House of Commons #FATCA Panel To Watch!

Woo Hoo. This will be the FATCA panel to watch Wednesday May 12 from 3:30 to 5:00 p.m.

John Richardson, a Vice-President of CBA and the Privacy Commissioner will all be on the same House of Commons panel on FATCA.  Intriguing.

Thanks to Noble Dreamer for posting this at Brock.

Update: Thanks to the Isaac Brock Society, video of the session is available on YouTube.

13 thoughts on “House of Commons #FATCA Panel To Watch!

  1. RRSPs are not reportable by the banks to the CRA; i.e. contrary to perception of the great exceptions negotiated for US Persons in Canada in news stories and out of Conservative mouths, the banks are the only ones who have an exclusion. These accounts (and all the other registered accounts) are still reportable by the holder of the RRSP, along with protection on yearly taxation of gains by filing Form 8891 and not having to report RRSPs (with yearly Form 8891) as “foreign trusts” on 3520 and 3520A — until receiving proceeds from a RRIF or an annuity or some other method of removal of proceeds in (or before) retirment. RRSPs must also be reported on the FBAR (now FINCEN Form 114: http://www.fincen.gov/forms/files/FBAR%20Line%20Item%20Filing%20Instructions.pdf, which must be filed electronically) and Form 8938 (mostly, but not completely, duplicative of Form 114). Form 8938 is an attachment to the 1040/1040NR, as are Forms 8891 and 3520 and 3520A.

    Deferred accounts (as the RRSP and RRIF) protected by Form 8891 and in the US-Canada Tax Treaty are just what the US frowns upon. Deferral of gains in the TFSA, RESP and RDSP are not so protected.

  2. With regard to RRSPs. Everyone should understand by now that income and gains from RRSPs is deferred in both Canada and the US. In Canada it is automatic. If someone is filing US returns, RRSP deferral requires filing form 8891 .

    In that case RRSPs are not treated as foreign trusts. In addition, it is accepted practice that mutual funds held by RRSPs need not be treated as pfics

  3. Lynne, I have a few comments on your replies to ScaredCanadian:

    4. RRSPs may not be reportable under the IGA, but I doubt that that exempts them from being treated as foreign trusts under US tax law. I don’t think the IGA overrides US tax law.

    6. Regarding what banks will ask of their customers, Mr. Hannah from the Canadian Bankers’ Association said banks would not be asking for additional information from existing account holders who show no “US indicia”, but he distinctly indicated they would be asking about US personhood when new accounts are opened. I couldn’t tell whether that applied only to new accounts for new customers or would apply also to new accounts for existing customers. Also, Hannah didn’t indicate what kind of information they would ask for — US citizenship? Green card holder? Place of birth?

    Finally, of course for someone born in the US, their US place of birth will appear on their Canadian passport. So even if one’s bank doesn’t ask for place of birth, US border officials will see that when one enters the US.

  4. @Scared: I should have mentioned two things:

    1. Investment accounts are somehow treated differently than other bank accounts.  Some financial institutions have been asking questions about US citizenship for years on some investment accounts.  I have never completely understood that so perhaps others could comment on that.

    2.  I am not a lawyer or accountant and nothing i have said should be considered legal or accounting advice.

     

  5. @ScaredCanadian:

    It’s easy to understand why you are confused and overwhelmed with all of the information. I will do my best to answer your questions.

    1.  The IGA has been signed by Canada, but the Implementation Act must be signed into law in Canada for the IGA to be effective.

    That is why we are suggesting an amendment to the Act to exclude any reporting on any Canadian citizen or resident. We still don’t know if the Conservatives will agree to such an amendment.

    The NDP is pushing for a delay in the Act being passed so it can be properly debated.  We don’t know if the Cons will agree to that.

    2.  No and No.

    3.  Banks say they will not refuse service and the IGA prevents them from closing accounts.

    4.  I don’t believe gains in RRSPs will be considered income, but the US may consider withdrawals from those accounts as income. However, you should receive a credit for Canadian taxes paid on that income.

    5.   Yes, registered accounts must be reported on FBARs.

    6.   That is exactly what banks and more importantly governments around the world should have done three years ago.  That is the huge issue none of us can understand.  If they had joined together, they could have defeated this monster before it got off the ground.

    If I had been asked by one of the Cons “But what could we do,” I would have had several suggestions, including taking a leadership role to pull together G7, G8, G20, APEC, Organization of American States, Commonwealth nations, Francophone countries and 192 of 193 UN countries.  Canada in unique in its involvement in all those associations, yet it did nothing.

    I continue to say if I was in your situation, I would do nothing.  IRS does not know about you.  I do not believe they care about you. Even if they did learn about you, CRA will not collect for them.

    It is unlikely your bank has any information about your place of birth.  The CBA official indicated they have no plans to ask for anything beyond what they currently have.

    Others may give you different advice.  You need to make the decision that gives you the most peace of mind.

    Read this on Canadian Protections from the IRS.

    http://maplesandbox.ca/2014/canadian-protections-from-irs/

    I hope this helps to give you some peace of mind.

     

     

     

     

  6. Hi Lynne. You did an excellent job in front of the finance committee. Thank You!!!

    I have a couple of questions about the IGA. I am having a hard time understanding it. The questions are as follows:

    1) Is the IGA final or still a work in progress?

    2) Do banks have the authority to hold any of your funds if you are a US citizen? CRA will not collect any penalties but will banks be forced to freeze a portion of your money?

    3) Will banks refuse certain services to you?

    4) Will RRSP gains be considered income and be taxable in the US?

    5) Do these registered accounts need to be declared on FBARS?

    6) Why doesn’t the world banks turn tables on the US and threaten to pull out any US investments such as stocks, bonds, etc… Cash out and invest in Canada, Europe, China, Japan, etc…..

  7. Well, things were sure a lot testier at Finance Committee today–and dashed any dim  hope I had that some of the Cons were beginning to “get it.”

    Here’s the Parlvu video. Note: FATCA is only the first half.

    As expected, John Richardson was amazing.

    John’s two major points:

    “No reason to rush whatsoever, absolutely none…This should not be in dark recesses of an omnibus bill…It should be brought to see the light of day.”

    And

    Given that the US has the right to define citizenship…it`s “absolutely essential any FATCA agreement…can never, ever, ever include any Canadian citizen resident in Canada.“

    Gerald Keddy is still on his “American citizens” in Canada bandwagon. He claims the opposition is confused because he has “never heard the term American person before.” Umm Gerald, I guess you didn’t read the IGA or FATCA. “US person isthere over and over and over.

    There were a few understated but encouraging words from the Privacy Commissioner, but I would have preferred it to be much stronger.

    The CBA and Chamber of Commerce fellows well, they’re CBA and Chamber of Commerce people.  That tells you all you need to know about how much they care about how FATCA affects us as individuals.

  8. Gotta love John Richardson and Murray Rankin!

    Murray Rankin gets better and stronger every day.

    Boo Hiss Canadian Bankers Association.

    Scott Brison “You can ask for a better IGA”

     

  9. Woo-hoo indeed! Two committee meetings, today and tomorrow, packed with witnesses on both sides of the fence on this issue. The fireworks should be interesting to watch. Not sure who to thank for this interesting roster on both days, but it’s impressive. Democracy sort of in action, except we know the Tories have a majority and will control the final outcome, but one can only hope that maybe a few backbenchers on the Tory side might shake loose — though I don’t hold my breath. Still, this will educate the Tories on the committee (if not the general public, I doubt this will get lots of MSM coverage but we can hope) and maybe there might be a last-minute push in their own caucus to split this from C-31. If nothing else, this can be handing the NDP (and the Liberals if they ever get their act together) some big issues for the next election.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Optionally add an image (JPEG only)