Category Archives: Issues regarding US persons abroad

Well guess what bit of legislation just passed in the House of Representatives today? The legislation is the ABLE Act or Achieving a Better Life Experience topbankinfo.ru. This new act uses the tax system to allow disabled people to save for their future needs. Ironically enough it sounds a lot like Canada’s Registered Disability Savings Program (RDSP).

http://www.casey.senate.gov/newsroom/releases/able-act-takes-major-step-forward-after-bipartisan-vote-of-house-ways-and-means-committee

I have received my (not) FATCA letter.

Background:  I opened my Scotia iTrade account without providing citizenship information. I was a permanent resident of Canada at the time. I did not fill out US paperwork W-9 or W-8BEN. The trading account is inactive. I have whited-out the account number and address.

Last Friday, I received a voice message from Scotia iTrade regarding this case number. I am planning to ignore them for the moment. This will, of course, increase the cost of FATCA implementation.

Observations:

1. The letter makes no mention of freezing or closing my account. But it does say I must respond to the letter or I will be subject to 30% withholdings on US income sources.
2. It seems that this is a fishing expedition to obtain US status information.
3. Renewal of the forms must take place every three years. This is new to me.
4. Certain information is allegedly “required” to open an account–such as “driver’s license, passport, citizenship card or age of majority card”. Does this mean if you prove you are a Canadian resident, they will be satisfied?
5. No mention of FATCA or new Canadian regulations conforming to FATCA appear in this letter. Instead, Scotia iTrade claims to be “a Qualified Intermediary for the Unites States Department of Treasury Internal Revenue Service (IRS)”.

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Nigel Green, CEO of the deVere Group, has issued a strong statement of support for Boris Johnson, Mayor of London.  Mr. Green is well known for his opposition to FATCA and CBT and has been a consistent champion for US Persons worldwide. Green declared, via his blog:

“Boris Johnson’s noble and brave stance against this fatally flawed, imperialistic and economically dangerous law, means he is legally in the wrong, yet morally he is right.

“Whilst I wouldn’t advocate that individuals do not comply with FATCA – instead they should explore all the available options to mitigate its adverse effects – I do hope the Mayor’s apparent FATCA crusade will serve as a call to arms to other high profile personalities to publicly express their opposition to this highly-polemical new law.”

Related articles:

http://www.nigel-green.com/2014/11/29/boris-johnson-still-refuses-to-bow-down-to-fatca/

http://www.nigel-green.com/2014/11/19/u-s-citizen-and-mayor-of-london-boris-johnson-slams-fatca/

http://www.funds-europe.com/news/14732-johnson-s-anti-fatca-crusade-is-noble-says-wealth-manager

http://www.cpifinancial.net/news/post/29218/london-mayor-boris-johnson-makes-brave-stand-against-american-taxes

At the Vancouver Convention Center

As posted by CitizenshipSolutions.ca and suggested by JC for a post at Brock:

Jackie Bugnion and Roland Crim, Directors
American Citizens Abroad, Inc.
Nov. 23, 2014

Thank you, Mayor Boris Johnson, for Speaking for Many

The ending may not go down well for all. Part of the ending paragraph:

To all its Members, and indeed all Americans living overseas, American Citizens Abroad recommends strict observance of the law.

NB: CALLING ALL EU BROCKERS

I am looking for known contacts in Budapest, Bratislava, South Tyrol, Burgenland & Vienna. Interested in local information only. Complete confidentiality assured. If you know someone, please email me at nobledreamer16 at gmail dot com
 

The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. 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.
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This session was very relaxed and consisted mostly of Questions and Answers. There were a variety of “U.S.Person-types” – An older gentleman who was a border baby (literally spent days in the US) and only recently found out about his “obligations.” He was certain there just had to be an “exemption” for someone in his situation. Clearly in the midst of a long “OMG” moment. A middle-aged woman born in the US while her Canadian father was stationed at a base there. A couple (who it turns out I knew from years ago when our kids were in kindergarten together; we NEVER would have imagined meeting again under these circumstances) who came in the early 70’s long ago relinquished yet had received a 1099 from a CDN banking institution. Some people already compliant but unsure how to proceed.

A recurrent theme in the answers given was to “prioritize the stuff you can control.” A lot of discussion about whether or not it was worth it to allow this situation to run one’s life. Make a decision, act and move on. In some ways, this meeting more than others I have attended was more like a therapy session.

Phil gave a brief outline of this began back in 2008/09 with the issues of Swiss banks, etc.
There are still some cases from 2009 that are just clearing. (!) The reality is there are HNWI’s who are doing Quiet Disclosures who likely have prison problems, as well as money problems. Importance of establishing a good “reasonable cause case if choice is QD. OVDP/OVDI programs are great deals for those who would otherwise, owe much more if they were penalized in the standard way. It was clarified that the in-lieu of FBAR penalty, was one penalty per year, end of story. Not per account per violation per year. If one’s net worth is under a million dollars, there is no need to fear audits, penalties, etc.

Concerns about the exit tax if applicable. Big problems since pensions are deemed paid out in full. Including RRSP’s. This can trigger “bad tax stuff.” Exemption for $680,000 worth of capital gains. It was stated that generally, if the net worth is 7 million or less, there are ways to engineer a way out of some of the problems involved. One person wondered if it were worth it to renounce, get a TIN/SIN, file once and just let it go (equivalent of conceding “covered “ status). You make decisions you can live with. Important to follow the law. Know what the law is. Part of the problem is the industry and even the government departments tend to determine procedures which may not necessarily be the law.

Discussion of the badly-drafted 4079. Originally intended to determine that one had not lost US citizenship and now being used for the opposite purpose. The original intent of the questions: “Have you ever worked for a foreign government?” What they were aiming for was “were you a general in a foreign army” or “were you the president of another country?” Nothing like the lengths to which this question is being taken. (understandably, since it is badly-drafted).

For past relinquishments – one should not take the position one is American. Stick firmly to this. Bank employees unlikely to know much about citizenship issues. There was never a requirement then, to obtain a CLN. RBC is apparently a big problem right now.

Being rich or needing to remain American for employment situations are about the only reasons where there is a good point to keep USC. No indication of difficulties crossing the border, so not a reason to retain.

When: Sunday, November 30, 2014, 6:30 – 8:30 pm

Where:Carr Hall, St. Michael’s College, U of T, 100 St. Joseph St., Toronto ON M5S 2C4
MAP

Admission: $20 individual or $40 for a family of up to four people. Payable in cash at the door, please (to cover costs). Hope to see you and your families on November 30. Spread the word!
 
This session will feature a very special guest speaker!

#FATCA-Just Another Form? http://t.co/vZVDHXx2Yj Welcome to the Universe of the Condor- “Wonderful World of Forms, Threats and Penalties”

— Patricia Moon (@nobledreamer16) November 26, 2014

@USCitizenAbroad posted this comment on Brock but I am giving the comment its own thread so that it is not lost.

Even though Canadians rounded up and turned over by FATCA to the IRS are advised NOT to go to these people for help, for example, on whether they should or should not comply with laws of of a foreign government, or whether they are in fact a U.S. person, some will go stampeding to “Form People” for that first pass advice.

Form People (also known as “compliance condors” or “compliance vultures”) are mostly honest and hardworking, but they live in a special world — a world in which forms are sacred.

@USCitizenAbroad says this about Form People:

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