Category Archives: Issues regarding US persons abroad

Have you received a FATCA letter or been warned of the consequences of being a U.S. person?
 
 

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

WHERE: University of London International Hall Meeting Room,
Landsdowne Terrace, London WC1N 1AS UK
150m walk from Russell Square Tube Station

WHEN: Monday, March 2, 2015. 6:30 – 8:30 pm

ADMISSION: Admission £15. Payable in cash on the door please (to cover costs).

 
Why am I getting letters from my bank all of a sudden?
 
 
FATCA became a reality in the U.K. on July 1, 2014. Financial Institutions must search for any indicia of “U.S. Persons.” Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the process is ongoing. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.

Continue reading →

http://www.ftseglobalmarkets.com/issues/issue-80-january-february-2015/aeoi-tax-reporting-doesnt-have-to-be-taxing.html

From the back alley of the Compliance Community comes this little tidbit which reinforces concerns about what all those trustworthy banks are going to do with all that shiny US Person customer data once their new FATCA and AEOI (Automatic Exchange of Information to support the OECD’s GATCA) systems get up to cruising speed:

AEOI: Tax reporting doesn’t have to be taxing

From FATCA to AEOI, who knows what the next move will be. And, with confirmation of exact reporting rules around AEOI still up in the air, there is still much uncertainty. The point is that those who continue to paper over the cracks instead of looking for a long term solution run the risk of non-compliance to local and global regulations and reputational damage. On the flip side, financial institutions that adopt flexible technology designed to cater for future unknowns, will avoid any headaches, and have capacity to explore how best to use the new AEOI/FATCA customer data. The silverlining, of course, is that once a firm’s AEOI infrastructure is in place, it provides a goldmine of customer data. Golden nuggets that could then be used for purposes other than keeping the tax authorities happy.

Alberta online bank first in Canada to shun U.S. clients amid tax rules

Some highlights from Barrie McKenna’s new Globe and Mail article:

“The information and documentation required to open and monitor an account within [Canadian Direct Financial] for a U.S citizen or resident outside of Canada is prohibitive to providing the level of service our clients expect and deserve,” explained Kirby Hill, a Canadian Western Bank vice-president and spokesman.

A number of financial institutions in Europe and elsewhere are already balking at doing business with Americans. But Canadian Direct Financial is believed to be a Canadian first.

Canadian Bankers Association spokeswoman Maura Drew-Lytle said she was unaware of any Canadian banks refusing to do business with Americans.

“It’s discrimination based on nationality,” said Kevyn Nightingale, a U.S. tax specialist at accounting firm MNP LLP in Toronto. “FATCA has put financial institutions in a conundrum.” Mr. Nightingale said the steep compliance costs simply aren’t worth the effort for some mid-sized financial institutions.

“I’m amazed this is the first one I’ve seen so far,” he said. “I would expect there would be more.”

Patricia Moon of Toronto, who renounced her U.S. citizenship more than two years ago, said the Alberta bank’s decision not to do business with Americans “demonstrates the harm” caused by Canada’s decision to share data with U.S. tax authorities.

“If all the banks started doing this, where are you going to open an account?” wondered Ms. Moon, a director of the Alliance for the Defence of Canadian Sovereignty, which is suing the Canadian government over its decision to share personal financial information with the U.S.

http://www.theglobeandmail.com/report-on-business/international-business/alberta-online-bank-first-in-canada-to-shun-us-clients-amid-tax-rules/article23186804/

http://www.law.ubc.ca/centre-business-law/cbl-events

The Tax Law and Policy Workshop is a seminar course open to both J.D. and LL.M. students, and meets twice a week.

The sessions with visiting speakers are held generally on Fridays from 1:30pm to 3:00pm in Room 122 of Allard Hall. Map / Allard Hall, University of British Columbia, 1822 East Mall, Vancouver BC

Scholars, students, and practitioners not enrolled in the course but who are interested in particular topics are welcome to attend the Friday sessions.

For further information, please contact the instructor of the course, Associate Professor Wei Cui, at cui@law.ubc.ca.

The paper being presented was just released:
http://www.law.nyu.edu/sites/default/files/upload_documents/Ruth%20Mason.pdf

February 27, Ruth Mason (from University of Virginia Law School): “Citizenship Taxation”

WSJ Expat, February 23, 2015, by Jonathan Lachowitz: Everything U.S. Expats Need to Know About IRS Tax Forms (But Were Afraid to Ask)

With one comment so far (comments open!):

Seriously, is this for real? American expats already declare and pay (higher) taxes wherever they are resident. Perhaps all this bureaucratic nonsense ought to be scrapped? It would not hurt America to bring herself into the 21st century world of residence-based taxation. The IRS would consequently become leaner or more effective by focussing on territorial taxation. An antiquated (19th century) tax policy called citizenship-based taxation should have been written in history books a long time ago…

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…which would lead one to agree: Virginia La Torre Jeker J.D, February 23, 2015: “Why the US Tax System Needs to Change”!

…Anon is apparently one of many hapless dual-nationals now caught in the big FAT(CA) trap. He’s obviously never filed a US tax return, is clueless about FBARs, SFFA’s reportable on Form 8938, PFICs, CFCs and all other variations of the US tax alphabet soup. Now, Anon’s local bank in Saudi Arabia (which is viewed as a “foreign” financial institution for US tax purposes) is probably asking him for a so-called “FATCA certification”. In all likelihood, the bank noticed that Anon’s Saudi passport listed a US birthplace. As part of the FATCA mandate imposed on this “foreign” bank, Anon must now “certify” his US status or provide evidence satisfactory to the bank that he is no longer a US person. Anon has probably done some investigating about FATCA and what it means to be a US citizen. Anon has just been given the shock of his life.

RBC Global Asset Management Inc. Announces New Offering of Passive Foreign Investment Company Reporting Statements for U.S. Taxpayers

TORONTO, November 5, 2014 – RBC Global Asset Management Inc. (RBC GAM Inc.) today announced that Passive Foreign Investment Company (PFIC) Annual Information Statements will be made available to U.S. taxpayer clients holding certain Canadian-domiciled funds that are part of the RBC GAM fund families. These statements will be available on more than 70 RBC Funds, PH&N Funds and RBC Private Pools (RBC GAM funds) for the 2014 tax year.

“As part of our continued effort to meet the evolving needs of our clients, we are pleased to provide PFIC reporting on a wide range of our investment solutions,” said Doug Coulter, president of RBC GAM Inc. “With this reporting available on more than 70 funds and private pools offered by RBC GAM Inc., investors have a robust line-up of options that provide them with the ability to apply the appropriate tax rules to their investments according to their status as U.S. taxpayers.”

The PFIC reports issued by RBC GAM Inc. will provide U.S. taxpayers with the option to elect to treat certain RBC GAM funds as Qualifying Electing Funds (QEFs) on their U.S. tax returns. This allows U.S. investors access to capital gains tax rates on their holdings of these funds and prevents the application of certain amounts of tax deficiency interest penalties.

For more information and to access the full list of RBC GAM funds that will have PFIC reporting, please visit: RBC Global Asset Management – Passive Foreign Investment Company

More information on how to access PFIC Annual Information Statements for RBC GAM funds will be communicated in early 2015.

Americans unable to open financial accounts. In CANADA!

28 seconds ago Expats: Americans unable to open financial accounts. In CANADA! Pls RT. pic.twitter.com/luSoli0jTO

— U.S. Expat Canada (@USExpatCanada) February 21, 2015

 
 
While I don’t believe this is the first instance, I think we should start keeping a record of these and will look into a sidebar link so the discrimination is all in one place.
 
 

Spread far and wide.

“We the people”: Your voice in the US government: https://petitions.whitehouse.gov/petition/tax-us-citizens-residency-and-not-citizenship-remove-fatca-requirements-we-already-pay-taxes-abroad/dwZ1c5wL

You can also comment at this CNBC International YouTube link — click on “YouTube” in the lower right-hand corner of this video …

Related for answers to this: WSJ Expat: When American Expats Don’t Want Their Kids to Have U.S. Citizenship

SUMMARY OF ADCS LITIGATION:

We established a non-profit corporation, registered with Corporations Canada, with the overall objective of ending the harm caused by United States laws, and Canada’s compliance with the foreign laws, to people living outside the U.S.

Our corporation, the Alliance for the Defence of Canadian Sovereignty (see ADCS website), is at present focused on an ongoing lawsuit, since 2014, opposing the Government of Canada’s legislation that enables the U.S. FATCA (Foreign Account Tax Compliance Act) law. The Canadian legislation mandates that Canada must hunt down and turn over, to the U.S. Internal Revenue Service (by way of Canada Revenue), Canadians the United States deems on its own to be “U.S. persons”. ADCS claims that the Canadian legislation violates Canada’s Constitution (sovereignty) and Charter of Rights and Freedoms.

The four Directors of ADCS are: Stephen Kish (Chair, Toronto Canada), John Richardson (Co-Chair, Legal Counsel, Toronto), Patricia Moon (Secretary-Treasurer, Toronto) and Carol Tapanila (Calgary, Canada).

ADCS-ADSC CANADIAN FATCA IGA LAWSUIT:

— On April 21, 2014 our Alliance for the Defence of Canadian Sovereignty (ADCS-ADCS; “ADCS”) is legally incorporated in Canada under the Canada Not-for Profit Corporations Act.

— On August 11, 2014, Constitutional Litigator Joseph Arvay, acting on behalf of Plaintiffs Ginny Hillis and Gwen Deegan, and the Alliance for the Defence of Canadian Sovereignty, files lawsuit in Canadian Federal Court opposing the legislation enabling the FATCA IGA. See Claims (amended 2014.10.07).

The trial is split up into an “Tax Treaty” trial (August, 2015) and a “Charter” trial (January, 2019).

— On September 16, 2015, Justice Martineau rules against Plaintiffs’ claims argued in August 4-5 2015 “Tax Treaty” Summary Trial. However, he notes that the Charter of Rights and Freedoms and Constitutional claims filed in August 2014 were separate and not dealt with in the summary trial.  Isaac Brock Society thread on Justice Martineau’s decision. See: https://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/119873/index.do

— We were also unsuccessful in an injunction to prevent the September 2015 FATCA turnover.

— Our Charter-Constitutional trial took place on January 28 to February 1 2019 in Canada’s Federal Court in Vancouver. We lost the decision.

— We  appealed the Federal Court ruling on the 2019 Charter trial, to Canada’s Federal Court of Appeal, but lost the decision.

On January 10, 2023 our Appellant, Gwen, filed a “leave to appeal” request in the Supreme Court of Canada asking the Court to accept her application to hear the appeal.  In argument Gwen asked Court to consider both Charter sections 8 and 1.  Section 8 protects against “unreasonable” searches or seizures and section 1 protects rights and freedoms subject to reasonable limits.

On July 13, 2023 the Supreme Court of Canada decided not to hear the appeal, thus exhausting our last opportunity to appeal in the Canadian courts.     

Given the Supreme Court decision, the Alliance for the Defence of Canadian Sovereignty (ADCS) has decided to abandon its efforts to end the Canadian legislation enabling the U.S. FATCA law — and will dissolve our non-profit corporation.

The ADCS Board thanks many for past support which made this lawsuit possible: the brave plaintiffs and appellants Gwen, Ginny, and Kazia, the Isaac Brock Society, and the hundreds of people who, since 2014, contributed financially and in other cases their encouragement that this legal challenge was necessary.

Thank you all for your support,

Alliance for the Defence of Canadian Sovereignty

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