Category Archives: Issues regarding US persons abroad

U.S. tax law could ensnare unsuspecting Canadians

American expats (CANADIANS who are now referred to by the Harper government as “Americans who happen to reside in Canada” / “US taxpayers in Canada”) are planning a charter challenge of an agreement that takes effect in July, requiring Canada’s tax department to forward information from banks about their clients’ U.S. connections to the U.S. Internal Revenue Service.

I cannot comment as I do not “do” Facebook. I will send my Letter to the Editor. It will go something like this:

Gwen, thank you for being interviewed and reporting Edmonton’s information session on the problem of US citizenship-based taxation law for Canadians who are deemed US Persons in Canada.

The intergovernmental agreement that Canada has negotiated and signed with the US to bring this foreign law into our formerly sovereign country has been hidden and is now in the process of approval of legislation to implement starting July 1, 2014. This is a result of US citizenship-based taxation law — the rest of the world, including Canada, taxes on residence — that taxes and account reporting is for the country in which a person lives, works, receives benefits. The US is searching for US Persons the world over — and it is not about taxes owed but rather about the horrendous penalties for not having known. Those deemed US Persons are being criminalized by the US coming into every country in the world. The tax evaders the US looks for reside, for the most part, in the US and send their untaxed money offshore. Canada is considered offshore and Canadians deemed US Persons are deemed to have foreign (offshore) accounts even though they are to us local Canadian accounts in our banks, credit unions and insurance companies. Spouses, children and business partners can be as affected as the deemed US Person. And, so can the many Canadian snowbirds if they snowbird outside the US rules and required yearly compliance forms.

This will set a precedent that the rights under the Canadian Charter of Rights and Freedoms be waived for a segment of Canadian society. They will be second-class Canadians to any other, no matter the first-class Canadian’s national origin or the national origin of their parents / grandparents. Who will then be the next country able to bring their law into Canada to search for Canadians of another national origin?

My hope is that this gets in front of every Canadian person who will decide such action is absurd and wrong and join us in the Canadian Charter Challenge to either stop or reverse implementation of the US FATCA IGA law in Canada. I hope that others will agree that implementation of the FATCA IGA could be buried in Bill C-31 omnibus bill without debating on its own merits and with the citizens of Canada is appalling.

Should Canada remain a SOVEREIGN nation with a Charter of Rights and Freedoms that mean the same for all Canadians?

John Richardson presented a similar information session in Calgary on Saturday. We thank him very much for coming to Alberta to foster more awareness and encourage those affected, rather than to react, to pause, determine whether or not they REALLY CAN BE DEEMED a US PERSON.

Do a lot of research and only then, work in whatever way you can best protect yourself and your Canadian family.

Ne Exeat Republica — The Next IRS Tactic vs. Expats and Accidental Americans? http://t.co/f4Pf6bGQgY

— USExpatCanada (@USExpatCanada) April 20, 2014

Wendy McElroy has written an interesting article describing the means by which one would be stopped at the border due to a tax debt. In spite of how frightened everyone is about crossing the border, there is at least one factor that a majority of expats would not meet and that is, having a sizeable tax debt. Mere non-compliance appears not to be a strong enough condition to warrant use of some of the more stringent methods available such as passport check,TECS, FBAR, or Consumer Credit eports.

Continue reading →

From Life Behind the IRon Drape, a blog by Mark Hubbard which critiques New Zealand’s IRD (Inland Revenue Department):

FATCA: The (NZ) Officials’ Report – A Crime That Deserves a Revolution

Here is an excerpt from this powerful evisceration of New Zealand’s new tax policy report heralding that country’s own IGA with the US:

Yesterday IRD Tax Policy published a 310 page document, part of which was the officials’ response to the IGA between NZ and the US, and FATCA, and the submissions made against both by the public. That report becomes a good object lesson to all submitters of what a whitewash such exercises are, and what a sham our statist captured democratic processes have become.  The report proper started at page 112 of the document: it is sadly unsurprising the first 111 pages dealt with what you might have thought was such a simple thing as how employee allowances are to be dealt with (such is the complexity of our taxing legislation). Although I could only make it to page 117 before my eyes were so blurred with tears of fury, and I had no interest in reading on, even in these five pages, look at what this report says about our society, and our world, in 2014.

New Zealand tax officials have just confessed, quite casually, to the creation of the full, one-world police surveillance state under the auspices, sorry, the outright bullying, of our US masters.

Read more

Social Security, Treasury target taxpayers for their parents’ decades-old debts

Do we need to look any further for confirmation that the United States has become a criminal enterprise?  Now it has started to assess debt based upon the alleged overpayment their parents’ Social Security 10 to 40 years in the past, and then confiscating the tax returns of the children. Read the article above to understand how childish, incompetent and rapacious the IRS has become. It would be hilariously funny if it wasn’t so scary.

Of course, we already knew that the IRS was a criminal organization, though a few detractors of this website have demurred. The OVDI/OVDP programs (i.e., Overseas Voluntary Disclosure Initiative/Program) sets out to confiscate a certain percentage of a so-called citizen’s “foreign” assets, while waiving every single Constitutional right of the victim. But it is nice to see it confirmed in such bold terms as out and out theft by the IRS, and this is happening to Homelanders!

This overpayment scheme is brilliant on the part of the IRS, since the victim has no way of proving that an overpayment wasn’t made or if they had already discharged the debt.  That is if they fail to keep records for several decades. I LOLed at the following lines:

“While we are responsible for collecting delinquent debts owed to taxpayers, we understand the importance of ensuring that debtors are treated fairly,” Treasury’s Schramek said in a statement responding to questions from The Washington Post. He said Treasury requires that debtors be given due process.

United States Federal Government bureaucrats obviously have no concept of fair treatment and due process.  The principle of inter-generational justice is Jeremiah 31.29-30 (ESV):

In those days they shall no longer say: ‘The fathers have eaten sour grapes, and the children’s teeth are set on edge.’ But everyone shall die for his own iniquity. Each man who eats sour grapes, his teeth shall be set on edge.

But today in the United States, the new due process is this: If the IRS says that the fathers ate sour grapes thirty years ago, the children’s teeth are set on edge.

Fiscaal Nieuws from the Netherlands reports on the case of a Dutch-American dual-citizen who appealed to the Dutch Board for the Protection of Human Rights after his investment account with BinckBank was closed following the signing of the FATCA IGA by the Dutch government on December 18, 2013.

Here is a translation of the article kindly supplied by Innocente:

FATCA unlawful discrimination by banning US customers

April 10, 2014

The American X has lived in the Netherlands since 1970 and also has US citizenship in addition to Dutch. He had an investment account with BinckBank (“Alex”). On December 1, 2013 BinckBank ended the relationship because X had not shown that he is not liable for taxes in the United States. X approached the Netherlands Institute for Human Rights to claim that BinckBank engaged in unlawful discrimination due to citizenship. BinckBank argued that it had terminated all 150 US customers who met the definition of “US Person”, used by the US Internal Revenue Service (IRS), because it refused to comply with requirements resulting from the planned Dutch legislation in response to the US Foreign Account Tax Compliance Act (FATCA) to provide all transactions and historical transaction data by US Persons to the Dutch Tax Authorities. According to BinckBank the discrimination was based on a generally binding regulation, because the agreement on December 18, 2013 between the Netherlands and the US Intergovernmental Agreement (IGA) for the implementation of FATCA forced it to do so . The Institute left open the question whether the IGA was a generally binding regulation because the IGA did not require BinckBank to close its customer accounts because of their US citizenship The Board also rejected the appeal by BinckBank for reasonableness and fairness, as the broad obligations required by FATCA brought disproportionately heavy costs. The law, in the General Equal Treatment Act (Equal Treatment Act), explicitly states that direct discrimination on grounds of citizenship was not only prohibited, except for exceptions included in the Equal Treatment Act itself. Honoring the appeal made by BinckBank on reasonableness and fairness would be contrary to the closed system of the Act. The Board concluded that BinckBank had engaged in unlawful discrimination in the provision of services on grounds of citizenship.

http://www.futd.nl/fiscaal-nieuws/7286/door-fatca-weren-van-amerikaanse-klanten-verboden-onderscheid/

Stephen Kish and Lynne Swanson have reviewed the legal opinion provided by constitutional lawyer Mr. Joseph Arvay on the constitutionality of the pending legislation “Canada-United States Enhanced Tax Information Exchange Agreement Implementation Act”. This act is aimed at implementing the “Intergovernmental Agreement” (IGA) designed to make the “Foreign Account Tax Compliant Act” (FATCA) operative in Canada.

The opinion has also been discussed with Mr. John Richardson, a Toronto lawyer, with whom we now have solicitor-client privilege, and who will be part of Dr. Kish’s and Ms. Swanson’s “litigation committee”.

The lengthy opinion provides in detail the pros and cons of the arguments, and possible outcomes.

There are good arguments that the proposed legislation infringes at a minimum on constitutionally protected rights and freedoms. Nevertheless, there are also arguments that the Government of Canada may employ to counter our position and, we emphasize, there is no certainty that litigation will be successful. Further, any litigation will be hard fought and very expensive. This litigation is not for the faint of heart.

Given the opinion of Mr. Arvay and discussion with Mr. Richardson, we advise that it is our intention to take all necessary steps to commence litigation against the Government of Canada once the IGA implementation legislation is enacted. Moreover, the nature and impact of the unprecedented legislation on all persons in Canada and those throughout the world who will be impacted by FATCA demands that we exercise this option that is in the public interest.

Very significant fundraising will be required.

Stephen Kish
Lynne Swanson

[Cross-posted on Maple Sandbox]

To help you judge if,

your experience with your local bank, credit union or insurance company (or as the US defines them: “foreign financial institutions”) will be a comfortable one, as some advertise,

shared here are excerpts of notes from a meeting set up with a “US Person” and Canadian husband by a Vice-President of the wealth management branch of one of the Big Five Canadian banks: Continue reading →