Somewhere around right about now, three years ago, the worldwide U.S. person horror show began its gruesome run. This fright night still plays strong in pretty well any country outside the United States that you may happen to reside in.

Here are my nominations for the top three quotations so far, in chronological order. Notice that two of the three characters have already departed the scene.

 
FATCA has far-reaching extraterritorial implications. It would turn Canadian banks into extensions of the IRS and would raise significant privacy concerns for Canadians. … Canada is not a tax haven. People do not flock to Canada to avoid paying taxes.
—  Jim Flaherty  (then Canadian Minister of Finance)  16 Sept 2011

 
My message on this one is to sit tight. We are not unreasonable. We are not unsympathetic. We are not irresponsible.
—  David Jacobson  (then US Ambassador to Canada)  18 Oct 2011

 
Political signals from the United States show that expatriation and tax policies are likely to get harsher. … The cost of expatriation now is less than the expected future cost of expatriation. Better to take the medicine now rather than later. … Expect the same exit tax rules, but more of them, and worse. Expect more expatriations. … Get out while the getting is semi-good. Don’t wait for more time. More time means more laws.
—  Phil Hodgen  (still a tax lawyer)  5 June 2012
 

Feel free to propose other sourced contenders in comments to this posting.
 

From “JC”:

https://fatcalegalaction.com/ now live.

Attorney Bopp has issued a legal opinion on FATCA stating three constitutional claims, with strong legal merit, can be brought against the legal requirements imposed by the Foreign Account Tax Compliance Act (FATCA) and the Foreign Bank Account Report (FBAR).

Yes FBAR!

According to James Bopp, Jr., “It is our preliminary opinion that the potentially meritorious claims are a violation of the treaty power, an 8th Amendment Excessive Fines Claim, and a 4th Amendment Search and Seizure Claim. . . . We believe that these 3 claims form the basis for a successful suit that would stop the damage that FATCA and FBAR have inflicted of U.S. citizens.”

The meat of the claim: Bopp FATCA Legal Opinion

At the start of the Legal Opinion, Mr. Bopp highlights Allison Christians’ arguments regarding the legal status of the FATCA IGAs signed by countries around the world.

The legal status of these IGAs is unclear and susceptible to challenge. They are not treaties under U.S. law because they have not be en submitted to the Senate for advice and consent pursuant to the Treaty Clause of the U.S. Constitution, Art. II, sec. 2, c l. 2. Nor ae they congressional-executive agreements because Congress has not authorized the Treasury Department to conclude the IGAs as part of the FATCA implementation effort. Instead, the Treasury Department appears to be treating the IGAs as treaty-based agreements, interpreting the information exchange provisions of existing tax treaties and tax information exchange agreements already in place with FATCA Partners. However, Allison Christians, a tax law expert and associate professor of tax law at McGill University in Montreal, argues that none of the IGAs are properly considered treaty-based agreements. Allison Christians, The Dubious Legal Pedigree of IGAs (And Why it Matters), Tax Notes International Vol. 69, No. 6 (Feb. 11, 2013).

…

To bring the subject of one of Eric’s posts back to the forefront, State Department to hike renunciation fees to US$2,350; says “no public benefit” in respecting human right to change nationality, I add another article, today, from the U.S. — Wall Street Journal, Laura Saunders, August 30th: U.S. Fee to Drop Citizenship Is Raised Fivefold. Commenting is open and comments have started.

Advocates for U.S. expatriates reacted angrily to news of the increase. “I’m so disappointed and insulted by the continuing punitive actions of the U.S. in trying to prevent persons and companies from leaving,”

Also from the U.S., which complements the articles on higher fees for renunciation, one from the U.S. Chamber of Commerce, highlighted this morning by badger: Exit Strategy: FATCA Tax Law Keeps Pushing Americans To Give Up Citizenship. Growth opportunity — the HIRE Act continues to give.

Here’s a hot tip for accountants and tax attorneys: now is a good time to develop specialized expertise in advising clients who may be seeking to expatriate from the United States. That demographic looks more and more like a real growth opportunity.

Some firms have already figured this out!

Further to suggestion by “JC” that this be posted here at Isaac Brock:

Update (undated) from American Citizens Abroad (ACA) – Why FATCA is bad for America

There is a lot of information here. This is Americans Abroad argument why FATCA is Bad. May we at IBS comment on it with an eye to strengthening the arguments put forward, then we may send it back to Americans Abroad?

While there is lots of information at IBS there are no master documents summarising all points. Here is where Americans Abroad have a summary.

One area where it could be strengthened is mention of the tax treaties. Australia is mentioned and says that not much extra tax would be owed. Point of Information: the US wants to tax the Australian pension fund called Superannuation. Also, if you have a share/shares and get Australian dividends – there is an Australian tax break on dividends – you would likely have U.S. tax liability. Also, the US wants to tax on “passive income.” So the closer to retirement the more passive income you may have, the greater your retirement funds, the greater the U.S. double tax exposure.

Note: As has been discussed here before, ACA does not seem to represent those who wish to expatriate from the USA. It is more an organization that represents those who want to remain “Americans” and perhaps someday return to the US to live. They have well outlined much that is bad for America and may welcome additional input from some of us.

Is this what CRA, Banks & Compliance Industries have not been Upfront about? IOW, "US Persons" in Canada "Screwed" http://t.co/Roy2tWwvLZ

— U.S. Expat Canada (@USExpatCanada) August 29, 2014

I just came across a rather disturbing bit of information that destroys any sense of security we’ve derived from the statements that “CRA will not collect taxes from anyone who was a Canadian at the time the tax was incurred.”

The author claims that Canadian Financial Institutions are not signed on to the Tax Treaty and that the IRS can take the information received from the CRA, contact the bank directly and ask the bank to collect penalties (not taxes and interest?) from the account holder and remit to IRS.

This doesn’t sound correct to me as the IGA may allow the banks to give info to CRA but I’m not aware that the IGA nullifies PIPEDA, which would still stand. If the argument is made that the “Treaty” trumps domestic law, and they can get away with applying that, we are in serious trouble. Allison’s arguments become very important and the government should have listened.

This position seems to depend upon a relationship between a Canadian bank that has branches in the US:

“IRS will go with a demand to collect penalties from the account holder’s information they have received from CRA to Canadian Banks operating in the USA, namely RBC, TD, HSBC etc. Once the USA branch of Canadian Banks gets the demand letter from IRS, they will forward it to respective Canadian Branch where the account holder has account with the banks. As far as bank operation goes, they will either collect and remit the penalties on behalf of IRS or freeze the account until the penalties are paid.

If Canadian banks don’t comply with IRS demand, any payment coming to them from the U.S. will be subject to 30% withholding tax on gross income. They will be also forced out of doing business in U.S. capital markets and markets that conclude contracts in U.S. dollars, 1.e. the commodity or petroleum market.

U.S. persons now must comply with USA tax laws, or risk the discovery by the CRA and IRS which can make their life miserable and wealth diminished.”

If this is truly the case, why haven’t the compliance community/politicians pointed this out? Is this a willful omission on their part? This information comes from a company in Vancouver “Cross Border Tax Service.”

Those of you in the legal community, please weigh in on whether a subsidiary branch of a Canadian bank in the US can force the Canadian parent company to collect/withhold. It sounds rather tenuous to me yet as we have seen in the last few days, they seem to be able to do whatever they want.

Here is the article.

.

The exclusion of certain foreign-earned income (up to $95,100 in 2012) and housing benefits privileges income earned out of the country and encourages the movement of United States citizens to foreign jurisdictions.

1.    With respect to tax evasion and fraud, work to maximize wealth and income transparency. The Foreign Account Tax Compliance Act (FATCA), and similar laws adopted by other countries, represents an important legislative step forward in requiring foreign financial institutions to report balances, financial activities, and transactions to a taxpayer’s home jurisdiction. Communions that recognize the fallen nature of humanity support transparent financial reporting. This transparency fosters equality and fairness, and helps address tax avoidance and fraud, including money laundering.

2.    Work with international coalitions and communions to oppose “race to the bottom” policies enacted by states and countries that seek to attract business investment and wealthy depositors by assessing extremely low tax rates and creating secrecy jurisdictions. These policies hurt economic competition by disadvantaging companies that do not engage in tax avoidance strategies and reduce government revenues needed for domestic social and economic development.

http://pc-biz.org/PC-Biz.WebApp_deploy/%28S%283502ffivihwvy1izhaly2rpl%29%29/IOBView.aspx?m=ro&id=4857

This was posted a couple of days ago at MapleSandbox. Outraged Canadian points out 2 things to her MP; she has made a donation to ADCS to try and protect the her rights as a Canadian citizen AND that the CONS have lost a vote.

A really interesting idea here, is presenting the IGA as a public safety problem, due to the risk of identity theft. This has just been reported in Russia today. (with thanks to @STOP_FATCA). There are an awful lot of associate members of this particular committee. If you see your MP here, please consider sending him/her an email or tweet on this subject. Let them know we’re aware of the upcoming election in 2015 and that we’ll be watching. Thanks Outraged, for this idea!

Today I emailed the following letter to my MP – Blake Richards Member of Parliament (Wild Rose Alberta).

Dear Mr. Richards

In the past month I have done two things you should know about, as my elected Member of Parliament:

1. I donated money to help fund a lawsuit against my own government to protect my rights as a Canadian citizen.
2. I vowed never to vote Conservative again.
Continue reading →

http://www.bostonglobe.com/news/nation/2014/08/25/massachusetts-licenses-rejected-parts-washington/iQl5H871MxTHAqpnN1Rj7N/story.html

Susan Podziba couldn’t enter a federal building near Washington this month because her driver’s license revealed an unacceptable home state: Massachusetts.

Bay State residents can no longer use their driver’s licenses to get inside some government agencies because the state is one of nine that have not signed on to a federal law called REAL ID. If nothing changes, they will even lose the ability to display their licenses to board a plane.

The REAL ID measure presses states to verify citizenship and update security standards when they issue licenses. Congress intended the act to prevent terrorists who arrive in the country illegally from boarding planes. But officials in Massachusetts and elsewhere have balked at a program they contend costs millions, raises privacy concerns, and infringes on states’ rights.

States face no direct penalty other than the frustration of their citizens.

Some restrictions — such as the one that kept Podziba, a public policy mediator from Brookline, out of the National Oceanic and Atmospheric Administration — began in late July.

“It was bizarre, and then I really felt embarrassed,” Podziba said. “It was like wow, I am a US citizen and suddenly my Massachusetts ID isn’t good enough?”

She ended up conducting the high-level meeting in a cafeteria outside the security gate.