Category Archives: General Info

Solving US Citizenship Problems- Vancouver May 23, Geneva June 7, Dublin June 8, & London UK June 16 2017

Vancouver BC – Tuesday, May 23, 2017 Details below

Geneva CH Wednesday, June 7, 2017- Details TBA

Dublin IE – Thursday, June 8, 2017 – Details TBA

London UK – Friday, June 16, 2017 Details TBA

Have you received a FATCA letter or been warned of the consequences of being a U.S. person?

New this year in the U.S. assault on people and countries outside its borders, is the “second wave” of reporting – the “entity” reporting. This is nothing less than every financial entity – any corporation, non-profit corporation, your Canadian controlled-private corporation (CCPC), any fund with shareholders-is fair game for an associated financial lender, bank etc to ask:

“Who are your clients, shareholders? Are they, or have they ever been, U.S. citizens?”

If so, they need to fill out a US tax form. (W8-no withholding for non-US taxpayers or W9-for withholding on US taxpayers) to be kept on file with the bank.

My financial advisor indicated he now realized I had not exagerrated the extent of this U.S. interference in Canada. He now has to ask each and every new client, regardless of what they are buying,

“Are you, or have you ever been, a U.S. citizen?”

Utterly outrageous.

Why am I getting letters from my bank all of a sudden?

The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.

What individuals are U.S. taxpayers? Who is a U.S. citizen?

There are individuals that the U.S. government would define as “U.S. citizens” who:

do NOT agree that they are U.S. citizens because they have performed a “relinquishing act” under applicable U.S. laws;
do NOT even know that they may be U.S. citizens because they have never lived in the United States
are citizens and residents of countries that do NOT allow multiple citizenships
To put it another way: one’s status as a U.S. citizen is NOT always clear.

I have never heard of these requirements! What determines the income that must be reported to the IRS? What “Information Returns” are required to be reported to the IRS?

FBAR (Now called FinCen 114)
FATCA 8938 – Report of Specified Foreign Assets
5471 – Information return for Foreign Corporation
3520 – Information return for a “Foreign Trust”
3520A – related to the 3520
8621 – for mutual funds
8965 – for exemption regarding ACA (“Obamacare”)
I am only a snowbird! Why does this affect me?

Substantial Presence Test
Form 8840 Closer Connection Exception Statement for Aliens
Caution: Streamlined Programs & 35 day rule – Catch 22

What are the ways I can become compliant?

Offshore Voluntary Disclosure Program – AKA “OVDP – Not appropriate for the vast majority of people
Streamlined Compliance – A pre-packaged way to “clean up” past compliance problems
Obeying the law – filing amended tax returns outside the “IRS Created” programs
Delinquent FBAR Submission Procedures

What costs are involved in renouncing U.S. citizenship?

The costs of a total of 6 years (5 years prior the year of renuncation plus the year of renunciation) of tax compliance and information returns
The cost of any back taxes and penalties
A $2350 administrative fee
Possibility of having to pay an “Exit Tax” (which can be the biggest problem)

VANCOUVER BC
WHEN: Tuesday, May 23, 2017 1:00 – 3:00 pm
WHERE: 1010 Richards Street, Vancouver B C V6B 3E4 (Downtown) MAP
Richards & Nelson, Gallery Condo Building, Amenity Room, Entrance at REAR of BLDG on lane.
Metered parking on street or lot at Richards & Smithe. Canada Line – Yaletown stop.
Expo & Millenium lines – Granville Station.
ADMISSION:PLEASE REGISTER IN ADVANCE by email to john at citizenshipsolutions dot ca
COST: $20 payable in cash at the door

Information presented is NOT intended or offered as legal or accounting advice specific to your situation.

Synopsis: Solving U.S. Citizenship Problem with John Richardson (London, Ontario)

Finally, I’m posting a synopsis of Solving the Problem of US Citizenship information session presented by John Richardson of citizenshipsolutions.ca that was held in London, Ontario on February 8, 2014.

I apologize for the delay. Other FATCA projects have consumed my life.

You can read the synopsis in the link, but here are a few highlights:

CITIZENSHIP:

John first gave an overview of US citizenship laws, tax laws, renunciation and relinquishment and many changes that have taken place over decades.

People have many differing circumstances and each one is unique. Because of the complexities, John stressed:

 “The bottom line is you have to check the law at the time the act took place.”

 For people born in Canada to one or more parent born in the U.S., John suggested they should not automatically assume they are US citizens or US persons. There are many different rules around that. In addition John questions whether the US can apply their laws on people born outside of U.S.  So, he recommended people explore that before making an assumption they must be a US citizen.

He said:

“I would never, never, never under any circumstances advise someone to simply swallow hook line and sinker, well my father was American, therefore I am American for a number of reasons.:

A Supreme Court decision from the 1960s dealt with the forcible destruction of US citizenship. John confirmed many in the room felt they were being forced to relinquish US citizenship.

John believes:

The forcible destruction of US citizenship is going to become THE argument on this issue.

 

John explained renunciation is one form of relinquishment, along with other expatriating acts like becoming a citizen of another country with the intent of relinquishing US citizenship, working for a foreign government and other actions.

For numerous reasons, John recommended people who are renouncing or relinquishing by other means should get a Certificate of Loss of Nationality (CLN) through US Department of State by renouncing or reporting relinquishing at a US Consulate.

John reported there are various reasons to

“Deal with this sooner, rather than later.”

For many different reasons, John thinks:

“U.S. citizenship is probably the most dangerous, toxic citizenship in the world today.”

Lynne advised people who became naturalized Canadian citizens may be able to get information from their Canadian citizenship file by applying through Access to Information at (http://www.cic.gc.ca/english/department/atip/form-imm5563.asp)

PERSONAL EFFECTS:

John recognized the toll these issues are taking on people.  He stressed:

“Your life, your health, your family is so, so much important than any of this stuff. If you focus on this in a way that jeopardizes the things that make life worthwhile, you’re going to let these people win–absolutely destroy your life.”

TAXES:

John said there are two types of US persons:

1. Those Who Are Compliant

2.  Those Who Are Not Compliant

No matter what, you’re going to have a problem.  “When we talk about U.S. taxes, we’re talking about much more than taxes. It’s a whole information reporting regime, which is a huge problem.”

He covered many of the issues relating to taxation, but said the most important message was:

“One thing you should absolutely not do is enter the Offshore Voluntary Disclosure Program” (OVDP).

CANADA REVENUE AGENCY, CANADIAN COURTS:

John explained that under the Canada-US Tax Treaty, CRA will not collect penalties for the IRS for Canadian citizens or residents. CRA also will not collect taxes for the IRS on a US citizen who also was a Canadian citizen at the time the tax liability arose.

Plus, under the Revenue Rule, Canadian courts will not issue a judgement for the IRS.

FATCA:

John thinks FATCA is a “gross abuse of power” by the United States.

“FATCA allows them to redefine any time they want what the information is and any person who is affected.”

 Lynne noted the proposed legislation to allow FATCA to be implemented will prevail over other federal laws, including banking, privacy and human rights laws.  Some individuals have contacted a constitutional lawyer about this and more information will be posted at Maple Sandbox (maplesandbox.ca and Isaac Brock Society (isaacbrocksociety.ca)

UPDATE: Money was raised and constitutional lawyer Joseph Arvay was retained on March 10 by Dr. Stephen Kish and Lynne Swanson to provide a legal opinion on a possible challenge to the FATCA IGA enabling legislation under the constitution and Charter of Rights and Freedoms.

 

Access to Basic Banking Services in Canada and FATCA

February 6, 2014 Update: Yesterday Canada’s Finance Minister announced Canada has signed a FATCA Intergovernmental Agreement with the United States. That may or may not change some of the information provided here. We will update as we learn more about what this may mean.

February 10, 2014 Update: Canada Revenue Agency has released some information on FATCA.  Again, we don’t know exactly what this will mean, but this information could be  important:

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.

ORIGINAL POST FOLLOWS:

Can a bank refuse to open an account for me because I was born in the United States? Can a Canadian bank close my long-standing account because I won’t tell them where I was born or I won’t give consent for my very personal banking information to be sent to IRS? Piggy Bank

Do I have to keep my life savings in a piggy bank to keep it safe from the United States?

Those are common questions we all have had since FATCA attacked our responsible, honest lives. Many of us have been customers at the same bank for years or decades. In some cases, staff who have known us all that time are aware of our U.S. connection. In other cases, they are not aware of it.

I am not a lawyer or banker and this information is not intended as legal or professional advice. It is simply some of the pieces of the puzzle which I have learned over the past two year.

The first thing to do is take a deep breath. Let it out slowly. Calm yourself.

In Canada, we have had no reports of a Canadian bank closing or refusing to open an account for anyone because of birthplace. That puts us far ahead of our friends in many other countries around the world.

The next thing to do is to know your rights under Canadian banking, privacy and human rights laws. This post will focus on Access to Basic Banking Services.

These regulations are complex. However, their meaning is communicated in easy-to-understand language from the Canadian Bankers Association. Yes, that’s the same organization that is insisting it must comply with FATCA.

But, check it out. To open an account, you must present two pieces of identification. These can include:

Canadian birth certificate, a Canadian driver’s license, your Canadian Social Insurance Number, Canadian citizenship certificate, Canadian permanent resident card, Canadian passport, Canadian old age security card, etc.

Did you notice only a Canadian birth certificate can be used to open an account in Canada? A foreign birth certificate cannot be used!  That is hugely significant–and makes Canada different from many countries around the world which require a birth certificate for opening an account.

Except for a Canadian passport, there is nothing on that list that reveals your place of birth. So, the solution is clear. Don’t use a Canadian passport with a US place of birth  opening an account. Use the other pieces of ID.

Children born in Canada to parents born in United States will, of course, have a Canadian birth certificate, so there should be no way for the bank to know if they may be considered to be “US persons.” For them, presenting that Canadian birth certificate may be their best protection.

The bank does have the right to know your date of birth. This is very different from knowing your place of birth. A driver’s license, citizenship certificate, permanent resident card and Old Age Security card all contain this information–but not place of birth. You are also required to provide your address and occupation–unless you are homeless or unemployed.

So, again, you are under no obligation to tell your bank where you were born to open an account. If they ask, just stick to the information they are entitled to know.

According to CBA, a bank can refuse to open an account if:

You plan to use it for illegal or fraudulent purposes; You have a history of fraudulent activity in financial services within the past seven years; You knowingly made false statements to open the account; You would subject other customers or employees to physical harm, harassment or abuse; You refuse to consent to verification of identification used to open the account.

 

Again, I don’t see anything there that says they can refuse an account if you refuse to tell them where you were born.

The bank is required to obtain your SIN for accounts that provide income so that income can be reported to CRA. You are not required to provide SIN for non-income accounts.

So, can a bank close an account if you refuse to tell them if you might be considered to be a “US person” or refuse to give consent for information to be transmitted to IRS?

Access to Basic Banking Services does not specifically address the issue of closing accounts. However, in a letter to US Treasury and IRS, TD Vice-President said (page 3):

If an FFI closed an account because such information was not provided,  the purpose of ABBS would be frustrated, and in addition, the FFI would subject to fines. Each violation of the ABBS requirements would subject the financial institution to a penalty of up to $200,000.

Even if an FFI could close an account of an uncooperative account holder, an FFI could not refuse to reopen an account for such individual if adequate identification under ABBS were again provided.

Despite all of that, Canadian Bankers Association FATCA Information for Clients says:

The majority of Canadians are not U.S. persons and, in most cases, FATCA will have little impact. If you have an existing account and there is an indication that you may be a U.S. person, or if you are opening a new account, your financial institution may ask you to provide additional information or documentation to demonstrate that you are not a U.S. person.

If you choose not to provide this additional documentation upon request, at a minimum, your financial institution may be required to withhold a tax of 30% on U.S. source paymentsthat you receive and send this money to the IRS. Also, your financial institution may refuse to open an account or may be required to close existing accounts.

CBA is sending mixed messages on its own website. It’s important we stand up to the banks and ensure that the rights CBA outlines in Access to Basic Banking Services are not compromised by their statement on FATCA. It’s also important we remain vigilant to ensure the government does not change those laws.

It’s also important to note this information applies to basic banking services only. Investment accounts are treated differently and some people have already been asked by investment arms of banks or by investment firms the “US person” question. I do not know the legalities of this or if anyone has challenged it.

In addition, credit unions fall under provincial jurisdiction, so they are regulated by the provinces and territories.

NOTE: The author is not a lawyer. Information on this page is not legal advice and should not be relied upon as such. If you believe you might have issues with US or any other legal authorities you should contact an attorney

 

 

February 8–Information Session London Ontario

Solving the Problem of U.S. Citizenship Uncle Sam More(UPDATED)

Uncle Sam wants up to 1 million Canadians. Actually, he doesn’t want them. He just wants their money and information about their legal Canadian bank, credit union and other accounts.

U.S. Treasury and Internal Revenue Service (IRS) insist they have they right to know all about the banking and other financial accounts of these Canadians simply because they were born in the United States, worked in the U.S. under a Green Card or have some other bizarre connection to United States. This includes joint accounts held with Canadian-born spouses, family or business partners.

Most are Canadian citizens—some for their entire lives or decades.

Canadian banks are spending up to $100 million each to comply with Foreign Account Tax Compliance Act (FATCA) to provide information to IRS on “US persons” among their customers—even though this violates Canadian banking, privacy and human rights laws.

Finance Minister Jim Flaherty has called FATCA “extraterratorial” and “unwarranted.” Yet, the Canadian government is negotiating an Intergovernmental Agreement with the United States in secret while keeping Canadians in the dark about whether their rights under Canada’s Charter of Rights and Freedoms will be sacrificed for a foreign government’s demands. An agreement has now been signed!

Many Canadians have lived this nightmare for over two years. Others are just becoming aware due to recent media coverage.

An information session “Solving the Problem of US Citizenship” will be held in the Room Change: Martha Bishop Room at Landon Branch Library, 167 Wortley Road, Saturday February 8, starting at 1:00 p.m. featuring Toronto lawyer John Richardson. Space is limited. $20 to cover costs.

Before you panic or rush to a U.S. tax accountant or lawyer, come and learn about your rights and options. Check out information in advance at citizenshipsolutions.ca

If you’re in the London area, we hope to see you there!  If you’re planning to attend, please e-mail me at maplesandbox dot ca

 

 

 

 

Hundreds of thousands affected by power blackouts

My heart goes out to those hundreds of thousands of people who have been affected by the massive power blackouts in Ontario, New Brunswick and Quebec.

I cannot imagine how miserable, and frightening it must have been with no heat and no electricity in the cold – for so long. Some were without power for over a week. That it’s been over the Christmas period, I’m sure just made it even worse.

According to the latest news this morning, 95% have had their power restored, but those that have power will now have to deal with the effects of the outage, such as spoiled food in their fridges and freezers, burst pipes, and all kinds of extra costs.

I saw some heartwarming stories of how people helped their neighbours, and how others helped strangers, just out of concern for their fellow human beings. And, I’m sure that the people who’ve come together here are out there doing what they can, as pulling together is what we’ve all, collectively, done so well. Sometimes I rant about how our society is becoming so narcissistic and egocentric – I’m glad to have been shown that I’m being too cynical and jaded.

I sincerely hope that all of you that were affected by the outages have come through with as little negative effects as possible. Be assured, the rest of Canada is pulling for you, and wishing you well.