FATCA Information from Canada Revenue Agency

Here is Information on FATCA From CRA.

Updated link to FAQS on IGA: http://www.cra-arc.gc.ca/tx/nnrsdnts/nhncdrprtng/fq-eng.html

This information in particular jumped out at me under II

Will my financial institution be asking me if I was born in the U.S.?

A financial institution complying with the agreement will not be required to ask its account holders about their place of birth.If a financial institution, applying the due diligence rules of the agreement to its accounts, discovers any records connected to the account that have an unambiguous indication of a U.S. place of birth, the financial institution may treat the account as a reportable account or follow up with the account holder to obtain documentation that shows the account holder is not a U.S. resident or U.S. citizen.

Does the agreement require Canadian financial institutions to report to the CRA on any individuals who were told that they relinquished their U.S. citizenship when they became Canadian citizens?

The agreement does not require Canadian financial institutions to report on any individuals who have relinquished their U.S. citizenship and are not residents of the U.S.

Most of our banks won’t have an “unambiguous U.S. place of birth in their records because they were not able to ask that question when we opened accounts with them.

I don’t have the energy or concentration to review this or comment in detail tonight (just returned from the Information Session in London Ontario).  However, I wanted to get it posted so others could see it and share their thoughts.



37 thoughts on “FATCA Information from Canada Revenue Agency

  1. OutragedCanadian

    I opened all of my accounts so many years ago, I don’t really remember for sure, but I’m pretty sure that I didn’t have a usable passport back then, so would have to have used drivers license. I hope.

  2. Sasha

    I opened an online RBC Direct Investing Account back in 2008 and recall being asked if I was a U.S. citizen. I remember thinking that was an inappropriate question and decided to check the “no” box . . . am very glad now that I did so 🙂

  3. Blaze Post author

    @Norman That issue with investment accounts has been around for at least a few years. It is not related to the recent IGA.

    I’ve never understood why that is legal and no one has ben able to tell me. I have not raised it with any of the lawyers I’ve spoken with, but we should probably bring it to Joe Arvay’s attention.

    Is there anyone who can explain why investment accounts can so blatantly demand such information?

  4. Norman

    I tried again to open an online direct investment account, a TFSA and a self admin RRSP account in Royal Bank. Here is what happened. Enter the Hereunder link.

    it will take you to Account Opening, then to Protecting your privacy page which (which is a joke) then next page is account selected where you would say that you are not a US citizen nor US resident for tax purposes then few boxes open to ask the city and the country where you were born.

  5. Hazy

    I also can not find a reference to place of birth on the applications.

    However, for anyone who may have opened an account in the past using ID with US indicia, they might be advised to open an account at another financial institution fairly soon using only ID that does not indicate any connection to the US.

    If you used a Canadian passport with a US place of birth recorded, that information may or may not be in the FI’s internal records.

    2 1/2 years ago I asked a very knowledgeable person at TD what they did with the copies made of Ids presented at the time of account opening. I was told that the type of ID and serial or other number only was recorded. The copies were then shredded after a few days. It is unlikely that place of birth was recorded at that time.

  6. Blaze Post author

    I also just checked TD, RBC and ScotiaBank. I could not find anything asking for place of birth.

    They do, of course, ask for date of birth. That is very different than requesting place of birth.

  7. OutragedCanadian

    Hm, I just went and checked the online applications for TDCanadaTrust and BMO, for an everyday chequing account and neither ask place of birth on the form.
    @Norman, what kind of account were you looking at?

  8. calgary411

    Is that for an investment account vs a personal banking account, Norman? We should know if the “national origin” discrimination has started.

    GOC, Financial Consumer Agency of Canada, Your Rights and Responsibilities:

    http://www.fcac-acfc.gc.ca/eng/resources/publications/yourRights/Pages/OPENINGA-Ouvertur.aspx still says:

    What identification (I.D.) do you need?

    There are different combinations of ID you can use. You have three choices.

    Choice 1—Show two pieces of ID from List A:

    List A

    Canadian driver’s license
    Current Canadian passport
    Birth certificate issued in Canada
    Social Insurance Number (SIN) card
    Old Age Security card with your Social Insurance Number (SIN) on it
    Certificate of Indian Status
    provincial or territorial health insurance card that can be used as identification under provincial or territorial law
    Certificate of Canadian Citizenship or Certification of Naturalization
    Permanent Resident card or a Citizenship and Immigration Canada form IMM 1000, IMM 1442, or IMM 5292
    Document or card, with your picture and signature on it, issued by one of the following authorities:
    Insurance Corporation of British Columbia
    Alberta Registries
    Saskatchewan Government Insurance
    Department of Service Nova Scotia and Municipal Relations
    Department of Transportation and Infrastructure of the province of Prince Edward Island
    Service New Brunswick
    Service NL of the province of Newfoundland and Labrador
    Department of Transportation of North West Territories
    Department of Community Government and Transportation of Nunavut

    If you don’t have two pieces of ID from List A above, you can:

    Choice 2—Show one piece of ID from List A and one piece of ID from List B, below:

    List B

    Employee ID card with your picture on it and issued by an employer that is well known in the community
    Debit card or bank card with your name and signature on it
    Canadian credit card with your name and signature on it
    Client card from the Canadian National Institute for the Blind with your picture and signature on it
    Current foreign passport


    Choice 3—Show one piece of ID from List A and have someone the bank knows confirm that you are who you say you are.

  9. Norman

    Anyone trying to open a new account in any Canadian financial institution is now being asked their place of birth. I checked Royal Bank and TD website where you can open an account on line and in fact they ask the place of birth question.

  10. calgary411

    …and so did I send another email to CARP.

    They are hearing the “other side” of this discrimination by national origin story.

  11. Petit Suisse

    I sent a copy to m.nicin@carp.ca at CARP, as an attached file with this in the body of the email:

    “You might be interested in this text sent to three government ministers as well as the corresponding opposition critics.  It points out the obscure and obfuscating language used in the FATCA IGA and CRA’s not very useful FAQ on the subject.  In short, almost all ex-American senior citizens could find themselves reported to the IRS, or almost none, depending on the rules of implementation and other directives the CRA decides to send to Canadian financial institutions. It is also partly a response to Minister Flaherty’s recent letter to you.”

  12. Petit Suisse

    Here’s a letter I’m sending to the Ministers of Finance, National Revenu, and Seniors as well as the critics of the opposition parties. You will note that I concentrate on pre-1986 ex-Americans and refer to tbem as elderly. Hope that doesn’t offend anyone, but none of us in that group is still a spring chicken. Also, the fact that I am addressing prolems of implementation by CRA, does not mean that I approve of FATCA…far from it.
    As a retired Canadian citizen, I have some questions about the recent intergovernmental agreement (IGA) between Canada and the US concerning the Canada Revenue Agency’s implementation of the US Foreign Account Tax Compliance Act (FATCA) in Canada. There is a large group of senior Canadian citizens that one could refer to as ex-Americans. Considering the number of people involved, and the vulnerability of this segment of the population, I believe they deserve more than a standard form letter as an answer:

    1. Will the American Internal Revenue Service be able to harass Canada’s ex-American elderly Citizens?

    Under the proposed FATCA intergovernmental agreement, tens of thousands, possibly hundreds of thousands, of elderly Canadian citizens may be at risk of finding themselves reported to the American Internal Revenue Service and of receiving notices of assessment and fines. This is a distinct possibility unless Canadian financial institutions receive clear directives and clarifications from the Canada Revenue Agency on how to handle their situation. And if the CRA does not make a concerted effort to inform these citizens of their rights, they may fall prey to so-called tax experts whose advice and fees, combined with US penalties, could cost them many thousands of dollars.

    I am referring to those Canadians born in the US and who took Canadian citizenship as adults before 1986 and to those Canadians who were born to Canadian parents in the US, were registered as Canadians, reached adulthood in Canada before 1978 and did not go to the US Consulate to swear allegiance to the US.

    They were told in no uncertain terms by US Consulates that they would automatically lose their US citizenship, but were rarely given a Certificate of Loss of Nationality. Now they may need to have such a certificate to prove they are not US persons under FATCA. They could obtain one through a US consulate after a complicated bureaucratic process. Not only is this time-consuming and stressful, but often requires travel that would be a hardship for many. But worst of all, there is a very big catch even if they should obtain a CLN. The certificate will indicate that they lost their citizenship way back when before 1986, but the IRS, referring to a 2004 law, says they must file an income tax declaration for the five years previous to the day they request the certificate. And the consulate sends a copy of the certificate to the IRS. This led to an article in the International tax journalentitled “The malevolent time machine,” which you may access here:
    Expats live in fear of malevolent time machine.

    Some interpret the 2004 law as not applying to those who relinquished before 1986, but the IRS has not accepted this interpretation. Can you picture an 85-year-old resident of a retirement home contesting this law in a Washington, D.C. court?

    Canada Revenue Agency seems to mention this problem in its new FAQ on the FATCA intergovernmental agreement.

    This is the pertinent question on the site:

    “17. Does the Agreement require Canadian financial institutions to report to the CRA on any individuals who were told that they relinquished their U.S. citizenship when they became Canadian citizens?

    The Agreement does not require Canadian financial institutions to report on any individuals who have relinquished their U.S. citizenship and are not residents of the U.S.

    Individuals who have relinquished their U.S. citizenship may be asked by their financial institution for documentation to this effect.”

    The IGA itself also refers to a situation where an institution may accept “a reasonable explanation of the reason the Account Holder does not have such a certificate despite relinquishing U.S. citizenship.”

    The trouble is, the answer is not clear. Will the institutions be asking for a Certificate of Loss of Nationality from the US Department of State? Or will they be instructed by CRA to accept Canadian documentation, such as a citizenship certificate showing that the person became a Canadian before 1986 at a time when he or she automatically lost their US citizenship? Such Canadian documentation should be accepted as a reasonable explanation, and Canada’s financial institutions should be so informed by CRA.

    2. Will there be protection against witch hunts by overzealous banks?

    Another vulnerability for these citizens is the lack of clarity caused by the frequent use of “not required” both in the IGA and the FAQ, when referring to the institutions’ search for possible US persons among their account holders. This is the case for the CRA’s FAQ questions cited in the previous question.

    The same ambiguous language is used in the IGA when referring to account balance thresholds. For instance, under the section Accounts not required to be reviewed, identified, or reported, in the IGA, which refers to accounts under $50,000, this text appears:

    “Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting Canadian Financial Institution elects otherwise, either with respect to all Preexisting Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in Canada provide for such an election.”

    And again, in the CRA’s FAQ, the following question:

    “6. Will my financial institution be asking me if I was born in the U.S.?

    A financial institution complying with the Agreement will not be required to ask its account holders about their place of birth. “

    Since “not required” is not the same as “should not“, the language implies that financial institutions could report all accounts, regardless of the balance, and ask all account holders for their place of birth, if they so choose, unless the implementing rules and directives that the CRA sends to financial institutions protect elderly “suspected US persons” from institutions that might find it easier to behave in such a manner.

    Without meaning to be facetious, let’s suppose that Parliament were to adopt a law on euthanasia. If someone were to ask whether grandchildren will be allowed to have their grandparents put down in order to inherit sooner, we would not expect as an answer: “Grandchildren will not be required to have their grandparents euthanized.” Grandma would not be reassured.

    3. Will CRA be more proactive in informing Canadian citizens that CRA will not collect for IRS?

    Another essential step toward protecting these elderly citizens is to actively inform them of their rights. The FAQ on the Department of Finance website, as well as occasional articles in newspapers and a letter sent to various correspondents by Minister Flaherty confirm that CRA will not collect for IRS from Canadian citizens on liabilities incurred while they are residents of Canada. However, this information is conspicuously missing from the FAQ on the CRA’s website which is the first place most Canadians would look for information.

    The CRA is the only agency capable of communicating with practically every Canadian citizen. They should publish this information not only on their website, but on the forms for income tax filing, both printed and electronic, as well as on their electronic filing site.

    I am hoping that both you and the people working for you, will feel compassion for these Canadian citizens who have spent their lives working in and paying taxes to Canada, and who in no way deserve to be thrown into such a desperately depressing situation.


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