Monthly Archives: August 2013

Rattle Snake Time!

FATCA, ,

rattle snakeIt’s time to move beyond mosquito and black fly time if the article No One’s Exempt From U.S. Taxman is correct.
It’s now black widow spider and rattlesnake time.
I suspect the article is more fear mongering and that the author doesn’t have any more inside information than we do.
However, this information is alarming if it is true:

Canada is currently negotiating an agreement with the U.S. that would result in the CRA being able to collect the relevant account information from Canadian financial institutions and forwarding it to the IRS. The Canadian government believes such an agreement will avoid breaking Canadian privacy laws.

I don’t think an IGA addresses privacy issues because no other Canadians are required to report such invasive information to CRA for transmission to a foreign government. In addition, an IGA will not address human rights and Charter issues. The Bank Act would also need to be changed to allow banks to ask those questions, creating a Charter issue.
Much more important to what I think is what Peter Hogg and CCLA think. They also don’t think an IGA resolves the legal barriers–including Charter issues.
I’m not sure if the author of the article is a lawyer or not. Based on his title (Manager of Legal/Compliance at an investment firms), he may be.  Yet, he didn’t use LLB after his name, which lawyers often do when writing.
But, he says:

FATCA is coming to Canada in the near future

Keep swarming, buzzing and stinging. But, now start rattling and biting! (Actually, I thought we already were, but we haven’t been able to completely kill FATCA yet.
 
 
 
 
 

Black Fly Time

FATCA, , , ,

I am attaching to this post the full text (minus my name and address) of an email I sent earlier today to Prime Minister Harper, Finance Minister Flaherty, Opposition Leader Mulcair, Justin Trudeau (Liberal leader), Elizabeth May (Green Party leader), Paul Dewar (NDP Foreign Affairs Critic and my MP), Peggy Nash (NDP Finance Critic) and Murray Rankin (NDP National Revenue Critic).  For greater effect (I hope), I sent these emails separately rather than as a bulk list or ccs.  I focused a bit on NDP members, because I want to flag the Toronto Centre dimension to current sitting members (and maybe also hand a few grenades to the other parties for the by-election, if McQuaig wins the nomination and the other recipients’ staffers pay attention).
IGA email re Cruz etc
The full text is too lengthy to post here, and perhaps arguably too lengthy as an email (more than four pages).  However, the first page summarizes the six points I wanted to make; the following pages are elaboration and a few web links supporting the points.
The gist of the email is to express opposition to a Canada-US IGA, for reasons that are already painfully familiar to regular visitors to this website – with the recent addition of the Ted Cruz story, which necessarily takes a full page on its own, to communicate exactly why I consider the treatment of his renunciation of his accidental Canadian citizenship so grotesquely disparate to a not-so-hypothetical parallel renunciation of accidental US citizenship.  I think this stark and compelling example needs to be driven home to our elected parliamentarians and cabinet ministers.  (I maybe should have used the female gender in my example, but that didn’t occur to me until after I sent the emails and then stumbled over one of WhiteKat’s blogs, sorry WhiteKat no offense intended …)
The current timing of an email such as this is, I believe, critical, given the possibilities of an IGA announcement when Parliament resumes in October (and, one hopes, not before then!).
One email probably won’t make a difference. But multiple emails may make a difference.  I encourage all Canadians visiting this website, whatever your national or ethnic origin (to borrow the words of our precious Section 15 of the Charter), to send similar emails NOW to your own Member of Parliament and to other members as you think appropriate.
No doubt my email could have been shorter and perhaps better-written.  Please do NOT cut and paste my wording; use your own, perhaps with my wording as a starting point for improvement.  Cut-and-paste jobs don’t have the impact of obviously-individual emails.
I appreciate so very much all that Lynne, Victoria, Don and others have done in attempting to get these stories before Canadian media.  But I am discouraged at how seldom we seem to get much media traction in Canada.  I think our best bet, for now, is to blitz Parliament with the message.
And please, those of you who are NDP members, even if you don’t live in Toronto Centre, hammer home your concerns to Mulcair and the NDP critics, mentioning your NDP membership in your emails.  I didn’t do that in the copy I’m posting here, nor in the copies I sent to Harper, Flaherty, Trudeau and May, since I don’t want to dilute the message by flagging that I’m not one of their “base” members.  I’m rubbing the NDP’s nose in it, though.
Toronto Centre residents, whether NDP or not, should pay close attention to what happens to the NDP nomination meeting on September 15.  Vote accordingly in the by-election.  See my post on this elsewhere on Sandbox, linked in my email.
Remember, all that is necessary for evil to triumph, is for good people to say and do nothing when it rears its ugly head.
And (re the thread title): one black fly can’t kill a moose, but a swarm of black flies can bleed a moose to death, if the moose can’t free itself from the swarm.  Let’s bleed the moose!  NOW!

Saddened Is A Canadian Citizen!

Citizenship, ,

flagFinally! After 36 years in Canada and a very long wait for her citizenship application, Saddened became a Canadian citizen today.
Here is what Saddened sent to me in an e-mail a few minutes ago.  (I’m posting this with her consent)

I AM A CANADIAN!!!!!

 

YEAH!!!!!!!!!!

Congratulations Saddened. Now you need to change your name to Happy.   freedom next exit
Next step on the Road to Freedom is a CLN.

 

Where do we go from here? Is it time for an organization?

FATCA, ,

Since their origins, both the Isaac Brock Society and Maple Sandbox have been invaluable sources of information and a productive forum for intelligent discussion. These discussions have matured to a point where we have a much greater understanding of the overreach of the United States government into the lives of those who choose to permanently live outside of the United States or are ‘Accidental Americans’. This summer, we have seen contributors to Brock and Sandbox quoted in various publications and even have articles published in The Hill.
However, in Canada, the issues discussed here, primarily Citizen Based Taxation and FATCA, are virtually invisible to our elected representatives, the media and the general public (with the exception of the Green Party of Canada).
Living in an advanced Western democracy, with a modern and model Constitution, Canadian citizens and permanent residents can and should expect our government to protect us in many ways. We expect police and fire services, safety regulations, affordable and accessible health care,protection of our land, our borders, our resources, and our economy. And when some of those protections fail or are inadequate, we expect public debate and action by our government.
Can anyone honestly say that the Canadian government has protected U.S. persons in Canada from CBT?
We do know that Canada has limited influence over U.S. tax policies. However, except for RRSPs, why haven’t TFSAs, RESPs and RDSPs been included in any of our treaties or other agreements with the U.S.? Instead, they are treated as taxable foreign trusts, with compliance difficulties and penalties.
Why are our mutual funds and ETSs classified as Passive Foreign Investment Corporations, thereby making them subject to discriminatory taxation, complicated forms and penalties for honest mistakes?
As far as FATCA is concerned, the jury is still out. We simply don’t know the shape of a Canada-U.S. FATCA IGA and how it will compromise our Charter rights and freedoms and our privacy rights.
In spite of all the wonderful discussions we have been having, I feel we are hampered by the lack of a legally registered organization with a spokesperson the media can turn to. Instead, on those rare occasions when FATCA or other issues affecting U.S.  persons in Canada is mentioned, reporters usually turn to professionals with a vested interest in promoting compliance and fear.
This proposed organization would be one of Canadians defending Canadian interests, values and laws from the intrusion of U.S. extra-territorial taxation.
The organization could begin with just a few core members to get things started and look after the not very difficult or costly task of provincial registration. Then it would recruit members. Both the Maple Sandbox and Isaac Brock Society can be used to promote membership. There would be a small membership fee to defray expenses.
It is my opinion that the organization would be more effective if the core group was located in Ottawa or Toronto. There appears to be a more concentrated population of duals and former Americans in those cities. The location would also be closer to political and media centres, and thus possibly have more legitimacy in the eyes of the media and the powers that be.
The organization itself might not launch any lawsuits over FATCA, but would assist anyone or any other group, such as the Canadian Civil Liberties Association, with both financial and research assistance.
So, the question is, where do we go from here? Is just discussing the problems of CBT and FATCA enough or do we need boots on the ground, so to speak?  Please share your ideas.

"Nothing Against Canada." Nothing Against United States (Until Now)

Citizenship, FATCA, IRS, , , , , ,

Ted Cruz has “nothing against Canada.”  Likewise, many Canadians born in US have”Nothing against United States (until now).the hill
Here is an article by Lynne Swanson (aka Blaze) which appeared on the Congress blog at The Hill today.
This tells Senator Ted Cruz he has nothing to fear from Canada for renouncing Canadian citizenship–unlike what happens in reverse

Senator Cruz, Canada respects your decision to renounce your Canadian citizenship. When it is granted, I assure you Canada will not stalk you for information about your private finances and will not demand taxes or penalties from you.
Senator Cruz, will you and your Congressional colleagues do the same to protect Canadians and others around the world from outrageous demands of IRS and US Treasury?

 

Ted Cruz Renouncing Canadian Citizenship For US Presidential Aspiration

Citizenship, FATCA, , , ,

Ted Cruz Is Renouncing Canadian Citizenship.
Cruz is a US Senator from Texas who was born in Calgary in 1970 to an cruzAmerican mother and a Cuban father. His father was working as an engineer.
Cruz only recently learned he is still considered a US citizen. He moved to US as a child and thought he was not a Canadian citizen because he had never claimed Canadian citizenship and has had only a US passport since high school.

“Because I was a U.S. citizen at birth, because I left Calgary when I was 4 and have lived my entire life since then in the U.S., and because I have never taken affirmative steps to claim Canadian citizenship, I assumed that was the end of the matter.”

Sound familiar? Well, at least he knows Canada won’t try to FATCA or FBAR him.
Cruz insists he is entitled to serve as President because he was American at birth” through is mother’s citizenship.
Hmm. He’s a Tea Party Republican. I wonder what all those birthers who insist Obama should not be President because he wasn’t born in US (despite a birth certificate from Hawaii) will say about this.
Allison Christians sums it up nicely in Only Reason Why Ted Cruz’s Citizenship Is Interesting.

In the grand scheme of things Ted Cruz’s citizenship is a non-story. But for what it illustrates about citizenship-based taxation, it could be the story of the century.

Now, how do we make this work for us?
 

Harper Is Proroguing Parliament–What Will This Mean For FATCA?

FATCA, ,

Prime Minister Stephen Harper is proroguing Parliament through a request to the Governor General.  Parliament Suspend 20091230
In an e-mail, Tim said (posted with his permission)

And I feel strongly there is a constitutional argument that no IGA or any other international agreements shall be signed prior to the next Throne speech in October. Some including many in the government might feel differently but there is a strong case that Harper right now is only a “caretaker” government.

In a follow up e-mail, Tim said:
One very real consequence is even after they sign an IGA(or any treaty) it must be put before Parliament for 21 sitting days prior to any further action that can be taken to ratify. If they were to sign an IGA lets say tomorrow the 21 sitting days of Parliament would only start whenever Parliament comes back(October??).  If October 21st were to be the return of Parliament and a throne speech the government can’t introduce legislation to ratify and implement an IGA until November 26th which brings us pretty close to the Winter recess.
I hate the way Harper and McGuinty have misused prorogation (I didn’t even know the word until a few years ago!) to avoid political controversies. If it helps to Stop FATCA, I love it!

 
 
 

Carl Levin: FATCA For Law Enforcement, National Security

FATCA, IRS, , ,

I had posted this earlier in another thread, but I think this letter from Carl Levin to IRS is so significant, it needs a thread of its own. levin
In Obama’s 2009 press conference on FATCA, he credited Carl Levin for being one of the masterminds on FATCA for combating  offshore tax evasion.
In 2012, Carl Levin wrote a letter to IRS, demanding (page 11)

Although FATCA is structured to address offshore tax abuse, offshore account information has significance far beyond the tax context, affecting cases involving money laundering, drug trafficking, terrorist financing, acts of corruption, financial fraud, and many other legal violations and crimes. Given the importance of offshore account disclosures, FATCA guidance and implementing rule should create account FATCA forms that are not designated as tax return information but, like FBARs, may be provided to law enforcement, regulatory, and national security communities upon request. FFIs are not, after all, U.S. taxpayers, and will not be supplying tax information on behalf of their U.S. clients; they will instead be providing information about accounts opened by U.S. persons. The U.S. Supreme Court has long held that bank account information is not inherently confidential but is subject to inspection by law enforcement and others in appropriate circumstances. Foreign account information is too important to a wide range of civil and criminal law enforcement and national security efforts to be designated as tax return information bound by Section 6103’s severe restrictions on access.

Why bother with a warrant or surveillance when you can simply declare someone a “US person” and FATCA them?!?
 
 
 
 
 
 
 

"I Hope Someone, Somewhere, Sometime Will Say This Is Wrong"

FATCA, , ,

Exposed: IRS Colludes With Banks To Unfairly Target U.S. Citizens Abroad is an excellent article about the real impact of FATCA. It comes from Occupy.Com.
It is one of the comprehensive and accurate articles on FATCA I have read.I wish the mainstream media would do as thorough and as accurate a job in covering the issues.
A woman in France speaks for many of us when she says:Wrong

“I hope someone, somewhere, sometime will say this is wrong.”

“In a panic,” she renounced her U.S. citizenship because of the upset it was causing her ill non-US husband.  She is now “more and more depressed.”
Victoria Ferauge (aka Victoria) says:

“There are too many unintended consequences. It’s negatively impacting people who are not tax evaders. What I find astonishing is how it never occurred to the IRS how this could have an impact on regular people.”
Marvin Van Horn (aka Just Me) shares his horror story of IRS trying to seize $172,000.

“I said, ‘You want to apply the penalty based on my house?’ So then my penalty went from $90,000 to $172,000. I said, ‘This is ridiculous. For a tax failure that’s less than $20,000 over six years and a failure to file a form, you want to charge me a penalty of $172,000?'”

With help from TAS, he managed to whittle that down to $27,000, which he now says he probably should not have paid.
A Georgetown University law professor gets it:

 
“In my view, a working system to address offshore accounts addresses offshore accounts,” said Itai Grinberg, professor of law at Georgetown University. “For a U.S. expat living in Berlin, having an account in a Berlin bank is not an offshore account. It’s an on shore account.”

Unfortunately:

“That’s my view, that’s not what FATCA says,” he added.

Victoria describes the situation well:

“We feel a little like David against Goliath here.”
I’m certainly no Bible expert, but I seem to recall from Sunday School that David whacked the giant bully Goliath in the head with a stone and killed him.
If we are Davids working together, we can do the same to FATCA (I hope!)

 

What Would Einstein Think Of FATCA?

FATCA, , ,

EinsteinAlbert Einstein said “The hardest thing in the world to understand is the income tax.”
He also said “This (preparing my tax return) is too difficult for a mathematician. It takes a philosopher.”
 
It takes much more than a mathematician or philosopher to deal with FATCA!Einstein simple
Einstein also said “If you can’t explain it simply, you don’t understand it well enough.”
What do you think Einstein would say about FATCA?