2013 Taxpayer’s Advocate Report to U.S. Congress Cites Maple Sandbox and Murray Rankin NDP Letter on FATCA

Read the “Serious Problems” portion of the just released 2013 U.S. Taxpayer’s Advocate Report to Congress:

http://www.taxpayeradvocate.irs.gov/2013-Annual-Report/full-2013-annual-report-to-congress#MostSeriousProblems

Then go and read the “FATCA” section:

http://www.taxpayeradvocate.irs.gov/userfiles/file/2013FullReport/REPORTING-REQUIREMENTS-The-Foreign-Account-Tax-Compliance-Act-Has-the-Potential-to-Be-Burdensome%2C-Overly-Broad%2C-and-Detrimental-to-Taxpayer-Rights.pdf

But note especially footnote 38 on page 243, which references a Maple Sandbox quote of Canada’s NDP National Revenue critic Murray Rankin complaining about FATCA.

The report mentions that FATCA, “in addition to objections based on resource burdens …has given rise to discussions of sovereignty issues, as well as concerns regarding economic repercussions. For example, Murray Rankin, the Canadian equivalent of a “Shadow Minister” for National Revenue, recently reiterated his party’s concerns regarding FATCA”:

“New Democrats are concerned with the prospect of a foreign nation unilaterally imposing obligations on Canadian banks to disclose personal information. The Canadian government has a responsibility to protect Canada’s tax base, and while we understand the United States’ desire to protect their own tax base, this should not come at the cost of the rights of individuals residing in our country. Cracking down on tax cheats should occur through international cooperation rather than unilateral action” (38; referenced as http://maplesandbox.ca/wp-content/uploads/2013/09/Rankin-Letter-to-Flaherty.pdf)

The report does not contain all that we would like, but it shows first that Maple Sandbox is read widely and seriously considered (Congratulations to Blaze and Outraged!) and secondly that Sandboxers and Brockers persistently pestering a political party in Canada (the NDP) can cause a change that finds its way to a US report to Congress.

This Canadian text, now in a U.S. report to Congress, also needs to find its way back to Canada and to Minister Flaherty.

January 10 2014 afternoon update: Earlier today (see comment below) Schubert emailed Mr. Mulcair, the Leader of the NDP, and mentioned that Mr. Rankin’s letter had just “earned a supportive footnote in the latest report to the US Congress by the US Taxpayer Advocate Service.” This afternoon he received an e-mail of thanks from Mr. Mulcair for alerting him to this information. Nice to receive a same day personal reply from the leader of a party–and we all agree that the last few days have been pretty good.

11 thoughts on “2013 Taxpayer’s Advocate Report to U.S. Congress Cites Maple Sandbox and Murray Rankin NDP Letter on FATCA

  1. badger

    Schubert, see this latest (also posted on IBS and in ‘What’s New’ here at MS):

    FOR IMMEDIATE RELEASE
    January 22, 2013
    CANADIANS DESERVE ANSWERS ON FATCA

    OTTAWA – Conservative Finance Minister Jim Flaherty must address growing public anxiety about the U.S. Foreign Account Tax Compliance Act (FATCA), and secret negotiations over an Intergovernmental Agreement (IGA) for the implementation of FATCA in Canada.

    “A complete lack of transparency, communication and consultation on the part of the Conservatives has exacerbated fears among those who have serious concerns about FATCA,” said NDP pensions critic Murray Rankin (Victoria). “Negotiations are being held behind closed doors while Canadians remain in the dark as to the integrity of their personal banking information.”

    Reports suggest that if implemented, an IGA may require Canadian banks, investment funds and other financial institutions to disclose annually to the U.S. Internal Revenue Service (IRS) information on accounts held by American citizens, including dual citizens in Canada. Concerns have been raised that such a system could potentially violate existing Canadian privacy laws.

    “Canada cannot accept an agreement that violates Canadians’ rights,” said Rankin. “I am asking that the government acknowledge the very legitimate public concerns about the FATCA, bring transparency to this process and inform Parliamentarians on the state of negotiations as soon as possible.”

    Rankin sent a letter to Flaherty outlining several concerns about FATCA and demanding urgent action.

    For more information, please contact:
    Kiavash Najafi, Press Secretary, 613-852-6186 or kiavash.najafi@parl.gc.ca

    Reply
  2. IRSCompliantForever

    As mentioned as an update on the original post above, Schubert received a same-day response from Mr. Mulcair.

    Reply
  3. Schubert

    As I’ve noted elsewhere, in case you aren’t following the other blogs, I sent earlier today the following message to Harper, Flaherty, Mulcair, Rankin, Dewar, Elizabeth May (Green Party leader), Baird (our Foreign Affairs Minister) and Justin Trudeau (Liberal Party leader). No replies to this one yet … but given Mulcair or his staff were right on top of the other email, they’ll be all over this like flies on a bull.

    Yesterday the US Chamber of Commerce posted the following article, very critical of FATCA, on the internet.
    http://maplesandbox.ca/2014/us-chamber-of-commerce-joins-tas-in-dumping-on-fatca/

    In other news, yesterday the US Taxpayers Advocate Service (an arms-length part of the US IRS) raised severe criticisms about FATCA and even footnoted comments made in a letter by Murray Rankin, NDP national revenue critic (described in the footnote as a “shadow minister” in Canada) that raised concerns about FATCA which, to his credit, Minister Flaherty raised in a public letter to US media back in the Fall of 2011 and I suspect and hope has repeatedly raised in ongoing negotiations with the US.

    http://www.taxpayeradvocate.irs.gov/userfiles/file/2013FullReport/REPORTING-REQUIREMENTS-The-Foreign-Account-Tax-Compliance-Act-Has-the-Potential-to-Be-Burdensome%2C-Overly-Broad%2C-and-Detrimental-to-Taxpayer-Rights.pdf

    In light of growing concerns about and opposition to FATCA in the US Congress, bureaucracy, and business community, I think it would be foolish in the extreme for Canada to even contemplate or continue discussions with the US over any agreement to comply with FATCA, if that agreement would in any remote way jeopardize current Canadian law, the Charter of Rights and Freedoms, our financial institutions, and most importantly our citizens no matter what their ethnic or national origin. FATCA is recognized by solid and substantial “heavy hitters” in US society as a train wreck. Just because some other countries allowed themselves to be stampeded or snookered into signing an agreement with the Americans that provides no real benefits to the non-American parties and undermines their national sovereignty, is absolutely no reason for Canada to be equally foolish and craven.

    Just say no. Just sit tight and see how this unravels in Washington. Better yet, how about lobbying in the US to undermine this monstrosity? Why not? The Americans don’t think twice about lobbying in Canada against things they don’t like.

    (OK everyone, pass on something like this to your own MPs. People not in Canada — contact your own government reps. Just do it.)

    Reply
  4. Schubert

    I just got a personal email reply signed “Tom” from Tom Mulcair, NDP leader, Leader of the Opposition, and (for those of you not in Canada) our equivalent of what in the UK would be called the Shadow Prime Minister, thanking me for the link to the TAS report. Same-day reply. First time ever that’s happened on one of my many emails to him and other politicians on FATCA. I think this was news to them too. Still waiting to hear from Flaherty or the other parties.

    This, and the US Chamber of Commerce article, is huge and, I think, at least in Canada and probably also in the US, a game changer.

    Reply
  5. Joe Blow

    UK, Germany and France were probably quick to sign IGAs because they dream about creating their own versions of FATCA. The Swiss signed up because their nuts (or lack thereof) are caught in a vise.

    Reply
  6. Schubert

    BTW this news today, coupled with other news about a US Chamber of Commerce article on FATCA yesterday here
    https://www.uschamber.com/blog/next-obamacare-fatca-roll-out-flounders

    leads me to suspect there actually is some hope that FATCA is going to be stopped or gutted in Congress in the foreseeable future. Certainly, with heavy-hitters like Chamber of Commerce, and the TAS (actually a part of the IRS!) beating up on FATCA, I’m beginning to believe that Flaherty’s strategy is just to stall until this mess collapses of its own weight. Banks, FFIs and ordinary people might, just might, want to think about taking a similar approach. The FATCA emperor is buck naked, the crowds are starting to notice, and maybe people will just ignore the compliance mavens and Chicken Littles, hunker down, and wait for the whole Rube Goldberg mess to lose its wheels and go careening off a cliff somewhere.

    I wonder how stupid certain politicians and negotiators in the UK, Germany, France and smaller countries with IGAs are starting to feel about now …

    Reply
  7. Schubert

    Following my own advice, I sent the following brief email to Tom Mulcair, Murrary Rankin, and my own MP Paul Dewar (NDP foreign affairs critic)

    “I thought you should know, if you don’t already, that Murray Rankin’s comments in his letter to Minister Flaherty have earned a supportive footnote in the latest report to the US Congress by the US Taxpayer Advocate Service, ironically a supposedly arm’s-length branch of the IRS.

    http://maplesandbox.ca/2014/2013-taxpayers-advocate-report-to-u-s-congress-cites-maple-sandbox-and-murray-rankin-ndp-letter-on-fatca/

    Well done!”

    (signed with my real name and address)

    It’s a pity, I suppose, that the TAS reports haven’t (as far as I know) also referenced the letter that Flaherty wrote to US media in the Fall of 2011 pointing out how wrong FATCA is in the Canadian context. Maybe because TAS never saw it, because the US media (NY Times, Washington Post, and Wall Street Journal) didn’t publish it … I’d copy my email to Flaherty, but for the reasons just mentioned it might be rubbing salt into a wound and probably not productive … but if someone else wants to contact him or Schoom, and can think of a constructive way to mention the NDP critic got a mention in TAS’ report and he didn’t, be my guest.

    Reply
  8. calgary411

    The inclusion of this into Nina Olson’s report to Congress is significant; she has highlighted that:

    The Canadian government has a responsibility to protect Canada’s tax base, and while we understand the United States’ desire to protect their own tax base, this should not come at the cost of the rights of individuals residing in our country.

    (And that statement, of course, relates to every other country!)

    I agree this should be sent to the NDP — as well as to other of our Canadian government representatives who are negotiating regarding and intergovernmental agreement with the US IRS.

    Reply
  9. Schubert

    This is good news. It may also be worth notifying Rankin and Mulcair that their concerns about FATCA have specifically been footnoted in this report to the US Congress.

    Reply

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