Watch out for smaller investment firms

While the emphasis here and at Brock has been primarily on the larger financial firms and their industry association, it will be interesting to watch how the smaller investment firms react to FATCA.

Here’s one item from Advisor.ca that may illustrate what we may see:

New rules for U.S. taxpayers with mutual funds

Advisors must be more diligent in determining whether clients truly are U.S. resident taxpayers, and remind them of their obligations. For our part, we won’t open accounts until prospects provide copies of their passports and sign IRS Form W-9 (Request for Taxpayer Identification Number and Certification

In particular, the smaller firms, which number in the hundreds, if not thousands, may not get the FATCA due diligence requirements correct and ask for information that is not required and may very well be illegal.

 

 

 

2 thoughts on “Watch out for smaller investment firms

  1. Blaze

    Thank you Terry Ritchie for posting here.

    Are you able to answer the fundamental question: How can banks or investment firms even ask Canadian citizens and residents where they were born, if they have other citizenship or if they are a “US person?”

    It is our understanding that violates Canadian human rights, privacy and banking laws. Changing those laws could violate the Charter of Rights and Freedoms.

    In addition, this article neglects to mention CRA does not and will not collect taxes or penalties for IRS for any Canadian citizen and will not collect penalties for for IRS for any Canadian resident who is not a Canadian citizen.

    Reply
  2. Terry Frank Ritchie

    Thanks for posting. I’ve been writing about this within industry websites and periodicals for the past 3 years in Canada. I’ve also spoken at various industry conferences as well. Unfortunately most advisors tend to ignore or pass the buck suggesting that they are not tax advisors. FATCA, good, bad or otherwise, changes everything.

    Reply

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