Category Archives: Issues regarding US persons abroad

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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I believe that the two Withers LLP employees are absolutely honest, from their perspective, when they made their statement that “FATCA… is just another form”.

Here is their Thanksgiving Message to all of us, a reply from @EmBee, and my short email to one of the employees:

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I am posting this on behalf of a group of Brockers led by Charl that has written and posted a hard-hitting, to-the-point article on Naomi Wolf’s “Cloudt” Facebook page. Naomi Wolf is the author of a book entitled The End of America which lists ten steps that are bringing America ever closer to the brink. The article informs readers of an “Eleventh Step” hence the title of the article as posted at Cloudt: “The End of America”: The Eleventh Step. For publishing here at Brock and elsewhere Charl, LM and MuzzledNoMore have chosen an alternate title: America: Behind the New Berlin Wall. They want to thank their editors for their assistance as well as Gwen for her technical expertise.

https://www.facebook.com/naomi.wolf.author/posts/1497154923896906

Posting here for further discussion: https://isaacbrocksociety.ca/consulate2/comment-page-36/#comment-4379627

It is apparent procedures and even specific questions to us from those asking will vary from one “foreign financial institution” (better known as our local CANADIAN banks, credit unions, insurance companies, etc.) to another, not to mention one country to another. Sort of like our experiences at US Consulates around the world — not necessarily the same experience for one person than another!

KCam says
November 20, 2014 at 11:55 am

Just following up on the RBC issue for anyone that is interested. RBC froze access to my new DI account until they see my CLN. They allowed the money to come in, but then froze it! They want this because they did not like that I answered positively to “born in the US” on one form and filled out a W8 Ben saying I am not a US citizen (because I relinquished prior to 1995 through government employment.)

So, I figured I’d give them a chance to resolve:
1. By not worrying about it because TFSAs and RRSPs are not reportable and that is what I ahve in the account, or
2. By allowing me to provide “reasonable explanation” other than a CLN that explains why I am not a US citizen, and by showing that I am not required to have notified the state department of my renunciation because it occured prior to 1995.

After several phone calls, the bank advises that they will not accept anything other than a CLN. Further, while RRSPs and TFSAs are not reportable, their policy is collect the paperwork regardless. This means my only option is to liquidate or transfer my account to have access to manage my funds prior to receiving a CLN.

Does anyone have experience with a Canadian FI that would not hold this same policy?

…(Further) it is a registered account and was a transfer from another FI. They accepted the transfer with the paperwork provided, then froze it. They will only allow me to transfer or withdraw but can not manage the funds within it.

George comments to @WhatAmI,

“Still, to refuse to hold registered accounts without a CLN is a BAD sign.”

Its not a “bad sign” rather its Ultra Vires and unlawful discrimination.

Everything needs to be documented in writing and the firm needs to be first advised they will be taken to Court if they do not change and if they fail to change be taken to Court.

Note I am assuming this is FATCA related and not Registration S related of the Securities Act which is another kettle of fish.

MORE from US_Foreign_Person and George:
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