The FATCA Hunt Is On in Canada

Keith Redmond is reporting on Facebook that BMO has sent this FATCA letter to Canadian businesses. As Keith posted, this is truly alarming.

BMO Letter Page 1
BMO page 2

The letter requires forms to be completed or accounts will be reported to CRA to hand over to IRS.
BMO Form page1
BMO Form Page 2

Note: This includes accounts of “valued customer” closed after June 30, 2014. Keith is further reporting all Canadian banks will do the same.

Angel Beoughter confirmed TD sent the letter in January–and goes even further requiring reporting of persons who have the ability to direct funds:

Yes, Lynne Swanson…TD sent them out January 2016. I have personally handle the mail from the TD. It’s a little bit different in that it also asked for person or persons who also have the ability to direct funds. I was so happy that I am no longer an American citizen. I can go back to just being an ordinary boring book keeper instead of the big fish hiding money.

I don’t know if Canadian banks are sending letters to individuals where they do not already have a record of U.S. taint.

18 thoughts on “The FATCA Hunt Is On in Canada

  1. Jeff

    I am a Canadian citizen born and raised. I have never worked in the US or held US citizenship. Because my Canadian company bought US listed stocks (Google, etc.) I am being now being forced by my bank to complete the W-8BEN-E CDN forms. There are 2 shareholders and both are Canadian with no US ties.

    I have a major privacy concerns with the IRS sticking its nose into Canadians and want to know how to fight back (contacting MP, minister of finance, etc.). For example, if I had (which i don’t) a Cuban business partner a couple of years ago, could the US use this information against me?

    Plus the form is impossible to understand and my accountant could not explain it to me either.

    This law is to find US Citizens avoiding US tax, not harass Canadians and waste our time.

    It’s the first time that I feel the Royal Bank (40 year customer) and my country is letting me down. I am truly angry that Canada agreed to this. It’s costing Canadians 100s of millions and our government needs to fight back or they are just patsies of the IRS.

    What can I do to fight this?

    Also, what happens if I don’t agree? Not sure if it means withholding tax I can’t recover or closed account or what?

    1. Lynne Swanson Post author

      @Jeff Welcome to Sandbox.

      You are correct. Your bank and your country have betrayed you.  The Conservative government–with the support and encouragement of the Canadian Bankers Association–sold out Canadian citizens, residents,, laws, rights and sovereignty for a foreign government.  They passed a law overriding all Canadian laws for a foreign government.

      Although the Liberals spoke and wrote strongly against FATCA, they have done a total flip flop.  They won’t even pass an amendment they presented to protect Canadian citizens and residents.

      You can watch some of the Liberal FATCA Flip Flop:

      We have been fighting FATCA unsuccessfully since 2011.  Our government and banks refuse to stand up for Canadian citizens and residents.

      Several people believed Canadians would finally wake up when people like you were affected.  Yet most Canadians are simply signing the forms and moving on.

      I am glad you see the significance of this.  My understanding is if you do not sign the forms, your accounts will be reported to CRA which will pass the information on to the IRS.  This will not just be income. It will include total assets, transactions, account balances, account numbers and other personal information.

      Your bank should not close your account–although that is happening in many countries.  I’m not sure about withholding.  Can someone else answer that question?

      You can join the fight by writing to Cabinet and your MP.  You can encourage others to do the same.  If you are willing, I can ask the lawyer for our lawsuit if you could become involved as a witness.  You can donate to the lawsuit when we do our next round of fundraising.

      As you have noted, the US is now on the road to becoming the world’s largest tax haven because of this financial attack on other countries.

      I hope you will continue to hang out here.

    2. nobledreamer-Tricia

      Hi Jeff,

      Can understand totally your anger. But one thing needs clarification. 

      Did you recently buy these listed securities? If so, you are not hearing from the bank because of FATCA per sé. This would be the result of what is known as the Qualified Intermediary Program which has been in place since 2001. Anyone investing in US securities has been required to fill out a type W8 for a variety of reasons. 

      If you have owned these for a while it is very definitely because of FATCA. The banks are now required to ask EVERY entitiy that has an account, whether or not they are a “US Person.” As Lynne mentioned if you do not fill it out, your bank will forward your information to the CRA as a “US account.”I do not know if the bank is required to report the reason the account is reported. So whether CRA knows why or can/will intervene is unknown. 

      The W8BEN-E does not go to the IRS. It stays in the bank’s records as proof of their “due dilligence.” I am not saying what your choice of action should be. However, if you fill the form out, that should be the end of it.  If you do not, a whole different can of worms will open up which is not meant for you in the first place and will be a huge pain-in-the-a**. 

      As to the form itself, it is NOT required that one fill out the whole thing. Everyone fills out Part I, point being to identify one’s Chapter 3 (FDAP) status & one’s Chapter 4 (FATCA) status. This is based upon what kind of income is earned so IRS knows whether tax will be owed or not. I will include a link with a simple explanation.

      If you have the form, please look at Part 1. You answer Q 1-2; wait for now on 3-4. Go to question 5. You will only check ONE of these boxes. After that you will likely not need Part II or Part III (unless you ARE paying US tax on these investments and then you would want to claim the treaty benefit). After that, all the “Parts” are the type of business classification that are in question 5. You pick the one you checked, go to the corresponding section and fill it out. Most of these only involve checking a box that identifies what is involved with that type of company.   After that, you go to page 8 Part XXX and sign a certification stating what you have provided on the form is true. 

      I am presuming you are not what is called a Foreign Financial Institution ( a bank, credit union, etc).So you basically skip to Part XIII. Are you a publicly traded corporation or a CCPC? I am sure we can get this figured out for you if you like. 

      I hope you DO complain, write your MP, join the fight. You can still do that, even if you fill out the W8 BEN-E. 

      Basically there is a huge difference in Chapter 3 withholding and Chapter 4 withholding. Chapter 3 is normal withholding because tax is due to the U.S. on the earnings of the account. Chapter 4 withholding is about compliance with FATCA. This will not happen until there has been a lot of back and forth over a period of 18 months. You would have to refuse to comply with filling out the form, and be deemed a “recalcitrant” account holder. You are not in danger of having your account closed or frozen at the moment. Based upon we are NOT seeing this happen in Canada-primarily in Europe. And that is what is in the IGA.  


    3. Lynne Swanson Post author

      Thanks Tricia for that info on how to complete the forms.  Incredible that a form is so complicated a businessman and his accountant cannot understand it.

      As challenging as it is to Anglo Canadians, I can only imagine how much more horrendous it is in countries where bank employees and customers may not even speak English. That could even be the case in some Quebec banks.

    4. nobledreamer-Tricia

      you’re welcome Lynne.


      I quite remember my terror when I first saw that form. It was only after looking at it long and hard that I realized there was a correlative element. 

      I simply cannot imagine what it must be like if one does not speak English. Its hard enough as it is! I just hope Jeff sees our comments…….



  2. PatCanadian

    Thanks for this post, Lynne, on BMO’s FATCA Hunt.

    As Outraged Canadian says, “I am just so tired of all this. It feels like a nightmare that just won’t go away, and just gets worse every night. I just want to be left alone to live my life. My Canadian life.”

    Well what really bothers me is the hypocrisy of the Good Old USA in not allowing us to lead our normal Canadian lives.. Please see the following:

    Which states, “While traditional offshore centers have folded due to pressure from Fatca and the OECD, the battle to attract the untaxed dosh has started in earnest between various U.S. states.”

    Here we are in Canada, paying our Canadian taxes and trying to lead normal lives, while this goes on.

    1. Jeff

      Just got trapped in this bs as well. I have never been a US Citizen and am having to complete IRS Forms…what the $&(). ? I am so angry right now.

    2. PatCanadian

      Hi Jeff and welcome. Unbelievable that a 100% Canadian is being affected by FATCA. If only the rest got as mad as you and spoke out. I renounced my US citizenship two years ago. Now being a retired 100% Canadian I have decided, on principle, to never invest in anything US. If that’s possible for you it may be one way out of this mess.

      Otherwise, Tricia has explained more than I could as to how to deal with this difficult situation including the formidable forms.

  3. OutragedCanadian

    I am just so tired of all this. It feels like a nightmare that just won’t go away,  and just gets worse every night. I just want to be left alone to live my life. My Canadian life. I feel like the CRA, our banks, and our gov’t has abandoned us, betrayed us, and treats us as if we are not people, just inconsequential numbers.

  4. Norman Diamond

    “Effective July 1, 2014, Canadian legislation requires Canadian financial institutions to identify, document and report relevant information on accounts held by U.S. persons to Canada Revenue Agency. This includes all business entities operating accounts in Canada.”

    Bank of Montreal is a business entity operating accounts in Canada. Therefore accounts held by Bank of Montreal are included in accounts held by U.S. persons. Therefore Canadian financial institutions are required to identify, document and report relevant information on accounts held by Bank of Montreal to Canada Revenue Agency.

    “The undersigned certifies:
    That the FATCA Entity Classification Type (FECT) for
    Bank of Montreal (insert Legal Name)
    (hereinafter called the ‘Business’) is”
    [various kinds of foreign entities and various kinds of US entities, but no possible kind of Canadian entity — though this is based on an assumption that Bank of Montreal is a Canadian entity not a foreign none]

    “If the undersigned is not able to confirm today the US Citizenship or US Residency of the owners/partners who have a 25% or greater beneficial ownership of the Buiness, the undersigned is required to provide this information to the Bank within 90 days; otherwise the Business owner/partner and account information will be reported to CRA.”

    So Bank of Montreal has 90 days in which to confirm that Bank of Montreal’s shareholders hold US Citizenship or US Residency. If Bank of Montreal can’t confirm this, for example if too many Bank of Montreal shareholders might hold Canadian Citizenship and Canadian Residency, Bank of Montreal shareholders and account information will be reported to CRA.

    Oh noes! Bank of Montreal’s information will be reported to CRA! Bank of Montreal had better run and hide. Maybe the world’s biggest tax haven would be a good place for Bank of Montreal to run to.

  5. badger

    Thank you for posting this Lynne, and thanks to Keith. I have posted it in various threads at IBS, though it probably could/should have its own thread there?

  6. DoD

    RBC investing sent a FATCA letter to my wife. She pointed out that her account was a RRIF and non-reportable and she refused to sign either a W9 or W8-Ben. They backed off and apologized because her adviser knew she would have pulled the account.

    1. Lynne Swanson Post author

      Is your wife considered a U.S. Person?

      Could we get a copy of the letter? CRA responded to Dusseault and Arvay that RRSPs are not reportable. As I have said, not reportable is very different than not reported. This is a perfect example of that.

    2. DoD

      E-mail from RBC Documentation notification

      Good Afternoon,

      As you know, the regulatory environment that we operate our business within is ever-changing due to increased global criminal activity. As such, our industry is always initiating changes to the kinds of documentation that we are required to collect from clients. One of the documents that is required is called a W-8BEN form and this form is required as part of the new U.S. Foreign Account Tax Compliance Act (FATCA). The W-8BEN form confirms that you are not a US person or entity and it ensures that if you hold individual U.S. securities that pay income, you are benefiting from the lower withholding tax as a result of Canada and the United States having a tax treaty. I have attached an article that explains in further detail what FATCA is and how it applies to Canadians.

      I will be mailing the form to your home address today. When you receive it, please sign and date where indicated, and then mail the original document back to us in the postage-paid envelope enclosed.

      Please let me know if you have any questions.

      Kind Regards

      I called, said we wouldn’t fill it in and threw the form in the bin. Interestingly, it was filled in as ” i am not a US person” even tho. the account manager knew that wasn’t true.

    1. Lynne Swanson Post author

      Angel Bougethner is reporting TD’s letter says person with ability to report funds. I have not seen that letter but I’m trying to get a copy.

      A friend who has no US connection asked me this morning why Canadian businesses are screaming about this. Why aren’t organizations like the Chamber of Commerce, etc speaking out?

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