Category Archives: Issues regarding US persons abroad

Assuring the Care of a Family Member with Special Needs — but how does that work for a US Person in Canada?

James M. Hayes, a lawyer in Binghamton, N.Y., who specializes in estate and other planning for people with special needs and has a developmentally disabled adult son, put it more bluntly.     “I’ve never felt like I was taking advantage of anything,” he said. “It’s my adult son. I’ve never really felt that people who have adult children like my son should have a burden that other people don’t have.”       

 

What about US Persons in Canada?

I must say it’s hard for me to continue to feel this strongly hearing the arguments to the contrary that those like my adult son, or for that matter me and the medical care I’ve received in Canada over the years (although remaining in the work force and paying taxes), are not a burden.

Special Needs Planning in Canada, including the RDSP, is a good resource for planning — in Canada for Canadians.  There are likely similar programs in other countries.

I’ve tried to plan and save for my son (and my peace of mind) and not leave it all to government funding — through contributing to a Canadian Registered Disability Savings Plan (RDSP) and also putting in place a Discretionary Trust through Royal Trust, in conjnction with my daughter (my son’s only other blood relative in Canada) that will take effect upon my death to seamlessly be the source of paying expenses for my son.  Upon my death with my estate consisting of my house, my RRSP/RRIF and minor investment, my son will no longer be eligible for Alberta’s Assured Income for Severely Handicapped (as he will have over the limit of assets, which is the way I think it should be).   It seems that because my son is deemed a US citizen (although never registered with the US, never lived in the US, never had any benefit from the US), my planning is of limited use and robs me of the peace of mind so necessary for me that I’ve done everything within my power to ensure my son will be OK after I’m gone (and government funding perhaps gone).

I continue to question that I and other parents, guardians, trustees are not allowed the right, even with a court order, to renounce US citizenship on our family member’s behalf when we deem that in their best interests.  Perhaps someone can enlighten me of the benefits my son would have from the US after my death and, as I see it,  would have to be transported to that country for his care from the dwindling resources of social security there.  Does that make any sense?  Why would they want to take this on?  Would this make my son very discriminated against in a strange new country, not the one he was born and raised in and looked after and encouraged him to be as independent as possible — Canada?

From the above article for planning for special needs persons within the US (and US Persons Abroad?):

With each passing election season, the conversations about the cost of government-provided health care and Social Security get more urgent.

But debates about the deserving and the undeserving and the proper level of budgets and taxes tend to gloss over the issue of disabled people — many of whom must hope that the programs they rely on are not cut, because they have no way to make up the difference.

There were 5.5 million nonelderly adults with disabilities whose health care was covered by Medicaid in 2009, according to a Henry J. Kaiser Family Foundation estimate using the most recent numbers available. And an estimated 6.9 million nonelderly disabled people receive Social Security payments under the Supplemental Security Income program, according to federal government figures.

For every one of those people, many of whom draw from multiple sources of government aid, there are often several family members helping to sort out the financial details of that relative’s care. They navigate a confounding thicket of tasks and rules. On one side, there is the bureaucracy that government program administrators may erect at any moment. On the other, there are specialized trust accounts and estate planning issues to consider. Even sophisticated investors and ace budgeters find themselves lost when encountering all of this for the first time.

Note:  I am not a “sophisticated investor” or “ace budgeter” but I have tried to have in place an effective plan for my son.

Just thinking aloud again.  Thanks for listening.

Interesting show last night on TVOntario. The two “conservative” guests made a case for Romney with some success. David Frum came close to bringing up the “tax” issue and in fact talked criticially of Obama’s corporate tax policies as to how they affected Canada. Sheila Copps did not impress me and I thought Frum did a job on her. I thought though that Frum should have pushed not the level of American investment in Canadian energy but the level of American investment in manufacturing around the GTA and Ontario (striking right at Sheila Copps’ home base of Hamilton, ON). I kind of felt Sheila Copps sounded a little like Linda McQuaig. I still haven’t watched the whole show yet but I wanted to post it.

http://www.youtube.com/watch?v=QPowKUpSxoE&list=UUu_u-P3cBFO7D-sAjxd_I-w&index=2&feature=plcp

Check it out – Canada has determined that many US nationals are going to try and attempt to move illegally to Canada  after the US election. One Canadian police officer joked that there weren’t enough places for 47% of the US in Canada, but has Canada also possibly considered this decision based on financial consequences of allowing so many bound by citizenship-based taxation to migrate? Closing the flood gates before the FATCA deadline perhaps?

http://www.newyorker.com/online/blogs/borowitzreport/2012/10/canada-tightens-border.html

Unfortionately, it has nothing with FATCA or non resident filing. I just thought some would to like see and hear who his is.

http://video.cnbc.com/gallery/?video=3000100085

Here it is:

http://www.mondaq.com/canada/x/200116/tax+authorities/Do+Not+Get+Out+Of+IRSs+Tax+Amnesty+Programs+Without+Knowing+The+Facts

Canada: Do Not Get Out Of IRS’s Tax Amnesty Programs Without Knowing The Facts

OR

Direct Link: Roy Berg’s Entire ” Do not get out of IRS’s tax amnesty programs without knowing the facts”

A couple of initial comments I have:

1. My understanding is once you enter OVDI Criminal penalties are off the table opt out or no opt out. Can someone clarify this further?

2. Roy makes a point that himself and others have made before which are that the new super minnow “program” is rather narrowily defined AND as currently exists does not allow for people currently in the OVDI program to enter the new minnow program. (Roy makes a point in the article is this “might” change “someday” in the future).

3. As discussed previously the new minnow “program” really doesn’t solve that many problems despite the fact it has been under development for almost eight months.

4. Roy’s article pours cold water to some degree over the claims of some that you can enter OVDI and opt-out with relative ease.

Banks Deny US Student an Account

October 7th 2012

From T. Hirsekorn – No account for pocket change: Out of fear from lawsuits, Swiss banks turned a 16 year old US student away.

The 16 year old was rejected by many banks and doesn’t want her face to be shown (image: 20 Minutes)

The tax dispute with America released a strong defensive response from several Swiss banks.  Some banks are following a compromise-free path to avoid any conflict with the IRS, such as with the case of Christina (16).  The exchange student, who lives in Zurich, wanted to open up an account so that her parents could give her an allowance of 60 CHF per month.  But Raiffeisen abruptly turned her away by stating that no Swiss banks accept US persons anymore.  “Unbelievable! Given that I’m not even taxable in the US” stated Cristina annoyed.

Raiffeisen justified itself by stating that it is currently not accepting US citizens as new customers.  “We cannot come to the conclusion if kids are taxed in the US or not”, explained speaker Jens Wiesenhütter.   After the Wegelin affair, banks are avoiding any possible risk that could derive from US business relations, assumes the economic professor, Walter Wittmann.

The Zurich cantonal bank, Coop bank  and Clientis also refused to open an account for Cristina.  Credit Suisse didn’t even want to reveal its business policy.  “Every bank can, according to their policy and contract flexibility, decide with whom they are willing to do business”, explained Rebeca Garcia from the Swiss Bankers Association.  More liberal are UBS, Postfinance and Migrosbank.  “Christina may have an account with us as an exchange student”, confirmed the UBS spokesperson.

————————————————————————————————-

I quickly translated this during my lunch break, so please excuse any mistakes

Source: 20 Minuten Online

And there is appears to be some activity with the US. As shown at the links below Brian Ernewein who is the General Director of the Tax Policy Branch at Finance Canada traveled to the US twice over the summer once in June and once in August.

http://www.fin.gc.ca/expenses-frais/reports-rapports-eng.asp?eventID=5262&empID=209&year=2012&q=3&empType=4&r=t

http://www.fin.gc.ca/expenses-frais/reports-rapports-eng.asp?eventID=5332&empID=209&year=2012&q=3&empType=4&r=t

The first meeting was with generic US Government officials(which I take to include both Treasury and IRS and possibly FINCEN) and the second was with US Treasury Staff. About a week after Ernewein’s June meeting the new expat super minnow program was announced. I don’t know whether or nor this was a coincidence. Ernewein also June went to a big OECD conference in Paris as did one of the Assistant Commissioner’s at CRA. I will try to find a picture or video of Ernewein so you can put a picture to the name. I will note while he is high up he is not at the level of Deputy Minister or Assistant Deputy Minister which are filled by Michael Horgan and Louise Levonian respectively. Links below:

http://www.fin.gc.ca/comment/adm-2-eng.asp

http://www.fin.gc.ca/comment/dm-eng.asp

My personal opinion is truly serious negotiations need to involve either Levonian or Michael Horgan. By definition Brian Ernewein I doubt met anyone higher than Manal Corwin, Emily McMahon, Michael Plowgian etc.

READERS WHO LIVE IN BRITISH COLUMBIA, PLEASE TAKE NOTE OF THIS.

This piece of information is contributed through a person wishing to maintain one-remove anonymity (no direct posting to Brock). I have received this information third-hand, but from a source I consider very reliable. (So this is at least two-remove posting. I haven’t personally spoken with the individual reporting this conversation with a Vancouver consulate official or employee.

In a telephone conversation with the Vancouver consulate in August 2012, a person at the consulate said that there is deliberate “batching” in the processing of renunciations. When the current batch is completed, priority will be given to other – presumably deferred – tasks for an unspecified period of time. (This perspective may help to explain the recent considerable lengthening of wait for first appointment in Vancouver.)

My advice to anyone in BC is, if it’s at all feasible and you want to get a CLN, go to Calgary or maybe Toronto, not Vancouver. They aren’t doing this, as far as we know, and certainly the appointment timings and CLN release information, starkly contrasted with what is going on in Vancouver, supports that assumption.

The information isn’t clear on whether this batching occurs with relinquishments as well as renunciations, but as Vancouver (unlike the rest of the planet except the Ottawa embassy) doesn’t seem to make any procedural distinctions in terms of processing the two very different forms of CLN, I suspect they probably also are batching relinquishments.

So, I would assume that if you go to Vancouver consulate, your application for either type of CLN could sit in a black hole for a rather long time. Bear that in mind when planning your course of action. I believe if you’ve already made a first appointment or even have had that first meeting, you can still proceed with your process at another consulate, but I don’t know whether that might adversely affect processing in Washington. It shouldn’t, and I do know one person who got the application switched from the embassy to a consulate, but that person hasn’t received the CLN yet so we don’t know for certain that it has no adverse consequences.

http://www.bcbusinessonline.ca/personal-finance/us-tax-laws-long-arm-uncle-sam

One thing that continually shocks me is just how many people are effected by the US’ Citizenship Based Taxation of all political stripes Doug Ford, David Alward, Elizabeth May, former Toronto Mayor David Miller, and now the children of long time and prominent Quebec Seperatist leader and founder of the Bloc Quebecois Lucien Bouchard. Here is wikipedia:

Bouchard separated from his second wife^[8][9], Audrey Best (1960–2011), a Côte d’Azur-born California-reared airline stewardess, who later became a lawyer, whom he met on an international flight.^[10] She was the daughter of James Best, a U.S. Navy officer, and his French wife, Marie-Josée Massay.

Bouchard is the father of two sons with Best, Alexandre and Simon, who hold dual Canadian-United States citizenship. Best held dual United States-France citizenship. She died on January 25, 2011, aged 50, from breast cancer.

I am curious what Bouchard thinks about current Bloc Quebecois leader Danielle Paille strong support of FATCA to root out “tax cheats” and other “scum.”

http://en.wikipedia.org/wiki/Lucien_Bouchard

http://en.wikipedia.org/wiki/Daniel_Paill%C3%A9

Other Canadians can probably describe to our non Canadian readers who Lucien Bouchard was. Sometimes something called Meech Lake is mentioned here all I will say is Bouchard was an a key player in it.