Maple Sandbox Archive – Living The History Of Bringing FATCA and FBAR To Canada

On March 18, 2010 President Barack Obama signed FATCA into law. The next step was to export this U.S. law to the world. FATCA was (and is) for the purpose of imposing U.S. citizenship-based taxation on the residents of other countries.

The Maple Sandbox blog was created by two Canadians who thought it was important to oppose and document the dangers that the implementation of FATCA on Canadian soil brought to Canada and Canadians.

The most recent version of the blog was captured in 2019 at where it can be viewed.

IRS Claims Canadian Gordon Pape owes $48,730.57

uncle Sam PayThe IRS is after Canadian investment guru and author Gordon Pape. They claim he owes them $48,730.57.
Mr. Pape wrote of his plight in this month’s Zoomer magazine. Because the article has only been published in print format, I am unable to link to it here. I am not uploading a copy of the article for copyright reasons, but here are some of the highlights.
Mr. Pape was born in the U.S. He moved To Canada with his parents when he was 13. He became a Canadian citizen in Canada’s Centennial Year (1967) and “promptly” received a CLN. (Lucky guy!)
He spends part of each winter in Florida and completed 1040NR taX return with the closer connection form. Then the IRS was after his money.
Mr. Pape says:

Imagine opening your mail and finding a bill from the U.S. Internal Revenue Service (IRS) for $48,730.57
That’s what happened to me during the summer, and I’m not a U.S. citizen. I don’t even own property in the States.

“Needless to say, I was shocked. Then, I was angry. I suddenly understood first-hand what the estimated one million Canadian residents with U.S. ties are experiencing as the IRS aggressively pursues anyone who has failed to file an American return declaring their world-wide income.”

Mr. Papr warns other snowbirds. He sent to IRS a copy of his CLN and is awaiting their response. He concludes:

“I certainly have no intention of paying them $48,000 – or anything for that matter.”

I think Mr. Pape has had an OMG moment. He is fortunate to have a CLN. I hope this may inspire him to help with our battle.

Weird Stuff Happening

There is some very weird stuff happening here. Whatever it is is messing up display of comments and ability to respond to them. Even I, as an administrator and editor, cannot see them without going to the Dashboard,
I also can’t respond to them. I have tried to correct this with my rather limited geeky skills to no avail. I have alerted Outraged and hope she can fix it.
So, Jan and Gani that is why your comments are not showing (at least they are not showing for me without going to the Dashboard.
Please bear with us everyone. I don’t think this is NSA or CSIS spying on us–but in today’s world, who knows?

ADCS FATCA Questions. Trudeau Reply

On March 23, ADCS sent a letter to Liberal Leader Justin Trudeau, other party leaders and some MPs.
The letter to Justin Trudeau said:

Thank you to you, the Liberal Party of Canada and some of your MPs for standing up for Canadian citizens and residents, whether born in the United States, in Canada or in any other country, against the American Foreign Account Tax Compliance Act (FATCA) Intergovernmental Agreement (IGA) enabling legislation.
You may be aware we have commenced litigation against the Government of Canada resulting from the Conservative government surrendering Canadian citizens, residents, laws, constitution and sovereignty to the United States for FATCA.
We are disappointed at your near silence since the FATCA enabling act was passed. We are, therefore, contacting you now to request your party’s policy in writing on what you would do if the Liberal Party is elected to form the next government.
Specifically, we ask:
1. Will your party commit to repealing the FATCA IGA in its entirety?
2. If not, why not?
3. What action will your party take to protect Canadian citizens and residents from the demands of a foreign government under FATCA?
4. What action will your party take to uphold Canadian laws, the constitution, the Charter of Rights and Freedoms and Canadian sovereignty as they relate to FATCA?
5. What action will your party take to agree with our lawsuit that the FATCA enabling Act violates the Charter of Rights and Freedoms and Canada’s constitution? Will you direct the Ministry of Justice to quickly reach an acceptable settlement with us?
6. What action will your party take to ensure a foreign law does not prevail over Canadian privacy, human rights, banking and other laws?
7. What is your time frame for any commitment you may make?
Approximately one million Canadians, their families and business associates are affected by FATCA and many will want to know which party represents their needs and rights. Many will make their voting decision based on this.
We hope the Liberal Party will fight for their rights as Canadians.
Stephen Kish, Ph.D, Chair
John Richardson, Co-Chair
Patricia Moon, Secretary/Treasurer
Carol Tapanila, Director
Lynne Swanson, Chair, Legal Challenge Committee

On June 25 (after prodding), Liberal Leader Justin Trudeau replied.

Dear Ms. Swanson:
Thank you for taking the time to write to me with your concerns regarding the Foreign Account Tax Compliance Act (FATCA).
The safeguarding of personal privacy has become an increasingly important issue to all Canadians. The government’s move to ensure that information is reported to the U.S. through Canada Revenue Agency (CRA) and not directly from the banks was a positive step; however, the implications of having the CRA report to a foreign government about Canadian citizens are still troublesome. The Liberal Party of Canada believes that the Conservative government’s efforts to safeguard the personal privacy of Canadians have been inadequate.
While the United States has the right to target tax evaders using offshore accounts, targeting hard working Canadians who pay taxes is unfair. The government of Canada has a responsibility to stand up for its citizens when foreign governments are encroaching on their rights. We believe that the deal reached between Canada and the U.S. is insufficient to protect affected Canadians.
Thank you once again for writing to me; I always appreciate it when Canadians take the time to share their concerns with me. It is through such exchanges of ideas and opinions that I can best represent not only my constituents, but all Canadians.
Justin J.P. Trudeau

So there we have what we can expect from the Liberals. Our new Prime Minister called the Conservative actions “troublesome…inadequate…insufficient, but did not say what a Liberal government would do.
We need to keep up the fight.
We need to remind Trudeau of his words “A Canadian is a Canadian is a Canadian.”
We need to remind him we require “Real Change Now”
We need to remind him of our right to privacy.
We need to remind him his father’s greatest gift to Canada was the Charter of Rights and Freedoms.
We need to remind him to uphold our rights as Canadians.
We need to remind him: “The government of Canada has a responsibility to stand up for its citizens when foreign governments are encroaching on their rights.”

"Expedited" (Two Year) Treasury Request Filled (Sort of)

James Jatras at Repeal FATCA waited two years to receive an “expedited” response from U.S. Treasury to a Freedom of Information Request on FATCA IGAs.
Jim has not yet reviewed the 1164 pages of information (nor have Repeal FATCAI). He provides a link to the documents and says:

I rely on readers to review them and notify me at and the interested public of anything of significance.

To some of us in an e-mail, Jim also said:

It would be good to have as many pairs of eyes as possible review these docs for anything that might be useful, particularly in the Canadian and US litigation. My guess is that most of it is fluff – maybe all of it— but perhaps something got in here that’s more telling than they supposed when they released it. As noted, I have not yet reviewed the docs. At this time, I do not plan to issue my own analysis.
Second, please report anything of interest – especially if perhaps helpful for (a) appeal of withholding of some docs or (b) our friends in Congress opposed to FATCA and the IGAs – to me. Also notify the larger community for their insights.

Two years “Expedited.” Really?
Actually, Jim did better than I did. I submitted a Freedom of Information request to U.S. State Department for some personal information in September of 2012. I’m still waiting after more than three years and many phone calls to them.

Long-term Canadian expats may still be eligible to vote in the federal election

This may be of interest to Canadian citizens living outside our borders for more than five years. If you are able and willing to travel to the last riding in which you resided in Canada, with proof of your ID, your Canadian citizenship, and of your residence in that riding (an old utility bill or tax assessment from CRA might do that trick), you can in fact vote either in advance poll or on election day.
Maybe bring a printed copy of the above CBC story with you.
Your chance to help vote Harper into the oblivion he and his government so richly deserve. For more reasons than I have space to list here, but we can start with the FATCA IGA for openers.

University of Windsor – Faculty of Law – Special Program Thursday, October 8, 2015

“Tax havens” vs. “Bank Secrecy” and a world of residence based taxation

Governments in general and the U.S. government in particular, have become more concerned that U.S. citizens either move their capital from the United States or hide their capital from the United States. People who would move their capital from the United States so that they could generate a better “after tax” rate of return. People who would hide their money from the United States so that their capital and income would escape U.S. Taxation. Any country with tax rates lower than U.S. tax rates would be considered to be (from a U.S. perspective) a “tax haven”. Any country that does not disclose the identity of its customers to the United States would be considered to be engaged in “Bank Secrecy”. As more and more income is generated from capital, governments the world over, have become concerned about capital escaping taxation. This concern has culminated in the OECD “Common Reporting Standard” which will “keep the capital of a country’s residents” in that “person’s country of residence”. In other words, countries are concerned that the residents of a given country, pay tax to that country. This principle reflects the principle that all countries (save one) impose taxation based on the fact of “residence” in the country.
FATCA and U.S. citizenship aka “place of birth taxation” or how to impose U.S. taxation on the world
In 2010 the U.S. Congress passed and President Barack Obama signed into law the U.S. “Foreign Account Tax Compliance Act” which is known as FATCA. It was aimed at resident U.S. citizens, green card holders, etc. President Obama, Senator Carl Levin and others claimed that the purpose of FATCA was to combat tax evasion, tax havens and bank secrecy. That may be a partial truth.The truth is that FATCA attacks “middle class” Americans abroad AND expands the U.S. tax base into other nations.

President Obama signed FATCA into law on March 18, 2010. Senator Carl Levin, a co-sponsor of the FATCA legislation, declared that “offshore tax abuses [targeted by FATCA]cost the federal treasury an estimated $100 billion in lost tax revenues annually” 156 Cong. Rec. 5 S1745-01 (2010). FATCA became law as the IRS began its Offshore Voluntary Disclosure Program (OVDP), which since 2009 has allowed U.S. taxpayers with undisclosed overseas assets to disclose them and pay reduced penalties. By 2014, the OVDP collected $6.5 billion through voluntary disclosures from 45,000 participants. “IRS Makes Changes to Offshore Programs; Revisions Ease Burden and Help More Taxpayers Come into Compliance,”;-Revisions-Ease- Burden-and-Help-More-Taxpayers-Come-into-Compliance (last visited Sept. 15, 2015). The success of the voluntary program has likely been enhanced by the existence of FATCA.

Continue reading University of Windsor – Faculty of Law – Special Program Thursday, October 8, 2015

Plaintiffs Giny and Gwen are Denied Injunction Pending Summary Trial Appeal

Cross posted at ADCSovereignty
Here is the actual Order for denying the injunction:
Our commentary will follow but here are the reasons provided by the Court for denying the injunction request:

[1] On September 15, 2015 the Federal Court dismissed, in part, the appellants’ action for declaratory and injunctive relief with respect to intention of the Minister to disclose certain financial information to the Internal Revenue Service of the United States of America. The summary trial decision of Justice Martineau addressed only that part of the action dealing with what might be characterized as the statutory interpretation and statutory authority of the Minister to make the disclosure. Charter challenges to the proposed action were, on consent, not addressed and await trial. Thus, the summary judgment dealt exclusively with the allegation that the disclosure was contrary to the Canada–United States Tax Convention Act, 1984 (S.C. 1984, c. 20), the Canada-US Tax Treaty and Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)), collectively described as the authorizing legislation.
[2] The appellants move on an urgent basis for an interlocutory injunction, effectively staying the disclosure of their financial information by the Canada Revenue Agency (CRA) to the Internal Revenue Service (IRS) under the authority of this legislation. The Minister has made clear that she intends to disclose this information at the close of business today, hours from now.
[3] By way of background, and at the highest level of generality, the legislation mandates the disclosure of information about “US persons” held by Canadian banks to the CRA, and provides for the CRA to automatically disclose that information to the IRS on an annual basis. The IRS may or may not use that information to pursue enforcement actions against US persons resident in Canada.
[4] The appellants are “US persons” by virtue of birth, but have spent their working lives in Canada and are Canadian citizens. They do not hold US passports. They claim to be “accidental Americans”, US citizens only by reason of birth. Their information would be disclosed under the regime, which could lead to the IRS enforcement action. The judgment below is candid that the application of the law could cause the appellants serious difficulties.
[5] The appellants argue, amongst several other grounds, that the disclosure of this information constitutes assistance to the United States in its enforcement and collection of its taxes, which is prohibited under Article XXVI A of the Canada-US Tax Treaty. The Federal Court found that this prohibition only applies once tax liability has been determined and is enforceable, and is thus not triggered, and that in any event, any such claim was premature.
[6] The appellants further argued that information sharing was only permissible when that information “may be relevant” to enforcing the treaty or domestic laws of a contracting state (Article XXVII), and as such the information must be assessed for relevance on a case-by-case basis rather than handed over in bulk. The judge below found that, even when the information is still in bulk form and has not been shown to have any further utility, it already meets the “may be relevant” test. The appellants argue, in support of the interlocutory injunction, that the learned judge’s reasons fail to respond to this argument; the judge erred in focussing on the fact that Canada cannot challenge US tax policy choices, but failed to explain how that establishes or meets the statutory requirement of relevance.
[7] The appellants also argue that the regime violates the non-discrimination provision of Article XXV, wherein a US National resident in Canada cannot be subject to a burden that is not also imposed on Canadians in Canada. The appellants argue that the privacy intrusion, and the burden of complying with the filing requirements, are thus unequally imposed on them as US Nationals resident in Canada. The judge rejected this argument. While he did not directly address the privacy interest, he said that the filing costs are borne by the banks rather than the individuals and thus cannot ground unequal treatment.
I. The test for an interlocutory injunction
[8] I am not satisfied that each of the three criteria governing the grant of an injunction or stay pending appeal set forth in RJR — MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, 1994 have been met.
[9] The appellants assert four serious questions to be addressed on appeal. At this stage the Court only needs to examine the questions and be satisfied that they “may” form the foundation of a meritorious appeal. In addition to the grounds reviewed above, the appellants argue that the automatic disclosure of taxpayer information of Canadian residents who are also US citizens, is not authorized by the Canada –US Tax Treaty. While Martineau J rejected this argument, and the subsidiary arguments which underlie it, the question at this stage is only whether the appellants might have a credible case to make an appeal. I am satisfied that they do.
[10] I am not, however, satisfied that the criteria of irreparable harm has been met. The Minister concedes, on two occasions in her memoranda, that “there is no taxpayer information concerning the Appellants in the batch of ‘slips’ that have been collected by the Minister from financial institutions pursuant to Par XVIII of the Income Tax Act and which the Minister must disclose to the United States, pursuant to the IGA, on or before September 30, 2015.”
[11] On this understanding, the appellants do not meet the second criteria of the RJR — MacDonald test. As no financial information concerning the appellants will be sent to the IRS, there can be no irreparable harm.
[12] Turning the third criteria, the balance of convenience, the Minister concedes that the appeal will not be moot as of this transfer of information this afternoon. The Minister concedes the existence of a continuing live controversy. While mootness is always an question for the panel of this Court hearing the appeal, at this stage, the Minister’s position that the appeal will not be moot tips the balance of convenience in favour of the Minister.
“Donald J. Rennie”