What do people think will happen if a “US Person” Canadian citizen gets their bank records sent on to IRS?

The Economist weighs-in with two new articles about FATCA:

Taxing America’s Diaspora: FATCA’s flaws

http://www.economist.com/news/leaders/21605907-americas-new-law-tax-compliance-heavy-handed-inequitable-and-hypocritical-fatcas-flaws

Dropping the bomb: America’s fierce campaign against tax cheats is doing more harm than good

http://www.economist.com/news/finance-and-economics/21605911-americas-fierce-campaign-against-tax-cheats-doing-more-harm-good-dropping

These are both great commenting opportunities.

Thanks to Innocente for pointing-out the additional article.

Defending wealthy tax cheats is all the rage these days

http://fortune.com/2014/06/25/foreign-tax-evasion-law/

On July 2 2014 my understanding is that Canada’s banks will be asking (at least) new account holders questions and employing a variety of approaches to establish U.S. personhood. These questions will violate Canada’s Charter Of Rights and other laws. Many of us also wonder whether the Silent Majority out there feels that such questions have no consequence.

Coming to a Canadian bank near you?

We need to know the actual questions and approaches and are focusing first on questions about U.S. personhood that will be asked by Canada’s major banks when Canadians open a NEW PERSONAL CHEQUING account after July 1. I suspect that different banks may ask different questions.

When you have this information, please provide in your comments these questions to be asked and I will update the top of this post.

[Please also read the disturbing comments below from @Pollyanna, who reports that one Canadian bank actually used information provided in casual conversations with the account manager to help establish whether the account holder is a U.S. person.]

My local Canadian bank branches provide this information on U.S. questions asked or not asked when opening a new account (this info may all be incorrect; please correct):

SCOTIA BANK: “Are you a U.S. person for tax purposes?”
http://www.scotiabank.com/ca/en/0,,6098,00.html

TD BANK CANADA TRUST: “Are you a U.S. citizen” AND “Where were you born?”
TD’s web information page: http://www.td.com/fatca/index.jsp
See: LM Correspondence with CustomerCare, TD for others to consider in relation to their own FFI’s web information and their relationship with their FIs.

HSBC CANADA: “Do you hold multiple citizenship” AND “What is your place of birth”
http://www.expat.hsbc.com/1/2/hsbc-expat/services/expat-tax/tax-matters/fatca?WT.ac=HBIB_14_5_29_home_small_pro_FATCA_Find_out_more
NEW HSBC information consent

CIBC: Local branch will receive info July 2.
Note: the link below is for CIBC World Markets, which deals with Wholesale Banking (Corporate & Institutional) as opposed to Retail Banking (Personal & Small Business). We have yet to see a CIBC FATCA page specifically written for Retail Banking clients. Perhaps as of July 2, once local CIBC branches receive info, there will be such as page on the CIBC website.
http://www.cibcwm.com/cibc-eportal-web/portal/wm?pageId=fatca&language=en_CA

BMO: “Do you have any other citizenships” (tentative per @Anne Boleyn)
http://www.bmo.com/home/about/banking/foreign-account-tax-compliance

RBC ROYAL BANK:
http://www.rbc.com/aboutus/fatca.html

I would be very skeptical of this information:

“If you open a new account and provide two pieces of ID that are not U.S. tainted and do NOT INCLUDE A CANADIAN PASSPORT (e.g., Canadian driver’s license and social insurance number are ok) and the bank has no other evidence to indicate that you are a US person (e.g., you never told the bank by mistake) no U.S. questions will be asked.

However, should you PRESENT A (TOXIC) CANADIAN PASSPORT at the time of opening an account, YOU WILL BE ASKED whether you do or do not have a U.S. place of birth.”

The way to stop the questions from being asked is to go to:

The Alliance for the Defence of Canadian Sovereignty

Another confounding dispatch from the inimitable Mr. Mopsick, this time offering some armchair quarterbacking of the June 18th IRS announcements.

Some CanCon highlights amongst the head-scratching tally of winners and losers:

With the Streamlined Express, the IRS has recognized that it is ill-equipped to hold everyone’s hand including old ladies in Canadian nursing homes who swear they see armed IRS special agents lurking around the bushes at night ready to arrest and humiliate them because they have disgraced themselves by failing to recognize their obligation as dual citizens to honor America with an annual tax return for all these years.

*****

The Canadians were not loser’s [sic] here. Continue reading →

It is estimated there are 7 million U.S. citizens living outside the United States. Some of these people don’t know that the U.S. may consider them to be citizens. The vast majority of these Americans abroad (according to U.S. law), are required to pay taxes and complete information reporting forms to the United States. Although “citizenship-based” taxation has existed for years, what is new is the enforcement.

The U.S. has enacted FATCA (“Foreign Account Tax Compliance Act”) and has signed IGA’s (Intergovernmental Agreements) in many European countries including Ireland, the UK, France, Germany, and Switzerland. Financial institutions across the globe will be required to identify accounts of “US Persons.” Starting July 1, 2014, financial institutions will begin to determine what accounts are “reportable accounts.” Information regarding those accounts will be passed on to the tax agencies of each country, who will in turn, pass this information on to the IRS. These seminars will include discussion and analysis of the IRS “relaxed opportunities” for people to come into compliance and will focus on:

Citizenship Issues:

• Are you a US citizen?

• Are you still a US citizen?

• Are your children US citizens?

• What is an Accidental American?

Tax Issues:

• Filing US tax returns

• What is involved?

• Filing information returns (FBAR, 8938, 3520A & 3520, 5471, 8621 etc)

• Reasonable cause (avoiding penalties)

Financial Planning Issues:

• Treatment of tax-deferred savings plans

• Treatment of Mutual Funds (PFICs)

Privacy Issues:

• What might FATCA mean for me?

Border Issues:

• Will FATCA make it harder for me to cross the border?

Does it make sense to give up US citizenship?

• Relinquishment

• Renouncing

Presenter: John Richardson, B.A., L.L.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
CitizenshipSolutions.ca

When: DUBLIN Tues, Aug. 12/BELFAST Wed., Aug. 20

Where: TBA

Admission: €15(Dublin)/£15(Belfast) cash payable at the door (to cover costs).

Information presented is NOT intended or offered as legal or accounting advice specific to your situation.

Straight from the donkey’s mouth:

THE GOOD – The IRS announced on June 18 that the Streamlined Filing Compliance Procedures (in place since late 2012 to help delinquent filers become tax compliant) would from 1 July be even more streamlined for non-filers who wish to become compliant. In his statement, IRS Commissioner John Koskinen said, “We’re expanding the streamlined procedures to cover a much broader group of U.S. taxpayers we believe are out there who have failed to disclose their foreign accounts but who aren’t willfully evading their tax obligations. To encourage these taxpayers to come forward, we’re expanding the eligibility criteria, eliminating a cap on the amount of tax owed to qualify for the program, and doing away with a questionnaire that applicants were required to complete.” If you want to know more about the changes see the Special Report posted on the DA website.

THE BAD – Residence-based taxation will not replace citizenship-based taxation, no matter how hard other groups representing overseas Americans argue for it. Although it is baffling that the US is paired with Eritria as the only other citizen-based taxation regime, that’s where we are! And, FATCA will come to be – but read on to see what your DA FBAR/FATCA Task Force is working toward.

THE UGLY – A Senate controlled by the Republicans will NOT be able to repeal FATCA, no matter what they say. But a Republican Senate (and Republican House) can only make things worse for the nation and the world – and for us living and working around that world.

SO – What to do?

1. Vote in November. Please request and return your ballot so that we may keep the Senate in the hands of Democrats and perhaps even see Democrats take back the House. Go to www.votefromabroad.org!

2. If you haven’t already done so, please complete the DA FATCA Survey – and do it right away. The findings will strengthen our advocacy to Congressional committees (House Ways and Means, Senate Finance and the Joint Committee on Taxation) and to the regulators (IRS and Treasury) and persuade them FATCA needs to be reformed urgently.

Our position is that banking and other financial services provided to overseas Americans should be treated as local activities and therefore not subject to FATCA reporting. We are advocating that FATCA should be reformed to include an exemption for accounts in our countries of residence – a mechanism known as the same country exception. Read more about it on our website.

We have good reason to believe we will succeed. Your DA FBAR/FATCA Task Force, along with other overseas Americans groups, has already helped achieve the establishment of the initial Streamlined Financial Compliance Procedures, plus the enhancements announced last week, as well as helping to raise the FATCA reporting threshold for overseas Americans.

SO VOTE, COMPLETE THE SURVEY AND KEEP THE FAITH!

Democrats Abroad FBAR/FATCA Task Force
Joe Green – Canada
Stanley Grossman – UK
Maureen Harwood – Canada
Carmelan Polce (Chair) – Singapore
Joe Smallhoover – France

Contact us at any time with questions or comments on fatca@democratsabroad.org

I asked Beach Metro News to publish our ADCS press release, but they said it was against policy. However, the editor told me that if I was to write a Letter to the Editor, it would go into the next edition of the paper. Sure enough, he featured it prominently on page 6 with a headline he added that couldn’t be better. Perhaps our gang could go make some comments 🙂

Click here to make comments on the online version:
GwEvil’s Letter to the Editor

The biggest chunk of money is projected to come from a provision that would force people who inherit IRAs and other retirement plans to take required taxable distributions over five years. Under current law, they take those payments over a longer period that is linked to their life expectancy. The change is expected to generate $3.7 billion in revenue over 10 years.