Dual Citizens of Sweden, France, Netherlands, Denmark & Canada take note! Your Country WILL NOT Collect for the U.S.

cross-posted from citizenshiptaxation.ca

Last week in my email was a link to an article by Michael J DeBlis (unable to determine whether it was the father or the son). It runs in my memory that prior to the launch of the Tax Connections website, the younger Michael had started a blog that was specifically about expatriate issues and many of us joined and took part. He seemed particularly sympathetic and supportive of our plight and one who I would never have labelled a “condor.” And this post is in no way meant to be demeaning.

Imagine my surprise to read this:

Consider the following example. Pierre is a dual citizen of the U.S. and Canada who presently resides in Montreal. He has fastidiously filed U.S. and Canadian tax returns for the last ten years. Following an audit of his 2012 U.S. tax return, the IRS determined that there was a $ 20,000 deficiency and mailed him a notice of deficiency. Pierre timely filed a protest but Appeals found in favor of the IRS. Having failed to file a petition with the tax court, that deficiency soon became a $ 20,000 assessment.

The IRS now seeks to collect on its claim by imposing a tax lien on real estate owned by Pierre in Canada. Essentially, what the U.S. government is attempting to do is cajole collection officials from the Canadian Revenue Agency (Agence du revenue du Canada) to do its dirty work for it: namely, to collect Pierre’s unpaid U.S. taxes by enforcing an IRS tax lien on property located within Canada.

As incredible as this might sound, reliance upon a foreign taxing authority for assistance in collecting a tax judgment against a citizen of the requesting country is entirely permissible under the terms of the U.S.-Canadian Treaty. Of course, such a request must be accompanied by documents firmly establishing that the taxes have been finally determined.[ix]

Therefore, the Canadian Revenue Agency would have no choice but to enforce the lien and to collect the unpaid taxes. But what if Pierre filed a motion in a Canadian court to have the tax lien imposed by the Canadian Revenue Agency, at the behest of the IRS, set aside? Not surprisingly, the court would refuse Pierre’s request on the grounds that the imposition of the tax lien was proper under the terms of the treaty.

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Interview with John Richardson

We were recently contacted by a group called Financial Repression Authority, who say they are ‘a research firm focused on macroprudential policies representing risks such as ring-fencing regulations (TATCA)’. www.financialrepressionauthority.com.

They included a YouTube link for an interview with John Richardson, mainly speaking about FATCA. As always, John is very articulate and factual and I enjoyed listening to it.

Financial Repression Authority’s introduction to the interview:

“Gordon T Long Interview of John Richardson on FATCA .. John Richardson is a citizenship lawyer with a focus on FATCA .. this is a U.S. regulation which forms a component of macroprudential policy around ring-fencing of capital – FATCA imposes 30% witholding for any payments originating from the U.S. going to overseas banks or accounts if those banks or specific end-destination acccounts are not “compliant” with FATCA reporting requirements .. this podcast covers: How citizenship taxation has made U.S. citizenship a disability in the modern world .. How the U.S. “Exit Tax” triggered by renouncing U.S. citizenship operates to confiscate non-U.S. assets outside the U.S. .. discussion on the capital controls nature of FATCA ..” 38 minutes

FATCA Summary Trial Filing

GINNY AND GWEN’S MOTION RECORD FOR AUGUST 4-5 SUMMARY TRIAL IS NOW POSTED ON OUR ADCS WEBSITE. SEE VOLUME 1, VOLUME 2, VOLUME 3, AND VOLUME 4.

We argue that the FATCA IGA enabling legislation is contrary to sections of the Income Tax Act and the Canada-US Tax Treaty. These are “technical” arguments that we feel are appropriate for a summary trial. Charter considerations could not be used in the summary trial (but would be used in the full trial if required).

We say:

“The Tax Treaty Issues [raised in the summary trial] are discreet and distinct from the other issues raised by the plaintiffs. The plaintiffs’ other grounds of complaint involve division of powers and Charter breaches. These issues are factually and legally distinct from the operation of the Canada-US Tax Treaty and its relationship to the Impugned Provisions. As a result, the matters addressed in this motion [the summary trial] will not be re-litigated in the Charter and division of powers aspect of the plaintiffs’ claim.

The Tax Treaty Issues will need to be adjudicated even if they are not decided summarily. If this Court finds against the plaintiffs on this summary trial motion, the range of issues to canvass at [full] trial will nevertheless be significantly narrowed. If the plaintiff prevails [there are many "depending ons"] in respect of its claims in this motion, it will likely be unnecessary to proceed with the other issues raised by the plaintiffs.”

The motion includes a request for:

An order in the nature of a permanent prohibitive injunction preventing the disclosure of taxpayer information to the United States by the Minister of National Revenue and her authorized representative(s) where:
a. the taxpayer information relates to a taxable period in which the tax payer was a citizen of Canada;
b. the taxpayer information is not shown to be relevant for carrying out the provisions of the Tax Treaty Act or the domestic tax laws of Canada or the United States; or
c. the disclosure of the taxpayer information subjects United States nationals resident in Canada to taxation and requirements connected therewith that are more burdensome than the taxation and requirements connected therewith to which Canadian nationals resident in Canada are subjected.

Our summary trial will be heard at Federal Court, 701 West Georgia Street, Vancouver, British Columbia, commencing on Tuesday, August 4, 2015 at 9:30 a.m. for a maximum duration of two days.

UPDATE On May 8, 2015, the Arvay-Gruber team filed the comprehensive Memorandum of Fact and Law.

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]