Introduction and background …

As reported by Helen Burggraf of American Expat Finance with a general description of the problem …

Does Congress hate all Americans or only #Americansabroad who married an alien – AKA the #FBARMarriage: "Potentially significant error in 2018 IRS tax guide for 'certain married taxpayers filing separately' in Expatland" https://t.co/fHyFyaflhv

— U.S. Citizen Abroad (@USCitizenAbroad) December 19, 2019

As reported by Virginia La Torre Jeker of US-tax.org with a more technical description of the problem …

It's not that Congress doesn't care. It's that it doesn't care that it doesn't care! #Americansabroad get ZERO concern/attention from Congress: "ATTENTION! Married Filing Separately? $5 of Gross Income? Must File US Income Tax Return!" https://t.co/kp3kkb0PlZ via @VLJeker

— U.S. Citizen Abroad (@USCitizenAbroad) December 19, 2019

The TCJA created a situation where every “resident” member (nonresident aliens excepted) of America’s unique “Tax Form and Penalty Club” who is foolish enough to use the “Married Filing Separately” filing status, is required to file a 1040 even if they have no income.

Before moving to the main point of this post, two technical observations are in order:

1. The “married filing separately” status is generally the most punitive filing category there is (America does have a tax penalty for marriage) and is generally a separate tax on Americans abroad; and

2. The “married filing separately” status is particularly common in an “FBAR Marriage” (the type of marriage where a “nonresident alien” marries an American citizen).

As the post by Virginia La Torre Jeker (in particular) notes, Americans abroad are more likely to use the “Married Filing Separately” category because they are more likely to be married to an alien (grounds for special punishment perhaps?). The “alien” spouse can file jointly with the American (See Internal Revenue Code 6013(g). Although possible, and although there may be good tax reasons to do so, generally it would not be good for the health of the marriage to invite the “nonresident alien” spouse into the U.S. tax system. For examples of what this all means from a tax perspective read here. For an example of the problems this can cause see here. (Thanks to Virginia La Torre Jeker for all of these posts.)

Main point – Does equal protection require the “equal concern and respect of the legislature”?
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Someone wrote me that, ‘FATCA is a problem for residents of Canada only because the United States sticks to its outdated policy of citizenship-based taxation.'” Although there has been some political movement to end the worst effects of citizenship-based taxation, a recent article from American Expat Finance by Helen Burggraf, suggests that the politics of changing U.S. tax policy for Americans abroad may – with the possible retirement of Congressman Holding – become more difficult.

Democrats Abroad has been questioning prospective nominees about their positions on each of FATCA and citizenship-based taxation.   It has phrased its question in a way that assumes that a move to citizenship-based taxation to residence-based taxation would result in no loss of tax revenue to the United States Treasury.  John Richardson, Karen Alpert and Laura Snyder explain why they feel this is an inappropriate and dangerous assumption in the following article, reprinted with permission of TaxConnections.
Democrats Abroad (DA) recently reached out to the Democratic presidential candidates to ask them about issues relevant to Americans living overseas. The questions DA posed and the responses it received can be accessed here.

We strongly applaud DA for this valuable initiative. But we believe that it is important—indeed, vital—to call out the framing of this question:

“Most Americans living abroad think that the time has come for Residency-Based Taxation, the principle guiding all other countries’ tax systems and a fix for numerous unjust burdens on Americans living and working abroad. There are bi-partisan, revenue-neutral proposals to implement RBT that include robust provisions to protect the law from abuse by tax evaders. All we need is a moment of leadership to get this done. Will you be that leader?”

We believe that it is a grave error to condition a move to residency-based taxation (RBT) upon a demonstration of revenue neutrality. Doing so would serve to perpetuate the immoral and unjust system in place today.

These are the reasons why:

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“The Department of Homeland Security is proposing a rule that would allow the government to use facial recognition data to identify everyone traveling to and from the country, including U.S. citizens.

Non-citizens traveling through U.S. airports have been required to get their fingerprints scanned and have their picture taken since the mid-noughties. American citizens have enjoyed the choice of opting out of this requirement. However, in a recent regulatory filing, DHS is pushing to require all international travelers — including U.S. citizens — have their photograph taken.

“To facilitate the implementation of a seamless biometric entry-exit system that uses facial recognition and to help prevent persons attempting to fraudulently use U.S. travel documents and identify criminals and known or suspected terrorists, DHS is proposing to amend the regulations to provide that all travelers, including U.S. citizens, may be required to be photographed upon entry and/or departure,” the filing continues.”

Read more at

https://amp.dailycaller.com/2019/12/03/dhs-to-use-facial-recognition-on-citizens?__twitter_impression=true&fbclid=IwAR1v_ncsVG2LguKF50Eu_klmfAh1GOQqY6F4hA7SIpTQg6Wqda9tXrwOJa0

Note that any citizen of any country in the rest of the world had been required to register their biometrics, now US citizens outside the razorwire must be identified also.

https://isaacbrocksociety.ca/2016/09/30/fatca-came-last-to-eu-but-mandatory-fingerprinting-was-first/

Currently, the only people not assumed to be guilty of crimes are US citizens living inside USA, but that’s not stopped most other stompings on the Bill of Rights

Article from U.S. Tax Lawyer Stanley C. Ruchelman and Toronto lawyer Sunita Doobay about the @ADCSovereignty #FATCA Canada lawsuit. The article is a good argument for donating to the appeal – this issue needs to go to the Supreme Court of Canada! https://t.co/BDHY0vorwm pic.twitter.com/e4M06HIPmY

— U.S. Citizen Abroad (@USCitizenAbroad) December 3, 2019

All I can say is that if you read the article referenced in the above tweet you will see why the FATCA lawsuits are important. An excerpt includes:

Deegan v. Canada

A similar conclusion was reached in Deegan v. Canada.18 The provisions of the Implementation Act and Sections 263 to 269 of the Income Tax Act, R.S.C. 1985 (5th Supp.), were challenged by individuals who were accidental Americans.

The plaintiffs alleged that those provisions cause Canada to act as an intermediary between Canadian financial institutions and the I.R.S. Those institutions are required to provide C.R.A. with certain information concerning financial accounts belonging to customers whose account information suggests that they may be U.S. persons. C.R.A. then provides that information to the I.R.S. As a result, the plaintiffs alleged that the provisions of the Implementation Act violate the Canadian Constitution,19 asserting that they constitute an unreasonable seizure of financial information belonging to U.S. persons in Canada. The plaintiffs also alleged that the information exchange under the Implementation Act violated other provisions of the Canadian Constitution because they singled out individuals based on citizenship or national or ethnic origin.20 Finally, the plaintiffs alleged that the violations do not constitute reasonable limitations on the privacy and equality rights of affected individuals.21

The Federal Court disagreed with the allegations and held that the disputed provisions of the Implementation Act are not unreasonable and do not violate the Canadian Constitution.

The information that is obtained by C.R.A. from Canadian financial institutions is not an unreasonable search and seizure. Departing from the approach taken under the revenue rule, the Federal Court determined that an expectation of privacy is appropriate principally when a Canadian statute is criminal or quasi-criminal in nature. Reporting of tax information by Canadian financial institutions to C.R.A., and ultimately to the I.R.S., does not fit into that protected framework. Tax is essentially a regulatory statute, and the information relates to the manner in which income tax is calculated and collected. Hence, a lesser expectation of privacy exists.

The Federal Court also disagreed with the plaintiff’s assertion that the information is not of a kind that is regularly obtained under the Income Tax Act and therefore should not be delivered to C.R.A. Following the holding in Hillis v. Canada, the banking information is foreseeably relevant to U.S. tax compliance and can be obtained by C.R.A. pursuant to a request from the I.R.S. under Article XXVII of the Treaty.

To the extent that the disputed provisions draw a distinction based on national origin and citizenship, they are not discriminatory. In reaching its decisions, the Federal Court took into account the detailed negotiations that were carried on by the Canadian government, attempting to negotiate a carve-out for Canada. When the Canadian government realized that a carve-out was not possible, it realized that entering into an I.G.A. was the only way to avoid a potentially devastating effect on the Canadian financial sector.

The plaintiffs alleged that the purpose of the Implementation Act was to assist the U.S. government in implementing F.A.T.C.A. and finding U.S. tax evaders and cheats, a purpose that cannot be described as pressing and substantial for the Canadian government or Canadian residents. However, at the same time that Canada was negotiating its I.G.A. with the U.S. government, the O.E.C.D. was involved in developing and implementing a common standard for the automatic multilateral exchange of financial account information along the lines of the I.G.A. Hence, the Implementation Act could not be said to be out of line with global expectations of financial privacy.

Finally, the argument that the Implementation Agreement resulted in discrimination based on citizenship and national origin were misplaced. The Federal Court held that a classification based on national origin is a form of discrimination only where it perpetuates ongoing disadvantages or prejudice. That is not the case where compliance with laws of a country of citizenship are in issue.

The Charter does not require Canada to assist persons resident in this country in avoiding their obligations under duly-enacted laws of another democratic state, nor does it require this country to shelter those living in Canada from the reach of foreign laws. Indeed, as was noted earlier, insulating persons resident in this country from their obligations under duly-enacted laws of another democratic state is not a value that section 15 of the Charter was designed to foster.

Overall, the arguments raised by the plaintiffs paled in comparison to benefits that are derived by the banking industry in Canada. The I.G.A. was necessary for Canadian financial institutions to be deemed compliant with the requirements of F.A.T.C.A. and simplified the related data gathering obligations. In sum, the Implementation Act allowed Canadian financial institutions to avoid 30% withholding taxes on the receipt of capital payments on loans to U.S. residents and simplified the information gathering that would otherwise have been required under F.A.T.C.A.

(The author appears to imagine the the purpose of the Charter of Rights is to protect the banks.)

Notice that the “U.S. Centric” tone to the article which underscores why the FATCA lawsuits (both here and in the UK) must continue!

Many thanks to MuzzledNoMore and LM for suggesting that we have current Media Contact information readily available on the site, and for kicking this project off with the these Canada media lists.  Links to these lists at end of post.

Contact information for the remaining provinces is most welcome, as is contact information for other countries.  Each country, including Canada, will have its own Media Contact page.

If you have a list of contacts regarding a specific topic, these are equally most welcome.

I will put a link in the Sidebar linking to this post.   Once we get a second country or topical list, I will create an Index page with links to all Media Contact pages, and I will replace the original sidebar link with one to Media Contact Info index page.

MuzzledNoMore and LM have provided very comprehensive lists.  Maybe yours is much more limited.   That’s still very useful.  I can put more than one list on a Country or Topic page, and I’ll be happy to collate two or more lists together, where that may be more efficient for users.

Yukon & British Columbia newspapers contact info

Alberta & Saskatchewan local newspaper contact info

Manitoba and Ontario newspapers contact info

Coordonnées des journaux québécois 

New Brunswick newspapers conctact info

Newfoundland, Nova Scotia, Nunavut, Prince Edward Island newspapers contact info

I’m noticing two points coming up frequently on a variety of threads and a few other people have mentioned it to me (some of us, including me, are very strong supporters of these two points).

In short, these 2 points, except in replying to questions on Brock, are generally more useful when commenting in Mainstream Media or basically anywhere that isn’t Brock.  The points are:

(1)   Advising people that non-compliance may be a viable option; and

(2)   Some aspects of CBT/FATCA are not as frightening as they first seem.

On Brock, however,

(1)   It’s pretty obvious at Brock that “non-compliance is an option and here’s why” and, at the least, it’s very obvious at Brock that “You gotta slow down, it’s not that bad, and do not do anything til you know what you’re doing.”

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RefugeeFromAmerica was in contact with BMO’s President’s Office about BMO’s FATCA policies and also with the CRA Commissioner’s Office and has sent in the following report.

In response to the CBC story about the vast number of bank accounts reported to the CRA/IRS, I thought I’d share an experience we had at a BMO branch back in August. In particular, I wanted to provide a data point to corroborate the suspicion that at least some Canadian financial institutions are not observing FATCA reporting minima and that, at least at the local level, they are violating Canadian law by not readily providing information to customers about FATCA reporting. Quoted below is a previously composed account of what transpired during our branch visit [and the events that followed it]

 

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