Category Archives: Issues regarding US persons abroad

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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We appreciate that someone of your stature will have the media grab your story and write about the absurd (resident for taxation purposes) consequences for anyone who was born an *Accidental American* or anyone who made a choice to move outside the USA for work, for adventure, for falling in love with another country and someone from there, deciding to remain to raise their family and give their allegiance and tax dollars for services and benefits.

Thank you for letting the world know the absurdity of the consequences of US Citizenship-Based Taxation law as *US Persons* are game in countries that practice Residence-Based Taxation law, we who have some US-definition of *US Person* or citizenship, as our countries have signed intergovernmental agreements (IGAs) with the US that allow US FATCA law to override our own countries’ laws.

Perhaps will be mentioned the others who will also be affected, including those who are considering becoming permanent residents of the land of the free, those seeking US green cards, so they will make their decisions with full knowledge of both pro’s and consequences of US CBT.

Boris Johnson ‘intends to renounce US citizenship’

Good luck to you as we read of your way to freedom as your “commitment is, and always has been, to Britain”.

…and Forbes, Robert Wood, comments open: Savvy London Mayor Boris Johnson Paid IRS, Is Now Renouncing U.S. Citizenship

Update: new article and Brocker comments at The Economist, February 21, 2015 The long arm of the IRS: An Englishman’s home, The mayor of London renounces his American citizenship

Tim has provided the link to the hearing yesterday in Washington DC, with Jim Butera representing the Florida Bankers Assn against the Treasury Department.

Separate post.

I found the level of expertise to be quite amateurish. That the judges were asking the plaintiff and defendants for their opionions. And the defendant’s answers are quite ridiculous.

Also, here the Texas bankers discuss the case here.

http://www.texasbankers.com/TABC/TABCNews/Florida_and_Texas_Bankers_Associations_to_Continue_Efforts_to_Protect_Foreign_Depositors.aspx

First of all, an incredibly important and successful day with regard to the video submission to be made to the Senate Finance Committee. I heard every single moment and the effect of each of the speakers was amazingly powerful. Each participant had a different and substantive angle that addressed the issues expats face. What was so marvelous about it was that it all balanced beautifully without any conscious effort to make it do so.

We cannot wait for this to be compiled and distributed. Stay tuned!

The written testimonies and harvested comments are coming along.

The focus of all this is to demonstrate the harm done to #Americansabroad by the U.S. Government. On June 15, 2013, a meeting was held in Toronto which was designed to allow those affected to speak freely, to express the harm they felt from the actions of the US, without any fear of being recorded, photographed etc. The shared and dominant reaction that day was fear and terror. What is interesting now, is to read the comment of a non-US person, completely unconnected to the issue had to say about it. See below. The contrast today? Anger and defiance!

June 2013 – Obama’s IRS and the effect on U.S. citizens abroad

What follows are the observations of a non-U.S. citizen of a meeting of U.S. citizens abroad who have been traumatized by the IRS. This is simply incredible. It explains why many U.S. citizens abroad live in a state of terror, trauma and fear. What do they fear? They fear the government of that “great citadel of freedom and justice” – the United States of America.

I have always been under the impression that many people sacrifice their lives, families, etc. in order to get into the USA and become American citizens; and I never imagined that anyone who has this “privilege” is willing to do anything and everything to renounce their U.S. citizenship.
Recently, I met a group of people in Toronto who were claiming that they have been traumatized by the Internal Revenue Service (IRS) and its rules. My understanding from this rule, The Foreign Account Tax Compliance Act (FATCA), is IRS requires US persons to report their financial accounts outside of USA.
At first glance this issue didn’t seem to be a problem with this issue, and the first question that popped up in my mind was, why are these so called “US citizens” having problems complying with their civic duties; after all, Canadian citizens are also required to report their income, gains, losses, and assets to Canada Revenue Agency (CRA).
Then, I realized that the IRS and some US officials are working with foreign governments and financial institutions to become a vehicle to disclose private and confidential financial information of their American citizens and clients to the IRS. Now, I am thinking, why should Canadian tax money subsidize collection costs of a foreign agency? Don’t we have enough challenges in Canada that need immediate attention?
However, the momentum of this meeting changed drastically after just a couple of minutes, when the first attendee stood up to introduce herself, giving her reasons to be there, instead of enjoying the beautiful and pleasant weather, that Saturday morning.
A mature lady from the front row stood up, and said that she left US in the sixties, and has been in Canada, her new home, ever since, and she obtained her Canadian citizenship in the early nineties. She and her husband, who passed away a couple of years ago, considered themselves as good citizens, who paid their taxes, obeyed the law of the land, and raised their children with the same values.
She seemed to be very upset, apprehensive, and afraid of her future in her retirement years.Apparently, she has been notified, some time within the last three years, that she must comply with the new US rules, and is about to lose her life savings, which by the way were earned in Canada, by her and her late Canadian husband over the last forty years to IRS, because she was born in United States of America.
The second lady introduced herself and said that she came to Canada about 35 years ago, worked here and raised her family. She emphasized that all these years, she has been in compliance with IRS and its rules and regulations. She and her Canadian husband invested in a mutual fund over years in Canada. She broke down in tears just after a minute, as she described that recently she also has learned about rather confusing FATCA rules that could drastically affect her family in her retirement years.
The rest of the attendees followed suit and one by one described their circumstances and expressed their emotions in different ways, a few cried heavily, some were very angry, and many were extremely attentive and laser focussed, grasping as much information as they could that could help their situations.
These strangers, who have never met each other in the past, started to bond with each other, engaging, sharing their experiences, describing the circumstances they were in, offering the knowledge they have obtained in the last few short years, etc. for 6 continued hours under one roof.
In my short life I witnessed many people from many walks of life who cried in public for different reasons: loss of health, loved one, home, asset, career, passion, etc. However, it was painful to observe experienced grown men and women succumb to the pressure of “what if IRS does…., what will happen to me and my family.”
Probably FATCA was originally designed for those are involved with offshore tax evasion, and recover unpaid federal taxes, however, watching these people and their suffering tells me that there has not been sufficient consideration in recognizing different scenarios, or communicating with the public. I guess when there is a fire, wet and dry burn together.
We live in a violent world, and violence manifests itself into a variety of shapes and forms. Some of us are born to survive and some are here to fight with those who abuse their power. Either way there is a hefty toll has to be paid: financially, emotionally, and socially. Those who have the privilege of designing and deciding on policies that affect a significant portion of population should consider how their actions contribute to human progress.
Then there is the question of how much value a government allocates to patriotism. All these attendees expressed their genuine devotion to the idea of America and being American patriots, However many of them seriously consider the option of renouncing their citizenship, mainly because of the shortcomings of the present US administration. Neither money, nor force can replace the value of loyalty of citizens to their land and identity.Can a government afford to lose its most valuable assets – Its citizens!

On a different note, Tim has provided the link to the hearing yesterday in Washington DC, with Jim Butera representing the Florida Bankers Assn against the Treasury Department.

A research project undertaken by James Eastman-Timmons, an MA student from Carleton University in Ottawa, has been expanded to include volunteers from across Canada. Interviews can be done via phone, and I believe James is hoping to have all interviews completed by the end of this month. I have participated and encourage others to do the same. Following is an invitation from the researcher:

I am looking for current and former American­-Canadian dual citizens residing in Canada to participate in a study. The study is on the extent to which current American-­Canadian dual citizens consider their status to be inconvenient or burdensome. This study also examines whether former American-­Canadian dual citizens (and are now Canadian citizens only) perceived their status to be inconvenient or burdensome, and whether this perception influenced their decision to renounce (give up) their US citizenship. The study will also explore how current and former American-Canadian dual citizens feel about the US tax laws. The researcher for this study is James Eastman­-Timmons, an MA student at Carleton University, in the Sociology & Anthropology department.

Individuals interested in participating in this study, will participate in a 60 minute interview. During this time participants will be asked questions that are designed to determine the perceptions of American and Canadian citizenships and American­-Canadian dual citizenship status. These questions will also examine what former and current American-­Canadian dual citizens consider to be the benefits and burdens of this status, what their experiences are with filing U.S. tax returns, and what their sense of identity is; that is, whether they identify as American, Canadian, or both American and Canadian. Former American­-Canadian dual citizens will be asked questions intended to determine why they have renounced their U.S. citizenship, and current American­-Canadian dual citizens will be asked questions intended to determine why they have chosen to maintain this status.

If you choose to participate in the study you do not have to answer questions or discuss sensitive financial information, and you have the right to withdraw from the study at any point in time, for any reason up until February 28th 2015. All efforts will be made to ensure that the identity of all participants is protected. All individuals who participate in this study will remain anonymous in the final research project, and their responses will be non-attributable to them. By participating in this study, you will be able to share your dual citizenship stories and raise awareness about the potential financial insecurities and other difficulties that may be associated with this status.

This project has been reviewed and cleared by the Carleton University Research Ethics Board. For questions regarding ethics, the REB may be contacted at 613-­520-­2517 or ethics@carleton.ca. For those with further questions/concerns, the researcher may be contacted by email at: jameseastmantimmons@cmail.carleton.ca

Sincerely,
James Eastman-Timmons