrifying, confusing and disorienting moments that you will ever have in your life. The range of emotions you are feeling are so difficult to manage that you are having difficulty responding.
Some simple advice.
1. You are NOT in a position to make any quick “commitments” which are NOT REASONED decisions but are REACTIONS to a frightening and confusing situation.
2. Only “U.S. persons” are required to file U.S. tax returns. You may NOT be one. Your first step is to take steps to determine your citizenship status.
A. Being born in the U.S. is NOT conclusive proof of U.S. citizenship. You may have relinquished it along the way.
B.There is NO presumption whatsoever that somebody born outside the U.S. is a U.S. citizen.
3. Since you have not been in the U.S. tax system you do NOT have a tax problem. Therefore you do NOT begin by calling an accountant/tax preparer/tax lawyer. (Once you are in the U.S. tax system you will be rewarded with “tax problems”. At the moment you have a “possible compliance” problem (if it determined that you are a U.S. person).
Accountants, tax preparers, your bank and the vast majority of lawyers are NOT qualified to advise you on the starting question:
“Are you in fact a U.S. person?”
4. The advice “What To Do Before Contacting A Lawyer” is important and applies to to contacting accountants as well.
5. You are NOT alone. Estimates are that there are at least one million Canadian citizens affected by this injustice and unfairness. Remember that you are NOT alone.
6. You have done NOTHING WRONG. The U.S. has never made any effort to educate Canadians of U.S. origin that their laws levy taxes on the basis of citizenship and those born in the U.S. begin life as U.S. citizens.
You did NOT choose where you were born.
Being born in the U.S. means that you started life as a U.S. citizen. You may have relinquished U.S. citizenship.
7. Information sessions are available to you that you can attend anonymously at a very small fee.
The dog ate my homework: Using IRS’ own strategies to file one’s tax returns
Zerohedge offers US expats a new strategy for filing:
Just remember, the US courts have decided on the basis of the Required Records Doctrine that you can’t plead the 5th Amendment with regard to the FBAR. Of course, FATCA obliterates your 4th Amendment and Canadian Charter Rights as well. Could this be hypocrisy?
Angela Merkel has more cojones than Stephen Harper
Germany Just Kicked Out The CIA’s Berlin Station Chief
Now she should kick out the US consulates in Germany, just as Canada is about to expel the Eritrean consulate. Why? For the same reason: the US collection of extra-territorial against alleged US citizens in other countries. The USA is a bad neighbor and a bad ally and has proven that with the imposition of FATCA on every nation in the world–with warlike sanctions as the consequence of not yielding to the demands FATCA.
IRS releases updated FFI list — poor countries falling behind
Last Wednesday, the IRS released the latest version of its database of GIINs for Foreign Financial Institutions, updated to 24 June. It contains 87,993 entries, up by only about ten thousand from last month. This minor increase doesn’t exactly look like a vote of confidence by the financial sector, especially when compared to estimates of hundreds of thousands of entities that might fall under FATCA’s definition of FFIs.
Furthermore, poorer countries are falling behind (not that the U.S. cares about the collateral damage it’s causing them or anyone else). Some back-of-the-envelope calculations (jump to table) suggest that, below a certain threshold of both total bank size and per-depositor funds, some banks simply don’t have the resources to comply with FATCA — and so, unsurprisingly, only a small proportion of institutions in low-income countries have signed FFI agreements. In Malawi, for example, it looks like only a quarter of the banks with SWIFT codes are in the FFI list.
In fact, about a dozen countries still have no FFIs registered at all. Ironically, one of them is Eritrea, the U.S.’ sole fellow believer in the ideology of imposing universal, unending taxation on emigrants.
Stunning hypocrisy: Canada threatens closure of Eritrean consulate over diaspora tax
Only one week after ushering-in FATCA on Canada Day, Canada’s government is warning the Eritrean consulate to stop harassing Eritrean-Canadians or risk closure of its consulate. Foreign Affairs Minister John Baird made the announcement today in Ottawa (be sure to watch the video as well):
John Baird warns Eritrean consulate over ‘diaspora tax’
Foreign Affairs Minister John Baird says he has sent a message to the Eritrean consulate to stop collecting a “diaspora tax” from Eritrean-Canadians here or he will order the African nation’s consulate closed.
In response to a question from a reporter in Toronto, Baird said the practice of requiring Eritrean-Canadians to pay a tax at the consulate is “unacceptable.”
“We share the deep concern that Eritrean-Canadians, and others, have for the work that has gone on at the consulate. We’ve repeatedly sent out strong signals that is unacceptable, it’s wrong and will not be tolerated,” Baird said.
“I gave instructions to my deputy minister several days ago to very clearly and unequivocally deliver a strong message that this activity must cease and desist, and if it doesn’t we will close the consulate,” Baird said.
Baird said the messages were sent in “recent days” but did not specify when a shutdown of the consulate might occur.
This is just the most recent action Baird has taken against Eritrean officials in Canada over the practice of requiring expatriates to pay what the UN has condemned as a worldwide “diaspora tax” on its nationals, valued at two per cent of their income. Last year, Baird expelled consul general Semere Ghebremariam O. Micael.
Eritreans here have complained that if they don’t pay the tax, their families back home will suffer consequences.
Fair enough to say that this is certainly one of the most egregiously hypocritical moves the Conservative government has ever made – and there have been far too many to count over the years. I would love to hear Mr. Baird explain to Canadians how it is acceptable for the United States to impose its infinitely more invasive extraterritorial tax laws in Canada but Eritrea’s paltry amateur-hour 2% shakedown warrants impending closure of its consulate? Could it be that Mr. Baird is in fact preparing a subsequent announcement that he will be ordering the immediate closure of the US Embassy as well? Should we give him the benefit of the doubt?
Unfortunately, it does not appear that commenting is possible with this article. No doubt this story will soon be reported in other outlets so we should all be ready to dig-in.
UPDATE: Just to be clear, in light of recent comments, whatever the relative differences in scope, scale or sophistication between the Eritrean and U.S. versions of citizenship-based taxation; both are repugnant, immoral and indefensible practices. Both countries should hang their heads in shame for even pretending that CBT can ever be justified. The diasporas of both countries should find plenty of common ground here, despite the taunting and ignorance we both have to put up with from so many of our “homelander” cousins.