And They Want To FATCA Us?!?

The media around the world is reporting on wealthy and prominent people across the globe are evading taxes.

The Panama Papers are an unprecedented leak of information.

Canada’s Revenue Minister told CRA to get their hands on those papers.

Banks set to face greater scrutiny for their role.

The Minister of National Revenue’s order for an investigation makes me very nervous.

Monday, Lebouthillier’s office was quick to point out that the government is already taking action.

“International tax evasion and aggressive tax avoidance are complex and global issues which is why the government has allocated over $440 million to the CRA in Budget 2016 in order to combat tax evasion and aggressive tax avoidance, including offshore,” said Luciani-Girouard.

She said CRA has been collecting information on all international funds transfers over $10,000, including from Panama, since January 2015 “and it is selecting the highest risk taxpayers for review or audit.”

“Canada has significant tools to detect offshore tax avoidance and past success working ith leaked information to detect and correct non-compliance.”

Critics, however, have accused the CRA of going after small scale tax cheats while failing to curb more sophisticated and larger scale tax evasion. They point out that the CRA won’t even cooperate with the Parliamentary Budget Officer to measure the tax gap – the difference between what Canada is collecting in taxes and what it should be collecting.

I fear we will be “small scale” scapegoats even though we are not tax cheats. I fear the Lib Cons and the Con Cons will point to FATCA as an example of what they are proudly doing to combat tax evasion. I fear they will say they must FATCA us to get information from other countries about Canadians in Canada who truly are evading taxes.

I fear banks will point to us as examples of how they are helping to combat tax evasion–while they actively help real tax evaders escape the law.

I hope I’m wrong. But I fear I’m not. Get ready.

7 thoughts on “And They Want To FATCA Us?!?

  1. non-ups-aff

    USA had never respected any reciprocity unless it served it’s own interests. And USA had never really been “the good policeman” of the world. And USA has always been an ingrate country : it had never paid back the debts to the french who assisted USA to get the independence from Britain AND The american government forgot the assistance Canada gave USA during the crisis of american hostages in Iran at 1979.

  2. Lynne Swanson Post author

    From India linking the Panama Papers and FATCA with the need to be more transparent.

    “With the G20 (countries’ new global transparency standard) and FATCA (the US’ Foreign Account Tax Compliance Act) coming into place, the world is going to be a far more transparent place…The world is becoming one where adventurism, like in the past, is going to be increasingly a risky proposition.”

    Adventurism? Really? Strange. I never thought banking five minutes from my home was an adventure.

  3. Lynne Swanson Post author

    @Arthur Robert Wood at Forbes says the Panama Papers is the largest financial data leak in history.

    He calls it bigger in scope than the Snowden leaks.

    Wood at least has the decency to point out the irony of the U.S. becoming the world’s largest tax haven while they FATCA the rest of the planet.

    Financial Times reports America Fast Becoming the Tax Shelter of Choice.

    Do I think the US will change anything? Nope. Correction. They will probably intensify their attack on honest people living outside the United States while welcoming real tax dodgers to the U.S.

    Bloomberg was reporting back in January that the World’s Favorite New Tax Haven is the U.S.

    “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”

    Why should the U.S. change anything? They have quickly become exactly what they set out to be–a monopoly for tax evasion.

  4. Arthur

    Your fears are very well justified. FATCA will be held up by the U.S., in particular, as an ingenious law to combat exactly what the world is now witnessing with the release of the Panama Papers. Why would they do that? In order to cover up the fact that the U.S. itself is today the largest and most proactive secrecy jurisdiction. I personally believe that FATCA was created with the intention of cornering the shell company/secrecy jurisdiction market, which it has succeeded in doing. By first attacking countries like Switzerland, they saw that the non-U.S. clients at this Swiss banks, many hiding their funds, illicit and otherwise, and quickly moved them to the top secrecy jurisdictions of the United States: Delaware, Wyoming, South Dakota and Nevada, to name the worst offenders. So, by imposing FATCA upon the world the U.S. succeeded in eliminating a lot of competition in the world of tax havens and secrecy jurisdictions. That is also why they have been deaf to all demands to repeal FATCA and address its dramatic consequences on the U.S. expat and designated U.S. persons community. After all, they just succeeded, via FATCA, in cornering the market and having grown their own secrecy and tax haven ambitions. The U.S. is, and has always been, a hypocritical country, so none of this should be surprising in the least. FATCA, as we all know, has nothing to do with catching tax cheats and everything to do with eliminating competition, ultimately making the U.S. the world’s go to tax haven and secrecy country.

    The New York Times, in an article yesterday about the Panama Papers openly asks why there appear to be so few U.S. names in the released papers. It rightly explains that there are so few American names, including American politicians, simply because the U.S. is already one of the most important secrecy jurisdictions, tax havens and money launderers in the world today. U.S. politicians don’t need to go to Panama or Switzerland anymore. They eliminated the competition and now the have a tax haven right in their backyard, with the full knowledge and consent of the authorities. The same authorities who support and continue implementing FATCA, in order to catch all those tax cheats…the ones who decided to bank outside the U.S.!
    The New York Times

  5. Lynne Swanson Post author

    In Shedding Light on Secret Off Shore Accounts, Wall Street Journal credits FATCA as the reason there are not more US persons in the Panama Papers.

    In addition, in 2010 Congress passed a provision known as Fatca. It requires foreign financial firms to submit account information about U.S. taxpayers annually for use by the IRS. Fatca slices through layers of secrecy by requiring reporting on the actual owner of an account, if that person could owe U.S. taxes. There are stiff penalties for those who don’t comply.

    The author, Laura Sanders, is usually supportive of our plight. But she doesn’t mention inthis article how FATCA ensnares the wrong people.

    1. Tim

      My belief for quite a while now is Laura Sander is not that sympathetic to our plight. She is mainly concerned with keeping her job at the Wall Street Journal.

  6. Lynne Swanson Post author

    Yep. Here we go.

    The Daily Beast roars that Republicans Enable Big-Time Tax Evaders with promises to repeal FATCA.

    Don’t read it if you have high blood pressure. This is just a sampling.

    The bill was called the Foreign Account Tax Compliance Act, or FATCA; how they managed not to tag that final “T” on there at the end is beyond me, someone was really asleep at the wheel.

    It gets worse from there.


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