More Speaking Out Against FATCA

Ruth Freeborn of Kingston Ontario is again speaking out on FATCA. Ruth has been quoted in Wall Street Journal, Globe and Mail and on CBC.Today, she is in Kansas City Star, McClathchyDC and NewsMax.

In New Tax Law Driving Expats to Renounce U.S. Citizenship, Ruth’s quotes about her reasons for renouncing to protect her Canadian husband and child are right next to a photo of Tina Turner. Who did that layout?!?

“My decision was either to protect my Canadian spouse and child from this overreach or I could relinquish my U.S. citizenship,” she said. “It was with great sorrow I felt I had to relinquish, but there was no other choice for me and many like me.”

Ruth also says

“My husband cannot understand why Americans are so offended by having their personal emails and phone calls monitored by the NSA yet are very comfortable requiring a Canadian to hand over their bank account data, which is far more sensitive.”

The article also writes about the rich who are renouncing like Tina Turner, Eduardo Saverin and Denise Rich. As Ruth says:

“The rich can afford expensive tax attorneys,” Freeborn said. “The poor and the middle class cannot. My bank down the street is not an offshore account and I’m not hiding money.”

Marylouise Serrato, executive director of American Citizens Abroad points out some of the problems with FATCA. Cynthia Bennett of Germany says FATCA was the “last straw” to cause her to renounce.

Of course, we have the usual quote from U.S. Treasury about all the “illicit activities” we are hiding in our routine bank accounts down the street.

Ruth is a Sandboxer and Brocker. I will let her decide if she wants to reveal her identity here.  I don’t know if Cynthia is or not. I’m quite certain Tina Turner, Eduardo Saverin and Denise Rich aren’t, but we would love to have them join us in our fight!

NewsMax picked up the same story, but with a very different slant in Rand Paul Goes After Tax Law Aimed At Expats.

That article begins by saying:

A controversial new tax law that Kentucky Sen. Rand Paul is attempting to repeal is driving hundreds of well-heeled Americans living abroad to renounce their U.S. citizenship.

They again use Tina Turner, Eduardo Saverin and Denise Rich as examples. But, they also use the quotes from Ruth, Marylouise and Cynthia. They conveniently left out the information about Ruth’s husband being the sole income earner with an income of $51,000. Somehow, I don’t think that meets the threshold of “well heeled.”

Ruth is a Sandboxer and Brocker. I will let her decide if she wants to reveal her identity here.  I don’t know if Cynthia is or isn’t. I’m quite certain Tina Turner, Eduardo Saverin and Denise Rich don’t hang out here, but we would love to have them join us in our fight!

 

 

 

 

 

 

14 thoughts on “More Speaking Out Against FATCA

  1. OutragedCanadian

    @maz57 – wise words!
    @Anon, it would be great if you feel comfortable enough to name the institution – so that we can all boycott it. They definitely have NO RIGHT to ask those questions and the advisor was talking about something he or she knew nothing about. Shameful on many counts.

    Reply
  2. maz57

    @ Anon (name changed by request) Why would anyone even consider investing their money with an institution and account adviser that is that stupid? They basically threatened that they would report your husband and his account to the US government unless he answered a bunch of questions they had no legal right to even ask. They could have accepted his statement that he was Canadian only, taken his SIN and opened the account with no further questioning. That outfit clearly had no comprehension of FATCA, Charter Rights, or privacy laws. It’s not their responsibility to play detective for the IRS. Chances are, if they are that incompetent, they wouldn’t be good money managers anyway.

    If the whole purpose of opening the account in his name only was to avoid FBAR and US reporting, then that objective went away during the interview. If that particular outfit is that scared of the IRS, then the mere fact that you objected is a red flag that will never go away. I hope you stood up, walked out of the office, and let ’em know they just lost a customer because of their rush to roll over for the IRS.

    These institutions need to know that it is going to cost them customers and money if they are going to be willing participants in the abomination that is FATCA. There are plenty of other institutions out there that will take your money without resorting to a humiliating interrogation. They can ask if you are a US person and if the answer is no, they can accept it as fact and open the account. While it’s true that financial institutions are placed in a difficult position because of FATCA, there is no requirement that they do anything more than minimal due diligence and leave it at that.

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  3. Blaze Post author

    @Anon: It sounds like the Advisor doesn’t know what she is talking about. Withholding can only be on US Source income. The FATCA regs are clear about that. The CBA has that on their website.

    As Hazy says, they cannot legally ask for place of birth, especially if there is no US source income.

    Can you e-mail me a copy of the form?

    Reply
  4. Anon

    @Hazy Thank you for this info.

    The financial adviser did not say anything about US source income on this account. This was a newly opened account with no money put into it just yet so there are no allocations or investments My husband opened it specifically so he would not have joint accounts with me that then have to be reported on FBARs. The financial adviser said the questions were related to FATCA and that if he did not answer, they would withhold $. We then had a discussion about the lack of IGA re: FATCA. She seemed not to know anything beyond she was required to get country of birth and an answer to whether the account applicant was a USP

    In other joint investments, I said I wasn’t happy having any US investments and the adviser said nothing about US source income being an issue. I

    Reply
  5. Hazy

    Many Canadian FI’s would be registered with the IRS as a Qualified Intermediary for tax withholding on U.S. source income purposes.. Specific information on account holders is not transmitted to the IRS, as would be the case with FATCA. QI has been around since 2001.

    I can’t find any requirement for a Canadian FI to ask about country of birth under the QI rules.

    I suspect that some smaller FI’s are getting ahead of themselves on FATCA, for whatever reason. Possibly, it could be a misunderstanding of where we are at with FATCA in Canada right now (which is legally nowhere until an IGA is signed and approved by whatever means).

    So, place of birth is an inappropriate and likely illegal question.

    Reply
  6. Blaze

    @Anon It sounds like this was an investment account and not a standard bank account.

    For some reason, investment accounts have been subject to this prior to FATCA being announced. I don’t know what the legalities of this are because we only spoke to the lawyer about bank accounts.

    This seems to relate to US source income. I don’t and won’t have any US source income, so I personally would not be able to be a plaintiff in a lawsuit involving US source income.

    This issue has come up before related to investment accounts, but I don’t know if anyone has taken it further.

    I will e-mail you later today.

    Reply
  7. AtticusinCanada

    Thanks for highlighting the McClatchy article.

    Yes, it’s me and I don’t mind outing myself in Canada but, I’m careful to equate my online name with my real name mostly to Canadian blogs and posts. I’d rather the U.S. didn’t have ALL that info quite yet. However, that’s a fine line.

    I was hesitant to do the McClatchy article because it is U.S. based and has a very, very high profile inside the D.C. beltway with senators and congress persons. It also has a huge profile online and newspapers across the U.S. often pick up and syndicate articles from McClatchy. So it was a little scary to do it. However, the reporter was very interested in covering this correctly. Usually, I much prefer Canadian publications and media. Home landers have a way of utterly mis understanding this issue most of the time. Nothing you say is going to change that and perhaps there can be negative backlash. I’m not wanting to contribute to that. The reporter was wonderful really and did a fantastic job. I do wish they had used one of our “Myth” photos rather than a photo of Tina Turner though as she is exactly the image we are not.

    I had written a letter to him after hearing that he was seeking input. He then contacted me. He has an expat friend living in France and had first been made aware of FATCA last year by “getting an earful” from this friend while visiting.

    At any rate I am happy to see all these articles and see this picking up some steam. I have written to the reporter in Memphis. I used to live there and made it clear that these renunciations were NOT about taxes.

    @Anon, if banks are already asking people where they were born then I would wonder too if they are not on very shaky ground doing so.

    Reply
  8. Anon

    [note from administrators – name changed to Anon by request of the commenter]
    @Blaze – not sure of the best way to contact you so am posting this here.Please e-mail me.

    I was at the financial planner’s today and my Canadian only husband opened a new account. The questions about place of birth and are you a US person were highlighted in yellow. I asked my husband not to provide the info and discussed with the planner the lack of IGA re: FATCA and potential Charter challenge. She said she would ask the compliance department whether the info had to be provided now or not. She mentioned W8 and withholding if the questions were not answered. I said that this could not possibly be required since the IGA was not signed and said I thought the FI would be on very shaky ground in insisting on this at this point. Thoughts?

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  9. Blaze Post author

    Thanks Badger. The comments from CBA clearly were picked up from CBC interview then the author put his own spin of throwing in the towel on the story (although that does seem like what CBA is doing).

    In terms of the constitution, the author quotes no source for that. I suspect that is pure speculation on his part. Anyone who remembers Meech Lake knows how difficult changing the constitution is. If that was a nightmare, think what would happen to any politician who announced he or she was going to change Canadian constitution for the Americans.

    The author is British living in Dubai, so he likely has no idea what would be involved to change the Canadian constitution.

    http://www.iexpats.com/author/jim-atkins/

    Nonetheless, I forwarded the article to Flaherty, Schoom and others asking Flaherty once again to answer our Simple Question.

    Reply
  10. badger

    @all, noticed this http://www.iexpats.com/canadian-banks-throw-towel-fatca-fight/
    …”Despite intense pressure from lobbyists, Canadian banks have agreed they must obey the controversial US FATCA laws aimed at smoking out American expats with offshore bank accounts and financial holdings.”..
    ..”The Canadian Bankers Association, the trade body for the country’s banks and credit unions, fears the repercussions of not complying with the FATCA despite the protests from US expats living in the country. …

    …”Wrobel also warned anyone in Canada who even refused to confirm that they were connected with US could face their non-compliance reported to the IRS…..”

    AND the kicker:

    ..” Joining FATCA is likely to see amendments to the Canadian constitution to overcome difficulties in reporting personal information to a foreign government”

    Sorry for breaking into this thread, but thought the references to lobbyists and resistance from those in Canada, and the specific reference to changes to the Constitution warranted it.

    Reply
  11. Blaze Post author

    @WhiteKat: Ruth stings!

    The same article was in McClatchyDC and Sacramento Bee.

    http://www.mcclatchydc.com/2013/11/27/209810/new-tax-law-driving-expats-to.html

    http://www.sacbee.com/2013/11/27/5949038/new-tax-law-driving-expats-to.html

    Plus, there were articles out today that 68% of Americans would renounce US citizenship because of FATCA.

    Unfortunately, Memphis Business Journal’s headline says this is to avoid taxes. AGGGH! It’s not about taxes. It’s about financial privacy–and the ability to have a bank account!

    http://www.bizjournals.com/memphis/news/2013/11/27/survey-wealthy-american-expats-are.html

    Gulf News reports on the same survey, but says many banks in United Arab Emirates have already started to comply.

    http://gulfnews.com/business/banking/foreign-account-tax-compliance-act-protest-two-thirds-of-us-expats-want-to-give-up-citizenship-1.1260676

    Reply

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