Canada Caves to FATCA

“So sorry Canada” someone in the UK just said in the subject line sending the article Canada Signs Agreement To Dull Impact Of US Crackdown on Tax Cheats.

Here’s the IGA

Here’s the proposed legislation to enable FATCA in Canada

Here’s FATCA Information from CRA

Finance Canada News Release

Canadian Bankers Association News Release

CBC: FATCA Tax Deal With U.S. Takes Some Heat Off Canadian Banks

Globe and Mail Ottawa To Give IRS Information on Americans in Canada (Read My Lips: We Are Canadians!)

Global News: Canada-US Sign FATCA Tax Deal

47 thoughts on “Canada Caves to FATCA

  1. Petit Suisse

    Sorry if this isn’t the right place to ask this. I asked it on Issaac Brock also.

    FATCA and credit cards…just wondering, is there anything about credit cards in FATCA. I wonder about keeping a positive balance in a credit card account. I do this as a practical matter as I only have one bank account transaction monthly sent to the credit card, which saves on fees. In effect, I keep cash in my credit card account before I spend it. Would that be considered a deposit account?

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  2. ArcticGrayling

    Chartered Banks as far as I know all come under Federal Jurisdiction. I believe that Credit Unions, which are not Chartered Banks, come under Provincial Jurisdiction.

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  3. ArcticGrayling

    It strikes me that Canadian banks can still comply with FATCA by answering with N/A. That is the truth. Under Canadian law it is non-applicable.

    The banks in Canada are not reporting to the IRS. They are reporting to CRA, which in turn reports to the IRS under the existing treaty. CRA can only report information that they have. If they have nothing to report, they don’t report, and under the constitution, banks don’t have to report.

    Answering N/A is a perfectly truthful answer for every resident of Canada, whether such person is a US person or not. Under our constitution, the question does not apply.

    The constitution supersedes all.

    Question is….are banks…..and more importantly their clients, smart enough to understand the significance of the constitution?

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  4. ArcticGrayling

    It strikes me that under the terms of the FATCA deal, whereby Canadian banks and brokers pass on information to CRA, they would be fully compliant with Canadian law by ignoring the question with an N/A. It is non applicable under the supreme law of the land.

    That is the crux of it.

    CRA will only pass on what is reported to them. What is reported to them must be down within the framework of Canadian law. The constitution supersedes any other law out there.

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  5. janeb

    I’m not rich and never will be. That’s fine; I earn my living and pay my full share of Canadian taxes. I’d prefer not to have to participate in a legal battle to establish that a foreign government doesn’t have any claim on me or my entirely Canadian-earned income, and at least in the short term, with no U.S. ties and a Canadian birth certificate, I probably don’t have a lot to worry about. But if there is any reasonable legal prospect of overturning this assault on our sovereignty, I will happily contribute.

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  6. OutragedCanadian

    It does appear that the class action suit is the last bastion left to us, now that our govt has sold us down the river. I suspect there are many like me, who do not have the money to engage the expensive lawyers and accountants to help us get out of this, or to get compliant (if that happens to be someone’s wish). It means I also don’t have a lot to contribute to a class action suit, however, I will absolutely, 100% contribute what I can. I can’t remember ever feeling so outraged, so betrayed and so frightened (and for so long). It’s worth doing without something in order to be able to contribute to a class action suit. So count me in. I’m waiting anxiously to hear what the the advice on the next step actually is.

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  7. Blaze

    Janenb: It’s good to have you back, but it’s despicable that any of us still have to deal with this.

    I hope to be posting something soon about possible next legal steps. It’s not simple and it’s not cheap.

    Are there any very angry, very wealthy “US persons” out there who want to be our benefactors? If not, we will all need to contribute what we can.

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  8. janeb

    I’m not the person who mentioned this before, but I did much the same thing some months ago when I had to open new accounts to transfer a small inheritance (of Canadian money, invested with a big five Canadian bank) to my name. I can’t remember the exact wording of the question about U.S. personhood – sorry! – but I simply crossed it out and wrote N/A. I have had no problems or questions about that, even though I’m reasonably sure that at least one of the estate administrators knows my background: born in Canada with one Canadian, one American parent.

    A little more background, for what it’s worth: my family moved to the U.S. in early 1978, when I was twelve, and I moved back in the mid-80s, as soon as I could move out of my parents’ house. My mistake was assuming that the citizenship law in place when we moved, which both my parents carefully checked out, was still in force when I left – that is, that if I moved back to Canada as an adult, I would lose any claims to U.S. citizenship after three years. I had no interest in being anything but Canadian, so I abandoned any documents pertaining to U.S. nationality when I left, nearly thirty years ago, and they’ve long since disappeared. I’ve believed myself a single-citizenship Canadian my entire adult life and still do.

    I posted a couple things here when I first realized that the U.S. might think otherwise, but I decided simply to watch and wait. I will not let a foreign government claim the right to jurisdiction over me in the country of my birth and, in any real sense, sole citizenship. (I would have considerable difficulties establishing a claim to U.S. citizenship now if I wanted it.) I am not, however, prepared to stand by and let my own government erode the rights that I have as a citizen. I’ve been writing letters (though with no impact, as far as I can tell), and if there’s a class action suit or charter challenge, I’m in.

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  9. Blaze Post author

    I think the person actually wrote N/A which could mean anything. He has a CLN.

    To me, N/A would mean Not Answering.

    If that person is still around, maybe he could give us the details again.

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  10. Schubert

    @arcticgreyling

    Sounds to me like you have a very good broker. Let’s hope there are more of them out there!

    Your recommended approach to the banks sounds good to me, especially if we can get a significant number of definitely non-US-person Canadians to join in.

    I’ll also pass on some advice that was given to an occasional visitor to this website, who was presented by his broker with a written question on a form, saying (if I recall correctly), “is there any reasons the US would consider you to be a US person?” followed by a blank space for an answer. Leaving aside for the moment the absurdity of asking that question and the range of possible irreverent answers it could generate, my recollection is that when the person asked what he should insert (the individual in question has a relinquishment CLN and I think I read that the broker knew this), the reply was “write in ‘not applicable.'”

    There is also a brokerage account on-line application form I saw a while ago, I don’t recall for certain the name of the firm so I won’t mention it, which asked “are you considered to be a US person?” Again, leaving aside the obvious replies to the passive-voice wording, or the multitude of silent interpretations one could hold in one’s mind while answering it, I noted that there was no space to tick, but a drop-down menu. The very first choice was “not applicable,” followed by the range of US indicia first of which was US birth, but no mention in any choice of having a CLN. Let’s hope that everyone who stumbles over that beauty picks the first choice that pops up on the list, not applicable.

    Note also the variety of question wordings; I’ve spotted others. Aside from the Charter issues implicit here, as a onetime specialist in survey research and large databases, I chuckle at the thought of the IRS receiving data from hundreds of institutions world-wide, containing answers coded a multitude of ways in response to a very wide range of questions dancing around the issue, and then thinking for a second that any analysis of that database is going to tell them a bloody thing worth knowing.

    This whole situation would be hilarious if it weren’t so infuriating.

    And the Americans thought the Obamacare roll-out was bad …

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  11. ArcticGrayling

    Interesting……

    I spoke to my broker. I pointed out to him that asking for the information required by FATCA would violate the Supreme Law of the Land. He asked me to call him back in an hour, which I did.

    He told me that given a choice between asking whether somebody is a US person, or whether he would follow the Supreme Law of the Land, he agreed that the Constitution supersedes anything that OBungler wants from us. He said he will simply tick off all his clients as Canadian residents who are not US persons..

    Of course, now that I have renounced, he is, in my case at least, not lying.

    I looked my banker straight in the eye, and told him, before he asked me, that I am not a US person. I am not lying. I also told him that if he asked the question, he would be breaking the law. I think every banker should be told that by everybody, whether said person is a US person or not.

    I think that banks should be named as co-defendants in any class action suit.

    Thoughts from anybody?

    Reply

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