UPDATE SEPTEMBER 19, 2015: SEE ALSO DISCLAIMER AND LITIGATION UPDATES.

[This post, which began in May and having over 1000 revisions and 2000 comments, is being retired from service and updates. It lived through the success of reaching a total of $500,000 in donations from our kind, dear supporters who had little money to give, the hope and disappointment with the summary trial decision, and the certainty that we are now finally moving on to the Charter trial.]

CANADIAN CHARTER TRIAL UPDATE:

— We have instructed the Arvay team to prepare for the “Constitutional-Charter” trial. This means that our focus now, as it was in the beginning of our lawsuit, is on the Charter trial.

Unless there is a new expense in the future that we have not anticipated, the monies from your donations will be sufficient to take us through the “constitutional-charter” trial in Federal Court. However, to pay other legal bills we will need additional donations from our supporters, and a request for donations will appear on another post soon.

OUR LITIGATION HISTORY:

One year ago, on August 11, 2014, Litigator Joseph Arvay filed a FATCA IGA lawsuit in Canada Federal Court on behalf of Plaintiffs Ginny and Gwen, the Alliance for the Defence of Canadian Sovereignty (en français), and all peoples.

Because of a Government delay we initiated a “summary trial”, using a portion of the arguments, which offered the possibility of preventing private banking information from being turned over to the IRS before September 30, 2015. See Alliance’s Claims, our Alliance blog, and AUGUST 4-5 SUMMARY TRIAL FILINGS in LITIGATION UPDATES.
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NB:TORONTO Consulate is verifying Social Security Numbers when Applying/Renewing Passports
 

Condors #AKA Bounty Hunters chase “U.S. persons” – FATCA = Modern Equivalent of Fugitive Slave Act

All condors MUST assist with the enforcement of CBT law on Americans abroad or face Circular 230 sanctions – just doing their job!
 
Bob Jones on American Expatriates Facebook: “CBT is the modern form of slavery”
 
December 12, 2011 – “We can’t trust the IRS, but can we trust the accountants and the lawyers?” – Early Isaac Brock Society  
 

We can't trust the IRS – But can we trust the accountants and lawyers? http://t.co/bt6AXQ0Gyt

— U.S. Citizen Abroad (@USCitizenAbroad) August 26, 2015

The post is a comment responding to the blog post – IRS issues Fact Sheet For U.S. or dual citizens residing outside of the U.S., to which Petros commented : They [the IRS] can’t be trusted when they talk about reasonable cause, because they don’t really indicate what reasonable cause is. As I said in the post – the trust issue is huge. But, the trust issue exists with respect to both the IRS and the accountants and lawyers who have been involved in this (often giving advice that was clearly of benefit to the accountant/lawyer and not necessarily to the client).

November 26, 2014 – Form People – “Beckon you to enter their web of sin” Continue reading →

cross-posted from the ADCSovereightyblog

Which will come first: A decision in the FATCA legal challenge or the first exchange of info? http://t.co/SZGJz5NwiX via @legalpost

— John Richardson – Counsellor for US persons abroad (@ExpatriationLaw) August 26, 2015

Note the final sentence:

“This is big stuff and it’s right around the corner,” Berg says. “And in light of the federal election, the decision may have electoral consequences.”

Originally posted on Financial Post
 

The first exchange of information under the U.S. Foreign Account Tax Compliance Act (FATCA) is scheduled to happen next month — unless a legal challenge of the domestic legislation enabling FATCA puts a stop to it.

The plaintiffs, two dual Canadian-U.S. citizens, claim that the legislation contravenes the U.S.-Canada Treaty, and that the treaty prohibits the exchange of information required by FATCA. The Federal Court of Canada has committed to issuing its decision in the case before Sept. 15, just a few weeks before Canadians elect new federal government.

“If the courts hold for the plaintiff, the planned implementation of CRS is also in jeopardy because it is modeled on FATCA,” says Roy Berg, director of U.S. tax law with Moodys Gartner Tax Law LLP in Calgary.

CRS, or the common reporting standard, is a proposed tax information exchange system that would swap financial data between more than 60…

View original 165 more words

US “Persons”-Still undecided about #FATCA? Come & learn what your options are Toronto Sun Aug 30 1-3 pm 100 St Joseph http://t.co/hMkwxb0pzJ

— Patricia Moon (@nobledreamer16) August 24, 2015

SOLVING U.S. CITIZENSHIP PROBLEMS TORONTO

Sunday, August 30, 2015

1:00 –3:00 pm – $20.00

100 St. Joseph Street, Carr Hall

MAP

WHO: John Richardson, B.A., LL.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.

Citizenshipsolutions.ca

Hope to see you, your families and friends!

Spread the word! Information presented is NOT intended or offered as legal or accounting advice specific to your situation.

NEXT INFORMATION SESSION:

Guelph, ON

Wednesday, September 30, 2015

6:00 – 8:00 p.m.

Venue TBA

 
UPDATE

from calgary411:

After reading the update to the post referenced in this post, I also listened once again to “John Richardson interviews Andrew Grossman, March 16, 2014″.

I suggest that anyone reading here who has a thirst to hear more opinion about who may be and who may not be deemed a US citizen (and how the IRS looks at some born abroad, never registered, etc.), including the nuances one must take into account, also listen or re-listen. It is an essential discussion, two lawyers with a great interest in and expertise of the subject of *citizenship*. Fascinating and, from it, information for me to take into account. Thank you.
 
 

Analysis – @ADCSovereignty #CdnFATCATrial – @RoyBerg1: “practitioners anxiously await the court’s decision” https://t.co/nIKMXUUxa2

— ADCSovereignty (@ADCSovereignty) August 25, 2015

 
Stephen Kish has obtained permission from Tax Notes International to reproduce an article by Roy Berg to be posted (only there and only once) at the Alliance for the Defence of Canadian Sovereignty WordPress blog. The article is an interesting analysis of some main points regarding the Summary Trial which took place in Vancouver August 4-5, 2015.  John Richardson has taken that article, comments from the recent BNA article (linked below) and his own experience at the trial and examined how he sees the interaction. I am providing some main excerpts which will hopefully give a sense of what is involved and make you curious enough to go over and read the the article and the post.
 

On August 20, 2015,  BNA published an article on the Alliance For The Defence of Canadian Sovereignty that took place earlier this month. The article was posted by Stephen Kish at the Isaac Brock Society. As expected the article generated a large number of comments. The BNA article included the thoughts (and only the thoughts) of a number of Canadian tax practitioners.

Early Brock commentary on the Vancouver trial noted the presence of lawyers from Moodys Gartner. The BNA article included commentary from  Moodys lawyer Roy Berg. In an article published on August 24 by Tax Notes, Mr. Berg expands on his views of the issues raised in the Vancouver trial.

A “report” on Mr. Berg’s Report …

The article, which is really a “report” of the trial, attempts three things:
First – to identify the issues raised in the Vancouver Trial

Second – to distinguish the issues raised in the Vancouver trial from the issues that are likely to be raised in the “full Charter trial”

Third – to provide his own commentary on how the issues should be resolved.

Having sat throught the Summary Trial, I can guarantee that trying to be clear about the issues raised, is/was not easy. What was really difficult was realizing that the interplay of the Treaty, the IGA, Canadian law, US law etc., does not end up with a nice and neat, clear answer. Determining how to weigh it all out seems to me, impossible to do (objectively). I suppose primarily because, in spite of the Treaty, one would naturally expect that in Canada, Canadian law should have precedence. The issues concern for the most part, Canadian citizens and Canadian residents, regardless of their US status. Their relationship to the United States should be a secondary one. All other nations of the world seem to understand this principle. The aberration here is as we all know, citizenship-based taxation. Why any country would sign a treaty with the US with the inevitable savings clause is truly mystifying. What does the other country gain by agreeing to such a thing? NOTHING! That, along with that annoying “tax treaty override” tendency, (say it now, U-S-A, I-G-A! U-S-A, I-G-A!) certainly suggests expecting the US to honor what is signed in a reasonable way is just plain naive and or stupid. That’s why they need the 30% sanction. Kinda like they have to have the IGA because what they are doing is not in the Treaty….A never-ending loop……
 

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Update 2021:  These tee shirts are no longer available

UPDATE from Blaze: August 23, 2015

But as `the person in charge of privacy“ for Canada, Therrien is obfuscating on FATCA. Here is my reply to him (with my home address and phone number redacted for posting)
http://maplesandbox.ca/wp-content/uploads/2015/08/Privacy-Commissioner-2.jpg

Included in my reply is:

YOU are the Privacy Officer at the organization I am concerned about—the Government of Canada. Aren’t you?…

I am stunned the Privacy Commissioner of Canada who is “the person in charge of privacy” for the Government of Canada is not as alarmed as I am at the signing over the privacy of one million Canadians, their spouses and business partners to a foreign government.

I hope you will stand up for privacy rights of all Canadians as “the person in charge of privacy” for Canada.

**********************

This article on our ADCS-ADSC Canadian FATCA IGA lawsuit came out on August 20, 2015.

I have now received permission from Bloomberg BNA to post it on Brock:

“Reproduced with permission from Daily Tax Report, 161 DTR I-1 (Aug. 20, 2015). Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.”

This article is interesting as it largely takes our lawsuit seriously. Unfortunately, none of “us” (Ginny and Gwen, our supporters harmed by the Canada-U.S. FATCA IGA) were interviewed.

THE BLOOMBERG ARTICLE:

“Canada Court Ruling Could Put Brakes on FATCA
2015-08-19 23:53:39.983 GMT
BNA Snapshot

Development: Federal Court of Canada due to rule on the validity of Canada’s intergovernmental agreement to facilitate FATCA financial reporting.

Takeaway: Practitioners predict a ruling for the plaintiffs would spur challenges around the world.

Next: Ruling expected by Sept. 30 [Hopefully before September 13; SK].

By Peter Menyasz

June 19 — Tax authorities and practitioners around the world are awaiting a Canadian court’s ruling on the legality of Canada’s legislation to comply with the Foreign Account Tax Compliance Act (Hillis v. Attorney Gen. of Canada, Federal Court of Canada, No. T-1734-14, oral arguments, 8/5/15).

The Federal Court of Canada is due to issue by Sept. 30 a ruling on the validity of the intergovernmental agreement on FATCA between Canada and the U.S., which mirrors more than 100 IGAs the U.S. has reached with other jurisdictions (221 DTR I-3, 11/17/14).

The ruling will address the preliminary issue, addressed in oral arguments Aug. 4-5, of whether information exchanges authorized by Canadian legislation to implement the IGA are consistent with the Canada-U.S. Income Tax Convention. The court will rule later on the constitutional validity of Canada’s legislation to implement the IGA, which is the lawsuit’s main thrust.

Storm Ahead?

If the court finds in favor of the plaintiffs, the Canadian government will undoubtedly file an appeal with the Federal Court of Appeal, but in the interim, the ruling will “throw the brakes” on FATCA’s application in Canada, Roy Berg, director of U.S. tax law with Moodys Gartner Tax Law LLP, told Bloomberg BNA in an Aug. 18 interview.

The court could also find the IGA partially inconsistent with the tax treaty, leaving the door open to appeals by both sides. Even if the court supports the government’s position, an appeal is likely, Berg said.

In addition, the court has indicated it will likely issue only a bare order, with reasons to follow later, leaving uncertainty over the details of its finding, and regardless of this ruling, the constitutional challenge will remain to be heard, he said.

The Canadian challenge is being watched carefully in the other jurisdictions with IGAs in place, and success by the Canadian plaintiffs could lead to a string of challenges, particularly as the treaty-based arguments would apply in a number of jurisdictions, he said.

Additionally, Berg said that if the Canadian lawsuit is successful, it could put at risk Canada’s ability to participate fully in the Organization for Economic Cooperation and Development’s common reporting standard. The Canadian government committed in its budget for fiscal 2015-2016 to implementing the OECD standard in July 2017, with draft legislation to be introduced during 2015 (77 DTR I-3, 4/22/15) .

“Potentially, the storm is coming,” Berg said.

Practitioners Awaiting Outcome

Alexander Demner, a partner in the Toronto office of Thorsteinssons LLP, agreed Aug. 19 that a ruling in favor of the plaintiffs would be “extremely significant,” effectively striking down the IGA and forcing Canadian financial institutions to choose between reporting directly to the IRS and paying the full 30 percent withholding tax on payments received from U.S. payors.

That would also mean that Canadian taxpayers’ other accounts, including registered retirement savings plan accounts and tax-free savings accounts, would lose the exemptions provided in the IGA and would be reportable to the IRS, Demner told Bloomberg BNA in an e-mail.

“The result could potentially be disastrous,” he said. “Canadian banks could find themselves in an untenable position, and one which could have serious economic repercussions.”

Roanne C. Bratz, a partner in the Montreal office of Stikeman Elliott LLP, agreed Aug. 19 that a ruling in the plaintiffs’ favor could be seen as support for similar legal challenges in other jurisdictions. “Of course, the basis for the Canadian judgment would be key in determining the extent of such jurisprudential support,” Bratz told Bloomberg BNA in an e-mail.

In any event, there will be significant uncertainty regardless of the outcome of this first ruling in the Canadian lawsuit, she said. “Whichever side is victorious at first instance, it is certain that appeals will be filed, so a realistic final determination is not imminent,” she said.

Bratz also noted the lawsuit in the U.S. filed by Republican presidential candidate Sen. Rand Paul (Ky.) that challenges the validity of FATCA-related IGAs signed by the U.S. with Canada, the Czech Republic, Israel and Switzerland (135 DTR K-4, 7/15/15).

Veronika Chang, head of the U.S. law practice group with Toronto law firm Morris Kepes Winters LLP, suggested Aug. 19 that while a ruling in the plaintiffs’ favor would invalidate Canada’s IGA, it would not affect the underlying requirements imposed by FATCA.

The ruling could inconvenience Canadian financial institutions and potentially spur similar court challenges in other jurisdictions, but that won’t help Canadian taxpayers, Chang told Bloomberg BNA in a telephone interview. “At the end of the day, I don’t see it changing much,” she said.

Details of Tax Treaty Implications

The first portion of the lawsuit addresses the arguments by plaintiffs Virginia Hillis and Gwendolyn Deegan, dual citizens who were born in the United States, that the requirements in the IGA for provision of account holder information to the IRS is more extensive than permitted by Articles XXVI-A, XXVII and XXV of the bilateral income tax treaty.

They argued that only a tiny subset of the information collected by the Canada Revenue Agency from Canadian financial institutions would be legally disclosable under the treaty and that the information would not provide any benefit to the IRS, demonstrating that coverage of Canada under FATCA was unnecessary.

It is impossible to guess on which side of the case the ruling will land, but there is a reasonable chance that the court could “bite” on the plaintiffs’ arguments, Berg said.

“Taken at face value, the plaintiff’s position would greatly limit the exchange of information contemplated by FATCA, which the defendants argued could not reasonably be what Canada and the U.S. intended when they entered into the IGA. The defendants proffered the counter-argument that under Canadian law interpreting a tax treaty is different than interpreting a statute,” Berg said.

The main portion of the lawsuit argues that the Canada-U.S. IGA, signed Feb. 5, 2014, violates basic freedoms guaranteed by Canada’s Charter of Rights and Freedoms and the unwritten constitutional principle against forfeiting sovereignty to a foreign state.

Federal lawyers countered that the IGA’s provisions are constitutional because they don’t cede sovereignty, and if they do violate Charter rights, the infringements are justified to relieve Canadian financial institutions and their clients from the “crippling” consequences of non-compliance with FATCA.

Canada’s Model 1 IGA relieves Canadian financial institutions from having to file reports directly to the IRS, instead reporting to the CRA, which would then provide the information to its U.S. counterpart. That eliminates concerns about compliance with Canadian privacy laws and protecting the exchanged information under Article XXVII of the bilateral tax treaty.

The IGA also clarifies that Canadian institutions aren’t required to report on certain classes of accounts, exempts smaller deposit-taking institutions from FATCA reporting requirements, exempts Canadian institutions from mandating closure of client accounts and provides simpler rules than those in FATCA.

To contact the reporter on this story: Peter Menyasz in Ottawa at correspondents@bna.com

To contact the editor on this story: Rita McWilliams at rmcwilliams@bna.com

The above story appeared in:
Daily Report for Executives
Daily Tax Report”

— HERE IS COMMENTARY ON THE ARTICLE BY USCitizenAbroad:

@Stephen Kish

Thanks for posting this article and I agree with your statement that:

This article is interesting as it largely takes our lawsuit seriously. Unfortunately, none of “us” (Ginny and Gwen, our supporters harmed by the Canada-U.S. FATCA IGA) were interviewed.

The article reveals a “FATCAnatic Tax Practitioner” perspective of the situation. The article and comments reported are a testament to how far the @ADCSSovereighty FATCA lawsuit has achieved. The FATCAnatics are VERY CLEARLY taking the lawsuit seriously.

This important piece of wisdom comes to mind:

First they ignore you, then they laugh at you, then they fight you, then you win.

Mahatma Gandhi

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cross posted from ADCSovereignty WordPress Blog

With such an amazing group, it’s simply NOT possible to NOT succeed! Thanks from @ADCSovereignty https://t.co/qm23ib8Ah1

— ADCSovereignty (@ADCSovereignty) August 18, 2015

This afternoon I received news that the Alliance For The Defence of Canadian Sovereignty had  met its $500,000 funding goal. I had two simultaneous/thoughts or reactions.

My first thought was that I was always completely confident that we would achieve our funding goals. You would never allow us to fail. (Ask Stephen. I have never for a moment doubted the funding!)

My second thought was a feeling of amazement. Did we really do this? It’s simply amazing!

Q. How could I both be so confident of our success and amazed by that very success?

A. These seemingly irreconcilable thoughts are easily reconciled because:

It’s obvious that we would achieve our funding goals because we were working with  such an amazing group of people!

It’s also important to recognize the important role played by both the Isaac Brock Society and Maple Sandbox for allowing us to publicize our FATCA lawsuit on their respective blogs. I offer a special thanks to Peter Dunn of the Isaac Brock Society and Lynne Swanson of the Maple Sandbox blogs. Without their generosity and support it would have much much harder to have reached this milestone.

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Presidential Commission Sought on U.S. Expatriates http://t.co/QBnjNJKe Finally the Democrats and Obama are seeing the light.

— Marcio V Pinheiro (@marciovp) July 31, 2012

@FATCA_Bloback I trust that before the election President Obama will address the concerns of Americans Abroad. He is a just man!

— Marcio V Pinheiro (@marciovp) June 14, 2012

President Obama is a just man. He will be re-elected. He will correct the injustices being committed against Americans Abroad.

— Marcio V Pinheiro (@marciovp) June 16, 2012

 
Marcio de Vasconcellos Pinheiro was a long-time Brocker, known primarily as “markpinetree” and also as “ThatIsMe” and “Still American.” He died on Friday night after a long struggle with cardiac disease. He was 82 years old.

He was a very kind and gentle man who suffered greatly from a feeling of betrayal from a country he chose to embrace and become a citizen of. He was a medical doctor by profession having come to the US from Brazil in 1958 for his internship and residency in psychiatry. He chose to become a dual citizen in 1967. He was very proud of his two daughters, son and granddaughter living in the US. He worried about his health and what would happen to his wife should he continue to become worse. He also was afraid to even consider renouncing, in spite of the ill effects this situation had on him, because he feared it could affect the situation of his family in the US.
 
Clearly at the mercy of tax professionals, (or IOW, clearly mislead into entering OVDI), he mentioned $300 per hour lawyer fees and he ended up paying 27.5% of his life savings. Unbelievably, he had a letter from the IRS indicating that his best course of action would be to renounce his US citizenship.
 
This was what he emailed to me to include as his personal submission to the SFC:

“I became a dual citizen in 1967. I loved the USA. Lives and worked there for thirty years. I am grateful for the way they received end treated me. I came back to my country of origin and continue to pay my income tax to the IRS. Since a few years ago I don´t believe what I am going through, I feel that I am treated very unfairly by the USA for the first time in my life. I am in failing health and I am spending sleepless nights afraid of losing my small life savings. I have to comply now with so many forms and information that it is always difficult to know if I am doing it right. I can not prove this but I suspect that my health is deteriorating because of this. I never expected one day to me in this predictament, of the USA being unfair to me.
Please so no publish my name.”
 

He seemed to enjoy and respect Robert Woods’ columns on Forbes and put many comments over the years. Here are a few of them, all of which demonstrate how proud he was to be American, how he valued what the US stood for and yet, how horrid the effects of being so were on his last years of life. I have a lot of his comments as a result of including them in the Senate Finance Committee submission since his were expressed so simply and with such heartache.
 

ThatIsMe
Mr. Wood, again thank you. I lived and worked in the USA for thirty years. In 1967 I was proud to become an US citizen. I am now back in my original country, with a failing health afraid to lose my small life savings in sleepless nights for the past many years. I never thought that this would be happening to me in my very old age. I cannot believe that this is happening in a Country supposed to be fair where there is no taxation without representation. Too late!

ThatIsMe
Mr. Wood. I don´t miss one of your articles. For the simple reason that they make sense. This is what the USA Government should be doing insofar as Americans, Dual Citizens and Green Carders living abroad. How come you can see things so clearly and the USA insists in going after innocent American citizens living and working abroad. Do they think that these Americans, who have no representation or even a voice, com be trapped and milked to help pay for the American debt? Let me confess that I have been a democrat all my life and up to recently I have supported in many ways President Obama. But against my best wishes I will no longer do it because I can´t believe what is being done to us. Is this the America that I was so proud of becoming a citizen?

ThatIsMe
Mr. Wood. Again, congratulations and thank you. What you describe is the truth. The great majority of us Americans living and working abroad are not renouncing in order to avoid paying taxes. I am beginning to explore this possibility because I cannot spend six months filing my Income Tax return to two countries, besides being double taxed. Not to speak of the enormous fear of doing something wrong and losing my life savings. Do I like this? No! But I feel I have no choice.

Thatisme

Once again Mr. Wood. I am beginning to give up. In my thirty years in America I used to hear: “you can´t fight city hall”. Never quite understood it. Now I do. In my situation I believe the best I can do is to shut up and every year go from January to September or October collecting data, filling forms and send them to a CPA in NYC to do my IRS Return, FBARS and all. In a way I am glad that I will not have much long to go in this world. And I regret having one day, many, many years ago going to an US Court and become an US Citizen. Thank you for all your help.

StillAmerican
Thank you very much. I trust you and above all your expertise and judgement. After living and working 30 years in the USA I came back to my country of origin about 10 years ago. I have nobody here who is a US CPA and understands about IRS Returns from Americans Abroad. I have one telephone number to call in Philadelphia (paid), I do not have representation (the congressmen from the last State I lived on do not accept e-mails from outside the USA. I have spent an enormous amount of time and money trying to do the right thing. I only learned about FBARS in 2009 when visiting my “children” in the USA. This was too late, I was already considered a criminal for not filing it before and the penalties were stiff and included 27.5% of my small life savings. There are so many things. For instance Americans in France do not pay US Income Tax on their French pensions. I do. If filling as a Self Employed I have to pay Self Employment Tax to two countries, 16% to each, having no return. I live in fear, the advices I get do not always coincide. I am slepless and in bad health. I don´t want to become a “victim”. I will listen attentivelly to your thoughts. Many thanks and regards.

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