Bruce W. Bean,

Michigan State University – College of Law

AND

Abbey Wright Farnsworth,

Independent

February 25, 2015

ILSA Journal of International & Comparative Law, Vol. 21, No. 2, 2015

Abstract:

… two Canadians have filed a claim against the Canadian government asserting that the IGA entered into by the United States and Canada to implement FATCA violates several provisions of the Constitution of Canada,166 including Canada’s Charter of Rights and Freedoms, the Income Tax Act of Canada, and the Canada-U.S. Tax Treaty. The agreement requires Canadian FFIs to hand over information on qualifying accounts to Canadian tax authorities, who will in turn submit the information to the IRS.

… Additionally, there is concern that the agreement disregards the principle of maintaining sovereignty. The claimants and many other Americans living in Canada feel “entrapped in U.S. citizenship” and that their rights are being violated as they are “branded” potential tax evaders.

…The U.S. Government has taken a bold step with FATCA. The legislation is by far the most egregious example of extraterritorial overreach in history and has been harshly criticized by individuals and entities alike.

 **********************

(as most of the world’s countries and *foreign financial institutions*

submissively roll over for the U.S.A.)

Have you received a FATCA letter or been warned of the consequences of being a U.S. person?
 
 

WHO: John Richardson, B.A., L.L.B., J.D. is a citizenship lawyer in Toronto and a member of the Ontario Bar.

WHERE: University of London International Hall Meeting Room,
Landsdowne Terrace, London WC1N 1AS UK
150m walk from Russell Square Tube Station

WHEN: Monday, March 2, 2015. 6:30 – 8:30 pm

ADMISSION: Admission £15. Payable in cash on the door please (to cover costs).

 
Why am I getting letters from my bank all of a sudden?
 
 
FATCA became a reality in the U.K. on July 1, 2014. Financial Institutions must search for any indicia of “U.S. Persons.” Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the process is ongoing. 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.

Continue reading →

http://www.ftseglobalmarkets.com/issues/issue-80-january-february-2015/aeoi-tax-reporting-doesnt-have-to-be-taxing.html

From the back alley of the Compliance Community comes this little tidbit which reinforces concerns about what all those trustworthy banks are going to do with all that shiny US Person customer data once their new FATCA and AEOI (Automatic Exchange of Information to support the OECD’s GATCA) systems get up to cruising speed:

AEOI: Tax reporting doesn’t have to be taxing

From FATCA to AEOI, who knows what the next move will be. And, with confirmation of exact reporting rules around AEOI still up in the air, there is still much uncertainty. The point is that those who continue to paper over the cracks instead of looking for a long term solution run the risk of non-compliance to local and global regulations and reputational damage. On the flip side, financial institutions that adopt flexible technology designed to cater for future unknowns, will avoid any headaches, and have capacity to explore how best to use the new AEOI/FATCA customer data. The silverlining, of course, is that once a firm’s AEOI infrastructure is in place, it provides a goldmine of customer data. Golden nuggets that could then be used for purposes other than keeping the tax authorities happy.

Alberta online bank first in Canada to shun U.S. clients amid tax rules

Some highlights from Barrie McKenna’s new Globe and Mail article:

“The information and documentation required to open and monitor an account within [Canadian Direct Financial] for a U.S citizen or resident outside of Canada is prohibitive to providing the level of service our clients expect and deserve,” explained Kirby Hill, a Canadian Western Bank vice-president and spokesman.

A number of financial institutions in Europe and elsewhere are already balking at doing business with Americans. But Canadian Direct Financial is believed to be a Canadian first.

Canadian Bankers Association spokeswoman Maura Drew-Lytle said she was unaware of any Canadian banks refusing to do business with Americans.

“It’s discrimination based on nationality,” said Kevyn Nightingale, a U.S. tax specialist at accounting firm MNP LLP in Toronto. “FATCA has put financial institutions in a conundrum.” Mr. Nightingale said the steep compliance costs simply aren’t worth the effort for some mid-sized financial institutions.

“I’m amazed this is the first one I’ve seen so far,” he said. “I would expect there would be more.”

Patricia Moon of Toronto, who renounced her U.S. citizenship more than two years ago, said the Alberta bank’s decision not to do business with Americans “demonstrates the harm” caused by Canada’s decision to share data with U.S. tax authorities.

“If all the banks started doing this, where are you going to open an account?” wondered Ms. Moon, a director of the Alliance for the Defence of Canadian Sovereignty, which is suing the Canadian government over its decision to share personal financial information with the U.S.

http://www.theglobeandmail.com/report-on-business/international-business/alberta-online-bank-first-in-canada-to-shun-us-clients-amid-tax-rules/article23186804/

http://www.law.ubc.ca/centre-business-law/cbl-events

The Tax Law and Policy Workshop is a seminar course open to both J.D. and LL.M. students, and meets twice a week.

The sessions with visiting speakers are held generally on Fridays from 1:30pm to 3:00pm in Room 122 of Allard Hall. Map / Allard Hall, University of British Columbia, 1822 East Mall, Vancouver BC

Scholars, students, and practitioners not enrolled in the course but who are interested in particular topics are welcome to attend the Friday sessions.

For further information, please contact the instructor of the course, Associate Professor Wei Cui, at cui@law.ubc.ca.

The paper being presented was just released:
http://www.law.nyu.edu/sites/default/files/upload_documents/Ruth%20Mason.pdf

February 27, Ruth Mason (from University of Virginia Law School): “Citizenship Taxation”

WSJ Expat, February 23, 2015, by Jonathan Lachowitz: Everything U.S. Expats Need to Know About IRS Tax Forms (But Were Afraid to Ask)

With one comment so far (comments open!):

Seriously, is this for real? American expats already declare and pay (higher) taxes wherever they are resident. Perhaps all this bureaucratic nonsense ought to be scrapped? It would not hurt America to bring herself into the 21st century world of residence-based taxation. The IRS would consequently become leaner or more effective by focussing on territorial taxation. An antiquated (19th century) tax policy called citizenship-based taxation should have been written in history books a long time ago…

**************
…which would lead one to agree: Virginia La Torre Jeker J.D, February 23, 2015: “Why the US Tax System Needs to Change”!

…Anon is apparently one of many hapless dual-nationals now caught in the big FAT(CA) trap. He’s obviously never filed a US tax return, is clueless about FBARs, SFFA’s reportable on Form 8938, PFICs, CFCs and all other variations of the US tax alphabet soup. Now, Anon’s local bank in Saudi Arabia (which is viewed as a “foreign” financial institution for US tax purposes) is probably asking him for a so-called “FATCA certification”. In all likelihood, the bank noticed that Anon’s Saudi passport listed a US birthplace. As part of the FATCA mandate imposed on this “foreign” bank, Anon must now “certify” his US status or provide evidence satisfactory to the bank that he is no longer a US person. Anon has probably done some investigating about FATCA and what it means to be a US citizen. Anon has just been given the shock of his life.

RBC Global Asset Management Inc. Announces New Offering of Passive Foreign Investment Company Reporting Statements for U.S. Taxpayers

TORONTO, November 5, 2014 – RBC Global Asset Management Inc. (RBC GAM Inc.) today announced that Passive Foreign Investment Company (PFIC) Annual Information Statements will be made available to U.S. taxpayer clients holding certain Canadian-domiciled funds that are part of the RBC GAM fund families. These statements will be available on more than 70 RBC Funds, PH&N Funds and RBC Private Pools (RBC GAM funds) for the 2014 tax year.

“As part of our continued effort to meet the evolving needs of our clients, we are pleased to provide PFIC reporting on a wide range of our investment solutions,” said Doug Coulter, president of RBC GAM Inc. “With this reporting available on more than 70 funds and private pools offered by RBC GAM Inc., investors have a robust line-up of options that provide them with the ability to apply the appropriate tax rules to their investments according to their status as U.S. taxpayers.”

The PFIC reports issued by RBC GAM Inc. will provide U.S. taxpayers with the option to elect to treat certain RBC GAM funds as Qualifying Electing Funds (QEFs) on their U.S. tax returns. This allows U.S. investors access to capital gains tax rates on their holdings of these funds and prevents the application of certain amounts of tax deficiency interest penalties.

For more information and to access the full list of RBC GAM funds that will have PFIC reporting, please visit: RBC Global Asset Management – Passive Foreign Investment Company

More information on how to access PFIC Annual Information Statements for RBC GAM funds will be communicated in early 2015.

Americans unable to open financial accounts. In CANADA!

28 seconds ago Expats: Americans unable to open financial accounts. In CANADA! Pls RT. pic.twitter.com/luSoli0jTO

— U.S. Expat Canada (@USExpatCanada) February 21, 2015

 
 
While I don’t believe this is the first instance, I think we should start keeping a record of these and will look into a sidebar link so the discrimination is all in one place.