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.
Did John Richardson offered advice/opinions for green card holder immigrants to the US and married to Americans?
Is it better to keep a Green Card status or seek citizenship if there is a possibility that the immigrant comes back to his country of origin later?
Would a green card holder face less discrimination or is it the same?
The choice is hard to make. While living in the US, green card holders cannot travel abroad for extended periods of time, without going through the pain of filing paperwork in order to keep our green cards.
Also, immigration lawyers advise to get your US citizenship ASAP to avoid being deported for some stupid reasons.
Is being a green card holder less toxic than actually having US citizenship?
Was were any discussions from this point of view?
Thanks.
Interesting.
One California lawyer I dealt with en route to my renunciation told me that he routinely and strenuously advises his green card holding clients AGAINST taking out US citizenship.
He is a tax lawyer, so like John Richardson, he knows very well what a burdensome thing US citizenship is. The green card is burden enough.
Blaze, this synopsis is superb! You’ve done a huge service by going to the trouble of summarizing all the points raised, in very clear and comprehensible language. I think this document is an excellent “primer” for anyone who has just had their OMG moment and doesn’t know what to think about. While it is not legal advice, it provides an excellent overview and for many people (notably those who committed a relinquishing act before 1986 and likely between then and June 2004, and have not done anything to rebut or refute that relinquishment since then) is really all they need to know. In my non-legal opinion, of course.
You’ve done a great service and are the principle jewel in the crown of our fight against FATCA, the IRS, the Americans, and our pathetic craven “Canadian” government and bankers.
And God Bless John Richardson for his sterling world-wide service to the “expat” “US person” community!
Thanks Schubert. I just summarized what John presented.
It has been almost two months since the London session was held and I have been working on the synopsis off and on since then amid other FATCA happenings.
John also reviewed it at various times and made corrections or revisions where necessary. As you know, John has been very active on many other projects and presentations, so that contributed to the delay, but John and I both wanted to ensure we conveyed accurate information.
Fantastic summary– thank you very much for the time and considerable effort you put into it!
Ditto the other comments. It is incredibly detailed and accurate; writing it as a narrative also makes it more interesting to read. You should post this on IBS if you haven’t already.
@Kermitzii: I haven’t posted this at Brock. If someone wants to post or cross post it, that’s OK with me.
This is a really excellent synopsis and I have cross-posted at Brock.
Thanks for this Lynne, I am sure many will benefit from it.
Very nice synopsis. I admit I was terribly curious about what happens in these seminars. I might go to the one in Munich but we;ll have to see..
Did anyone see Shovel’s comment on “What should Jake do?”
http://isaacbrocksociety.ca/2014/04/02/what-should-jake-do/#comments
He seems to think that the protection offered by the CRA and Canadian courts not collecting for IRS is not very useful because the extradition treaty as amended in1976 covers tax crimes?
I questioned this as follows:
“Has anyone got a confirmation or a refutation of Shovel’s statements on extradition? Could the refutation be that legal residents not paying taxes to the other country is not a crme in either country?
I mean, it is not a crime in the US for Canadian residents there not to file or pay taxes to Canada, and not a crime in Canada for American residents here not to pay taxes to the US.”
My friend was born in US and never lived there. She’s just graduated from the college and has started to work last year. Now she’s so scared that doesn’t even know if it’s safe for her to ask questions about this issue and quite confused all the information so far.
She is asked to fill the information if she is an US citizen in her office now. Her company’s head office is in US. She works in Canada. What would you suggest her to do? Should she just leave it blank or reply “yes”?
Wow Candy. That’s a tough one. I’m surprised an employer in Canada can ask if an employee is a U.S. citizen–even if the company is an American one. But, there’s been a whole lot of things I have been surprised about in the past year.
Is there room on the form where she could just write Canadian? Or could she write N/A?
Does she consider herself a US citizen? If not, I think she could honestly write in “No.” However, it is very likely her employer has a copy of her birth certificate. Most employers require this to confirm date of birth.
When did she become a Canadian citizen? Was she a Canadian at birth because one or both of her parents were Canadian? Or did she naturalize as a Canadian citizen?
If she naturalized as a minor, it might be difficult for her to claim relinquishment.
Because she is young, if she does not want US citizenship, it should be relatively straightforward for her to renounce her US citizenship. at the information session, John Richardson suggested young people who do not want US citizenship would be best to renounce before they begin to accumulate assets.
I would also encourage her to open credit union or bank accounts now when FIs are not asking for place of birth. They are not required to do so after FATCA is implemented, but that is very different from a requirement that they must not ask for place of birth.
Does anyone else have any other suggestions?
@ Blaze
I’m in awe! Your synopsis of the John Richardson seminar is a wonderful piece of work. This will be a handy reference work for a long time to come. Many thanks. You have a lot on your plate.
@MrMagoo: A lot on my plate must explain those extra eight pounds around my waist since all of this entered my life two years ago!
@Candy,
Blaze has covered the bases on your friend. Your friend needs to do some soul searching – does she want to be a US citizen? Does she think that she will ever want to live and work in the US? If yes, then she should research all that entails (such as filing US tax returns, understanding the complexity and costs of keeping up with yearly filing and the unfair burdens that the US tax system imposes on US citizens living outside the US compared to living in the US). If yes, then she could tick yes to the US citizen box on her employer’s form. Does she have a social security number? She will need one if she wants to be a US citizen. She will need to get a US passport to travel to the US. It is against US law to travel in and out of the US on a non-US passport for US citizens (even though at present border agents are letting dual Can-Am citizens get away this – this may change).
If no, then she should renounce her US citizenship immediately to get a CLN. She is lucky – she is young, just starting out in life, before accumulating significant financial assets. Mr. Richardson has called getting rid of toxic US citizenship one of the best investments a young person can make. Her tax consequences of renouncing now would likely be negligible, having been a student the last 5 years (even possibly being a minor less than 5 years ago). If she knows that she will renounce, then I would say no to being a US citizen on her employer form, even if they have a copy of her birth certificate.
My suggestions are based on the assumption that she is a Canadian citizen.
@Mr. A and @Blaze,
Thanks so much for your time to answer the questions and offer the suggestions. It’s very helpful to my friend. She’s in quite difficult situation. Since she works with a US company, as a matter of fact, it’s not easy to cut off all the relationship with US. She would need to consider the impact to her career. I really hope our government can help our young people just come out of school and get their precious job opportunity. It’s not fair for them to face these choices. And it’s really cruel to them to make the lifetime decision based on so confusing information within such limited time.
@Candy: This is certainly unfair and it sounds like your friend may be forced into making some very difficult decisions.
At the London Ontario session, John told of a 25 year old woman who went to the Montreal Consulate to renounce and they wouldn’t accept her renunciation. They said she was too young to make that decision.
They told me exactly the same when I became a Canadian citizen in 1973 when I was 22. The Consulate insisted I was too young to make a “permanent and irrevocable” decision like that. They insisted I would change my mind, but I would not be permitted to do so.
I have never once in 41 years changed my mind or even questioned my decision. Instead, it was the US that changed their mind about the whole thing.
I don’t envy your friend. She has some very tough decisions to make at a time when she should be able to fully focus on her career and future without worrying about the bully next door.
Yes Candy, it is very unfair what the US government is doing to people all over the world. Governments and times will change but the current situation is not good for people of US origin living outside the USA.
Our current Canadian government has made it quite clear that they are not on the side of Canadian citizens & residents of US origin. Their official line is that we are US citizens and that we must file US tax returns and FBARS (repeating the declarations of the Obama administration). Even if some members of the Conservative party secretly sympathize with the injustice of the US position, they cannot officially say so, to avoid contradicting and offending the US (and remember, Harper really wants a certain pipeline to be approved by Obama!)
I was in your friend’s position 25 years ago, and no one back then could have possibly envisioned today’s situation. If I had known then what I know now I would have renounced my US citizenship in a heartbeat.
I always knew that I wanted to live my life in Canada (I was born in the US but grew up in Canada and have never left Canada). People would tell me that my US birthplace was great opportunity if I ever wanted to live & work in the US, no need for a green card etc. I have never claimed or exercised any rights or benefits of US citizenship and I often wondered if I really was a true US citizen. I have only identified with being Canadian.
People are different and your friend may have different feelings about the US. However she needs to deeply examine American society. There are many serious concerns – the huge debt ($17.5 trillion at present and growing every minute), the gap between the wealthy and poor, the long and troubled history of race relations, the American gun culture and resultant gun violence, the complex problems of health care insurance, coverage and affordability etc. The US has many outstanding attributes such as world leading medicine, science, technology and academic institutions, a diversified economy etc. Remember that the great power and wealth of the US makes it more vulnerable to corruption among its leaders.
Your friend’s career opportunities with an American company are not necessarily compromised by her giving up US citizenship. Many Canadians have moved to the US in young adulthood for career opportunities and have done well (I personally know quite a few). Some of my classmates moved there more than 20 years ago, although I’m not sure that all of them realize that they are now also “US persons” (even if they have not become naturalized US citizens) and that they may face tax complications if they ever want to return to Canada one day.
A 25 year old being told that they are too young to renounce is just another unbelievable example of what the US is doing these days. If they don’t want people to renounce then they shouldn’t be trying to impose unjust taxation on them. US citizenship feels more like slavery these days.
Good luck to your friend. Complex situations like these often call for one to follow their “gut feeling”.
And Blaze, thank you again for all your hard work and leadership in this struggle.
Further to Candy’s post on April 4 regarding a friend who was asked to provide information if she is a US citizen, this may explain the reason for the question:
http://www.mnptax.ca/insights/blog/2014/2/28/unexpected-consequences-of-the-irs-hunt-for-us-tax-evaders
Yikes Hazy. That’s scary. Has anyone else heard of anyone being asked if they are a US citizen by their employer?
@ Candy….
In my mind it is an illegal question and should be answered N/A.
The question is unconstitutional.
Hi,
Just found out by accident yesterday that I may have to file US tax returns. Both my parents are Canadian, went to work in Canada in the 70’s, I was born in 1973 and moved back to Canada at age 1 in 1974. I have not lived in the US since the age of 1! Never earned money there, never had a US passport, and became a Canadian Citizen in my teens. I am confused and have no idea what my next steps are….