Monthly Archives: July 2013

My Financial Career- A FATCA Chronicle

Many Canadians are familiar with the 1962 animation of Stephen Leacock’s early 20th century humorous tale of a young man’s attempt to open his first bank account. It’s worth a view, even if you’ve seen it many times before. Here’s the link:

http://www.nfb.ca/film/my_financial_career/

Now, instead of a young man rattled by a bank, think of a U.S. person having to deal with a financial institution under a Canada-U.S. FATCA IGA.

Although an IGA has yet to be announced, some FIs are already collecting information.

Similar to the Border Crossings thread, perhaps we can relate our own experiences, either in person or through online account opening. Any other information on account opening, from any source, would also be useful. It would be helpful to distinguish between banking, investment and other types of accounts.

If you have already posted your ‘story’ elsewhere, please post it again here.

And, input from our friends in other countries is most welcome.

It’s Official: No American Reciprocity

Breaking News

Just in time for US Independence Day, there is a a major AM-138-0111blow for IGAs and perhaps for FATCA itself.

James Jatras at repealfatca.com is reporting It’s Official: There Will Be No American Reciprocity

In a letter to U.S. Treasury Secretary Jack Lew, Congressman Bill Posey (R-Florida 8th), a key member of the House Financial Services Committee, has turned thumbs down on Treasury’s public claims that the U.S. will impose on American domestic financial institutions the “equivalent” of FATCA’s ruinous reporting requirements on foreign financial institutions (FFIs). It’s now clear that is not going to happen.

We’ve known for ages Americans would never agree to real reciprocity. Congressman Posey now seems to confirm that.  Given the anger in Europe over NSA, this is just going to add fuel to the fire.  It could also give Canada every reason to walk away from whatever is happening with those IGA negotiations.

Congressman Posey says:

“Given the evidence above, it is difficult to conceive of any circumstance that would justify imposing such an expensive and counterproductive domestic mandate.

James Jatras says:

It needs to be understood that this is a denial that will stick…Thus, by sounding the death knell for reciprocal authority, Congressman Posey is sinking the IGAs, and in turn FATCA itself.

Here’s what Posey himself wrote:

“Further delay in FATCA enforcement and a moratorium on negotiating and signing additional IGAs is in order,” pending “substantial modification or, more likely, outright repeal.”

 

Congressman Posey further suggests Treasury does not have the authority to negotiate IGA and suggests

A cooperative scheme to penalizing tax evasion without harming the innocent.

We’re not free yet, but I hope this will be a great step on the road to freedom.

Happy Independence Day everyone!

 

 

 

 

 

FATCA Under Fire In Canada

Globe and Mail is reporting Canada’s Information Sharing Deal With US Is Under Fire

The article covers many points we already know. It also misses some really important points.

The lead on the article says:

A debate over fighting tax evasion versus protecting personal privacy looms large for Canada as it prepares to announce a deal with the United States to share banking information.

As we know, this is NOT about tax evasion.  Canadian citizens and residents pay tax on their income from bank accounts and other assets in Canada.  Many of us have not had a connection to US in decades. Others have never had a connection to US other than being born there when parents were working in US or because their mother was sent to an American hospital to give birth.

The author reports on what Canadian banks want:

Canadian banks have urged Ottawa to take on the reporting duties through the Canada Revenue Agency, which could ensure that privacy laws are respected when information is sent south of the border.

He is not getting the point that does not resolve the problem. Why should Canadians with some obscure tie to US have to report all details about their finances to CRA when other Canadians do not.

More importantly, our information should never be submitted to a foreign government–and especially not to a foreign government which has significant problems with identity theft and protection of personal information.

He does get one point right:

There has been little debate on the issue so far, partly because no details on the talks between Canada and the U.S. have been released. However, Ottawa is promising to make the deal public once it is signed.

Queen’s law professor Art Cockfield sums it up well:

“No foreign government should be able to come into our country and demand personal information about our own citizens and residents.”

However, that statement is followed by:

The negotiations are aimed at smoothing over this problem by ensuring exchanges are mutual and at the government-to-government level.ad

No, that does not resolve or smooth over the problem. We should have the same rights as all other Canadians to manage our finances in confidence and privacy with our banks without involvement of either the Canadian or any foreign government.