Category Archives: IRS

Ginny Writes to London Mayor Boris Johnson. Help Stop FATCA with ADCS.

November 22, 2014
Boris Johnson
Mayor of London
Greater London Authority
City Hall
The Queen’s Walk
London SE1 2AA
Dear Mr. Johnson:
RE: IRS
Yes, Boris Johnson I know just how you feel.
But the article is incorrect about the amount for the cut off and you would owe a lot more than just the capital gains on your house. Fines and exit fees could amount to hefty penalties for failure to file income reports when you, like a lot of of us, didn’t know about these until recently. Because the IRS never informed anyone or published their regulations in any way that the public would see.
The USA is the only country in the WORLD that taxes by citizenship, rather than residence. They need $$$ to fund their deficit and they are now going after every person in every country that they consider American. Like you, many people who lived in the USA for a few years or more who had no choice where they were born, never have considered themselves US citizens. You are a British citizen clearly. You have no ties to the USA. I know that feeling too.
However, to date there are only two people in the world, my co- plaintiff and I who are taking on this issue (in our true home country Canada, as full Canadian citizens, in our courts) because Canada entered into an agreement with the USA which turns over our banking information via our CRA. Just as the UK has done by entering into a similar intergovernmental agreement. As you are now finding out. I am not saying that to toot my own horn. I am saying it so that you might consider another option.
You might consider launching your own legal protest in the UK on behalf of people there like you, that the USA deems to be tax invaders. I bet that might be an interesting political launching pad for you, considering the USA went to war with the UK over off shore taxing in the first place. As in the ‘real’ Tea Party Revolution. I assume you well know your history? And that you see the irony?
And you have political cache that I don’t.
It’s not easy and it sure is expensive. But principles and access to justice are very important things to stand up for, in my opinion. Your mentor, Mr. Churchill would no doubt be proud of you if you did.
All the best, Boris.
Ginny Hillis,
Windsor Ontario, Canada
[Plaintiff in Canadian FATCA IGA lawsuit against Government of Canada]

Legality of US IGA's Analyzed – and Debunked

It’s well worth reading some of the more recent posts and articles, to keep an eye on what is happening in the US regarding FATCA – as we’ve learned to our dismay, that what happens down there will ultimately affect what happens up here.
Forbes has published a piece by James George Jatras, in which he says.
“The trouble is, FATCA doesn’t authorize Treasury to make these agreements with foreign governments, nor are IGAs treaties that will be submitted to the Senate for advice and consent.”

Forbes: Unauthorized FATCA ‘Intergovernmental Agreements’ Are Part Of Obama’s Executive Overreach

Jack Townsend, on his blog ‘Federal Tax Crimes’, posted the letter responding to a US congressman question on whether the IRS/Treasury Dept can legally enter into these agreements with other countries.
http://federaltaxcrimes.blogspot.ca/2014/07/irs-letter-to-congressman-defending-its.html
And, finally, Allison Christian’s post analyzing the legality:
http://taxpol.blogspot.com.au/2014/07/irs-claims-statutory-authority-for.html
Although Ms. Christian’s post is speaking to the legality, it’s very readable and should make the signer of that letter, Alastair M. Fitzpayne. hang his head in shame for not undertaking the proper legal research. (That’s the charitable version, others think it was simply an out and out lie).
She says,
“Instead of citing non-existent statutory authority that is easily refuted by simple reading, Treasury should own what it is doing outright.”
Every day I am thankful we have such prominent, knowledgeable and well respected people shining the spotlight on FATCA and the IGAs.
 

OMG! IRS Wants Me!

We have all had our OMG Moment. Now that the FATCA rollout has begun, there will be many more “OMG Moments”. This past weekend, I heard about a particularly egregious, frightening and unfair situation (yes, some are worse than others). In response to this,  John Richardson suggested that I post the following:

If you are newly in your OMG Moment, we hope this will help.You are among friends here. Thanks John!

OMG!

Have you just been told that you are required to file U.S. tax returns?

I am hearing more and more reports of people having their OMG (“Oh My God”) Moment where they are hearing for the first time that they may be required to file U.S. tax returns.

You are experiencing one of the most terrifying, confusing and disorienting moments that you will ever have in your life. The range of emotions you are feeling are so difficult to manage that you are having difficulty responding.

Some simple advice.

1. You are NOT in a position to make any quick “commitments” which are NOT REASONED decisions but are REACTIONS to a frightening and confusing situation.

2. Only “U.S. persons” are required to file U.S. tax returns. You may NOT be one. Your first step is to take steps to determine  your citizenship status.

A. Being born in the U.S. is NOT conclusive proof of U.S. citizenship. You may have relinquished it along the way.

B.There is NO presumption whatsoever that somebody born outside the U.S. is a U.S. citizen.

3. Since you have not been in the U.S. tax system you do NOT have a tax problem. Therefore you do NOT begin by calling an accountant/tax preparer/tax lawyer. (Once you are in the U.S. tax system you will be rewarded with “tax problems”. At the moment you have a “possible compliance” problem (if it determined that you are a U.S. person).

Accountants, tax preparers, your bank and the vast majority of lawyers are NOT qualified to advise you on the starting question:

“Are you in fact a U.S. person?”

4. The advice “What To Do Before Contacting A Lawyer” is important and applies to to contacting accountants as well.

5. You are NOT alone. Estimates are that there are at least one million  Canadian citizens affected by this injustice and unfairness. Remember that you are NOT alone.

6. You have done NOTHING WRONG. The U.S. has never made any effort to educate Canadians of U.S. origin that their laws levy taxes on the basis of citizenship and those born in the U.S. begin life as U.S. citizens.

You did NOT choose where you were born.

Being born in the U.S. means that you started life as a U.S. citizen. You may have relinquished U.S. citizenship.

7. Information sessions are available to you that you can attend anonymously at a very small fee.

Patrick Cain Article "Appalled, incredulous and angry"

On the Global Calgary website, I ran across a new article by Patrick Cain, called  ‘Appalled, incredulous and angry’: Canadians slam law giving IRS personal info
“More than 100 people wrote to the federal Finance Department in February and March slamming a new Canadian law that would require banks to give the IRS  financial information of clients with apparent U.S. citizenship.
They got no response from Ottawa.”

‘Appalled, incredulous and angry’: Canadians slam law giving IRS personal info


He mentions several letters, as well as the detailed analysis by Allison Christians and Arthur Cockfield.
Let’s hope this is just the first of many such articles laying out the truth of what the Conservatives have done.
(Do I detect an undertone of outrage and sympathy?  Or is it just wishful thinking on my part?)

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.
 

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
 
 
 
 

US Senate Finance Committee Submission–Richardson, Yates and Kish

Here’s an excellent submission (Request for Tax Rule Changes) to the U.S. Senate Finance Committee.
This was written by Toronto lawyer John Richardson, University of Toronto professor Dr. Stephen Kish and (this is huge!) U.S. attorney Willard Yates.  Mr. Yates’ involvement is significant because he retired from Office of Associate Chief Counsel (International) (ACCI), Internal Revenue Service after 31 years of service.
The 32 page comprehensive submission deals with everything from problems of citizenship based taxation to the financial and psychological costs of renouncing US citizenship. Despite the complexity of issues covered, it is quite easy to understand for most of us who have been around this issue for a while (although newbies may very well find it overwhelming and frightening).
The report is also posted at citizenshipsolutions.ca, John Richardson’s Canadian website designed to counsel US citizens abroad who find themselves having to live in a FATCA and FBAR world.

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:
http://www.advisor.ca/tax/tax-news/new-rules-for-u-s-taxpayers-in-canada-with-mutual-funds-141931
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.
 
 
 

Cruzing in Reverse

Canadian immigration lawyers have said U.S. Ted Cruz should be able to renounce Canadian citizenship “lickety-split” if there are no security or mental health issues.
Cruzing Out of CanadaA letter/article from Lynne Swanson (aka Blaze) to Senator Cruz asks him what’s taking so long to shake his embarrassing Canadian citizenship.  Cruzing In Reverse also tells Senator Cruz how different the situation is for “accidental American” Canadians who simply (like him) want to shake free from their country of “technical” citizenship.
Continue reading Cruzing in Reverse

Citizenship Based Taxation: Unique or Outrageous

If all countries adopted American citizenship and tax laws, US President Barack Obama, Senator Ted Cruz and Secretary of State would finally agree on one thing. Citizenship-Based Taxation and FATCA are “Outrageous.”
Citizenship-Based Taxation: Unique or Outrageous was published in Tax-News today. This is an international tax publication based in the UK. The article by Lynne Swanson (aka Blaze) was originally published as a Letter to the Editor in Tax News International two weeks ago, but is only available to subscribers there. Continue reading Citizenship Based Taxation: Unique or Outrageous