Category Archives: Issues regarding US persons abroad

Cross-posted from ADCSovereignty blog

Watch “Ottawa Forum 2016: Getting the North American Relationships Right” on @Vimeo https://t.co/Upfrv73NmC – see 57 minute mark – citizens

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) May 14, 2016

On January 31, 2016 I wrote a post about the Canada2020 conference on foreign policy. I noted with particular interest the participation of former U.S. Ambassador to Canada Gordon Giffen.

That post included:

From the perspective of Hon. Gordon D. Giffin, Dentons LLP:

This was of particular interest. I had forgotten that Gordon Giffin (U.S. Ambassador to Canada in the Clinton years) grew up in Canada. Mr. Giffin actually grew up in the Toronto area and attended Richview Collegiate (Stephen Harper’s High School). He returned to the United States for College and law school. In other words, the former U.S. Ambassador to Canada clearly has “Roots” (not the store, which also has a U.S. connection) in Canada.

He began by stating his view that the TPP should be understood to be an update to the NAFTA Treaty.

Mr. Giffin echoed the view that Canada, the U.S. and Mexico are “in effect” part of the same “neighborhood” and that each of the three countries should have a “North America Relations Department”.

Mr. Giffin made the statement (and this is a bit of a paraphrase) that it should “NOT be hard for people to move around the neighborhood”. Hmm… Do you think that FATCA and U.S. “citizenship taxation” might make it hard for North American residents to “move around the neighborhood”?

I assume that Mr. Giffin’s family was filing both U.S. and Canadian taxes during the many years the family was living in Canada. Therefore, he “might” have some concept of U.S. citizenship-based taxation. On the other hand, any concept of citizenship taxation that he might have, would have been formed prior to:

– FBAR, FATCA, PFIC, Foreign Trusts, etc.

– the FBAR Fundraiser

Assuming you are interested in the relationship between Canada and the United States, I highly recommend the video referenced in the above tweet. If you are impatient, you should pick it up at the 57 minute mark.

I would be interested in your comments.

John Richardson

Canadian Government to Pre-Screen Air Arrivals US-Style including returning Canadians

As if the next scheduled transfer of personal financial information to the IRS is not a bad enough omen for this date, a new assault will become an ingrained part of life in North America as of September 30, 2016.

While PMJT was whooping it up in Washington D.C., Public Safety Minister Ralph Goodale announced changes in regulations that fall under the Customs Act and the Immigration and Refugee Protection Act. These changes are a part of implementation of the Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness (2011). As must be ovbious by now, this nasty piece of business bugs me as much as FATCA does.

Airlines will now be required to provide advance and “real-time” information on anyone entering Canada by air to the Canada Border Services Agency (CBSA), in order to cross-check with security agencies. In the event there are any discrepancies or concerns, a decision will be made prior to the time the traveller boards a flight.

This system, called the Interactive Advance Passenger Information (IAPI ) will give CBSA the authority to identify persons who are inadmissable to Canada. Projected costs are $10 million annually. IAPI will be used to make “board/no-board” decisions on all travelers prior to their departure. This parallels the U.S. system known as Advance Passenger Information System (APIS) operating since 2009.

The regulations will require airlines to have a secure data link with the CBSA in order to provide access to the required information in the prescribed format in a “real-time” basis, including any changes to the information that may occur. Wow, yet another possible place for information to be breached. Note that credit card information will be included (see below).

Passenger reservation information will have to be provided by air carriers or travel agencies to the CBSA at least 72 hours prior to departure. I presume that if the airline fails to provide the information, the traveller will be unable to board and will not be reimbursed for any money lost from being unable to travel (hotel, vehicle reservations, etc).

As published in the Canada Gazette, here is the information that the airline must provide to CBSA. I have bolded items that I am puzzled as to relevance (if there is any at all to begin with).

Since there is nothing inherently criminal or “terrorist” oriented about any of this information, I expect what is really important, is what the CBSA has in its records (and which I presume may originate from and/or able to be shared with the US, meaning first off, CBP, DHS, FBI, CIA, etc etc). Actually, just where will this information at CBSA originate? Metadata from NSA? US no-fly lists? Any verification necessary before being applied?

I wonder what is next – strip searches by airline employees before proceeding to security? I mean, after all, one can’t be too careful.

SCHEDULE
(Paragraph 5(e))

Information About Persons in a Reservation System
1 Their surname, first name and any middle names
2 Their reservation record locator number
3 The date of their reservation and date their ticket was issued
4 Their itinerary, including the dates of departure and arrival for each segment of carriage
5 Information about their participation in a loyalty program and the benefits earned under the program, such as free tickets or upgrades
6 The number of the other passengers included in the reservation record and their surname, first name and any middle names
7 Contact information for each person mentioned in the reservation record, including the person who made the reservation
8 Billing and payment information, including credit card number and billing address
9 Information about the travel agent or agency, including the name and contact information
10 Code share information
11 Information about whether the reservation record has been divided into several records or is linked to another record
12 Their travel status, including travel confirmation and check-in status
13 Ticketing information, including the ticket number, automated ticket fare quote and whether a one-way ticket was purchased
14 Their baggage information, including the number and weight of their bags
15 Their seating information, including seat number
16 General remarks about the person in the reservation record, including other supplementary information, special service information and special service request information
17 The information referred to in paragraphs 5(a) and (b) of these Regulations
18 The history of any changes to the information referred to in items 1 to 17 of this schedule

Liability of https://t.co/6CNW7kgfII-Card Holders =RBT. What country treats its immigrants better than its citizens? https://t.co/2UmKT55ELn

— Patricia Moon (@nobledreamer16) May 12, 2016

Introduction (my own, not the author of the post, John Richardson).

What country treats its own citizens worse than it treats its immigrants?

Phil Hodgen’s Expatriation Letter of the Week is based upon this concept: whether tax liability of a green-card holder depends upon residency only or whether it includes other factors to consider in order to protect oneself from the long and complicated arms of IRS regulations. The example is simple and offers no less than 5 possible ways to deal with ending a non long-term status as a permanent resident of the United States. It is astounding that so much can be involved for a residence of 3 months with no income earned (US source or otherwise). Only in the USA could things be this complicated and full of possible issues (audits, penalties, etc).

Someone who is a nonresident will only be required to file a U.S. tax return because of:

• receiving income from U.S. sources; or
• being engaged in business in the United States, even if zero income is derived from it

Without unusual complicating factors, the general idea that one owes the US any tax is based upon either being a resident, or if a non-resident, having US-sourced income. What is interesting is that if one is a non-resident US citizen, none of the possibiities that apply to immigrants to the US are available to citizens. Phil’s letter is a demonstration of the extent of possibilities available to some but denied to other non-residents based only upon their place of birth.

This post, in addition to Physical presence as a necessary condition for being a US “resident” under the Internal Revenue Code , emphasizes the importance of physical presence as a condition of liabiity for U.S. taxation. Phil’s letter speaks to the (ridiculous) lengths the IRS will go to avoid taxing anyone who can prove they are a non-resident alien. This speaks to the level of residence-based taxation that is in reality, practiced by the U.S. and which shows the U.S. to be basically like any other country. If we want to get rid of CBT, we need to build arguments to point to practical issues as well as Constitutional ones. At present, to my mind, it makes a lot of sense to build the arguments based upon practicality. This removes the “pay-one’s-share” issue in a non-confrontational way. To immediately hit the “patriotic” “you-owe-us-everything-for-the-privilege-of-your-U.S.-birth” types with “CBT-is-a-violation-of-our-human-rights” is to close a door before it is even opened. We can see that readily from the inability of almost everyone to discern the difference between non-resident “foreign” accounts held for legitimate purposes versus those held by resident Homelanders for purposes of tax evasion.

Please take the time to consider these points and start building them into your comments to online articles, letters to representatives etc. This is an arrow they won’t see coming.
****
Tax jurisdiction and residential ties

The two types of residential ties considered for all aliens

When considering the meaning of “residence” for tax purposes, attempting to ascribe a place of “residence “to an individual, and imposing taxation on individuals, the Internal Revenue Code considers:

A. The extent of “residential ties” to the United States; and

B. The extent of “residential ties” to another country.

We see both aspects of residence considered as a way to defeat the “substantial presence” test in Internal Revenue Code S. 7701(b). If the country of residence is uncertain, or if a person is considered to be a “tax resident” of the United States and another country, the Internal Revenue Code considers ties to both the United States and the other country in question.

For “resident aliens” (Green Card Holders):

– both past and present residential ties to the United States and to other nations are considered in at least 3 ways under the Internal Revenue Code itself; and

– residential ties to both the United States and the other country of residence are considered in determining residence under Article IV of the Canada U.S. (and other) tax treaties**.

Green Card Holders and tax residence

A
previous post discussed the fact that:

1. Internal Revenue Code S. 7701(a)(30) defines “U.S. Persons”
   as including “citizens” and “residents”
2. The combined effect of Internal Revenue Code S. 7701(b)(1)
   and S. 7701(b)(6) define Green Card Holders in a way that
   ensures that they meet the statutory test of “residence”. (Of
   course Green Card Holders may be able to defeat the status of
   “resident” by making use of the Treaty Election in Article IV of
   the Tax Treaty)
3. The statutory defenses to “residence” found in S. 7701(b) of
   the Internal Revenue Code, available to “aliens” who are NOT
   Green Card Holders, take into account and are a function of the
   extent of residential ties to other jurisdictions

Residence matters and residence matters hugely. Hence, the definition of “resident” matters and matters hugely.

Please see more here
 

An unusual report from Metro News: MapleMatch.com offers to pair Canadians, Americans fleeing Trump

A new dating website is offering to pair Americans with Canadian singles to save them from a Donald Trump presidency.

MapleMatch.com promises love and a U.S. escape plan if Trump becomes commander-in-chief.

However, nowhere does MapleMatch.com see fit to warn their Canadian users about the severe dangers of becoming intimate with Americans: your new lover has a crazy stalker ex named Sam, who’s coming after you two across international borders to get his voyeuristic jollies. For the rest of your life, you’ll never be alone together: the weirdo will peep into the most private aspects of your relationship, keep trying to break into your house to help himself to money from your wallet, and threaten to drag your children into his perverted games.

Continue reading →

 
Today’s taxation torah from Phil Hodgen goes over the top for scrupulous nitpicking. I could care less about green card from a personal standpoint. But it is so much fun to watch a monster truck roil around in the bureaucratic muck.

 
http://hodgen.com/tax-residency-starting-termination-dates-for-green-card-holders/
 

These concluding words deserve quotation. Not from a crass compliancer. (Hodgen shared these thousands of words for free.) From a “cleaner” — think Harvey Keitel as Winston Wolfe in Pulp Fiction — who don’t want no blowback.

I like to do stuff today that prevents future messes tomorrow.

I am an enthusiast for excessive overkill when it comes to solving problems. (See my point about preventing future messes).

…

To my mind, this has the highest possibility of solving the problem permanently, at the cost of an extra few hours of work right now.

Reasonable minds may differ. Your good judgment, fortunately, is not encumbered by my opinions.

Feds set to introduce bill with new rules for crossing Canada-U.S. border https://t.co/ECdhHIn6pg Reminds me a bit too much of #FATCA IGA

— Patricia Moon (@nobledreamer16) May 9, 2016

New Rules for Crossing the Canadian-US Border

Masquerading (?) as an extension of the pre-clearance system already in place, the Canadian government ” is preparing to introduce legislation that will establish rules for a new border-crossing experiment that could change the way travellers enter the U.S.”

• It will spell out the rights and responsibilities of U.S. customs agents working on Canadian soil
• preclearance is being extended to land travel with the first pilot projects occurring at train stations in Vancouver and Montreal

Excerpts:

Under the 2001 airport deal, American agents can detain travellers in Canada — but it would be up to domestic police services to make a formal arrest. Also, American officers can be present for a strip search, but not when it involves travellers of the opposite sex. Other provisions govern the ability of agents to carry firearms.

“This is not a newfangled thing. We have preclearance (at airports),” Freeland said in an interview. “It works very well for Canadians, and that’s why we’re keen to extend it and formalize the structure a bit more.”

The land-preclearance agreement was first announced by the former Conservative government and the Obama administration, but implementing legislation had never been passed.

“That’s a really important step — introducing and passing the enabling legislation in Canada is really important,” said Maryscott Greenwood of the Canadian American Business Council.

The Canadian government has apparently concluded that the economic benefit warrants the cost. Canada will pay for U.S. customs infrastructure on Canadian soil.

Hmmmm… if we already have a pre-clearance program, why on earth do we need more rules, particularly ones that define being detained by Americans on Canadian soil, strip searches, and use of firearms by US agents? This reminds me an awful lot of the IGA and how it is “authorized by the Treaty.” If the Treaty covered it, why the IGA? If pre-clearance is already established, why the need for rules that sound like anticipated arrests rather than just the checking of documents etc? And of course, implementing legislation in the US does not exist and Canada (of course) will pay for Americans operating on Canadian soil. Will Canadian officers have the same “rights and responsibilities on US soil and will the US pay for that?

I cannot help but think that this is another way for the U.S. to try and sneak through the problems that have prevented previous attempts to have policing conducted by the U.S. in Canada as the U.S. sees fit. Definitely something we should all keep an eye on.

*****

Background:

End of Nations: Canada, the US and the “Security Perimeter” – GlobalResearchTV
 

While this video is from 2011, it outlines the recent history of border initiatives and questions the effects of cooperation with the Americans. Listen to former US Ambassador Jacobsen describe how no legislation is required; all this can be achieved via executive action. (sound familiar?)

The Security and Prosperity Partnership of North American

U.S. Wants Cross-Border Officers Exempt from Canadian Law

Canada-U.S. Cross-Border Police Project ‘Postponed’ Over Differences

Integrated Cross-border Law Enforcement Operations Act (in force August 20, 2012)

So I just received my 2016 Canadian Census notice in the mail today, complete with a personalized secure access code, presumably to initiate the self-destruct mechanism attached to the few remaining vestiges of privacy I have in my life, and to potentially out myself – and my family – to both the Canadian and US Governments. In the back of my mind I’m thinking, should I really be this paranoid, just because it’s increasingly likely that everyone is indeed out to get me?

While I have so far managed to elude the FATCA police by sheer luck of having never revealed my birthplace to anyone where I bank, I am now confronted with one of the first true conundrums of my post-OMG moment life – how to respond, if at all, to the following census questions:

2016 Census of Population questions, long form (National Household Survey):

STEP B
1. Including yourself, how many persons usually live at this address on May 10, 2016?
1: Number of Persons

2. Including yourself, list all persons who usually live here on May 10, 2016.
1: Family Name(s); Given Name(s)

STEP C
1. Did you leave anyone out of step B because you were not sure the person should be listed? For example, a student, a child in joint custody, a person temporarily away, a person who lives here temporarily, a resident from another country with a work or study permit, a refugee claimant, etc.

1: No
2: Yes. Specify the name, the relationship and the reason.

STEP E
Copy the names in step B to question 1. Keep the same order.

If more than five persons live here, you will need an extra questionnaire.
1. Name.
In the spaces provided, copy the names in the same order as in step B. Then answer the following questions for each person.
1: Family Name, Given Name

SOCIOCULTURAL INFORMATION

12: Where was this person born?

Specify one response only, according to present boundaries.
Born in Canada
1: Nfld. Lab.
2: P.E.I.
3: N.S.
4: N.B.
5: Quebec
6: Ontario
7: Manitoba
8: Sask.
9: Alberta
10: B.C.
11: Yukon
12: N.W.T.
13: Nunavut

Born outside Canada
14: specify country

13: Of what country is this person a citizen?

Indicate more than one citizenship, if applicable.

“Canada, by naturalization” refers to the process by which an immigrant is granted citizenship of Canada, under the Citizenship Act.

1: Canada, by birth
2: Canada, by naturalization
3: Other country — specify

14: Is this person now, or has this person ever been, a landed immigrant?

A “landed immigrant” (permanent resident) is a person who has been granted the right to live in Canada permanently by immigration authorities.
1: No. Go to question 16.
2: Yes

15: In what year did this person first become a landed immigrant?

Example: Year 1974
1: Year. If exact year is not known, enter best estimate.

PLACE OF BIRTH OF PARENTS

24: Where was each of this person’s parents born?

a) Father

Mark or specify country according to present boundaries.
1: Born in Canada
2: Born outside Canada — specify country
b) Mother

Mark or specify country according to present boundaries.
1: Born in Canada
2: Born outside Canada — specify country

The bottom of the notice reads:

By law, your responses will be kept confidential.
Thank you for your cooperation.

Didn’t the CRA also recently insist that their handing-over of the financial information of hundreds of thousands of Canadians to the US Government is also being kept confidential? How reassuring.

Now, I’m well aware that there are a million other data points out there already broadcasting every detail of my life to whichever three-letter agency might be interested, but it genuinely concerns me that this very explicit package of personal information is being demanded so unequivocally, right now, when so many of us are still figuratively hiding in the attic, not all that far removed from Anne Frank – and the Canadian Government damn well knows it. The threat is right there on the front of the notice:

Complete the census – it’s the law.

So, that perennial philosophical question: what would Jesus do?
If you are a US Person living in Canada in 2016, what will you do?