"Anybody Else Getting" The FATCA Call?

Telephone Call
Has anyone received the FATCA call from their bank, investment firm or other financial institution?
Johnnb posted the following under  What’s New, but it definitely needs its own thread:

In a previous post I described how my wife and I decided to get our (backdated to 1973) CLNs. We applied in January of 2012 and the CLNs arrived in July 2012. We promptly made copies and gave one to our financial advisor at Scotia McLeod.
Last week we got a phone call from our financial advisor saying we now had to provide our old US social security number (haven’t got a clue what they were) and fill out a W8-BEN. Told her we weren’t filling out any US IRS forms ever again.
She then informed me that she has been instructed to call every person on her client list and ask each and every one of them five questions:
Are you a US citizen?
Were you born in the US?
Did you reside in the US for more than 183 days last year?
Two others that I missed because she was going so fast.
She said she was amazed to find so many of her clients who had ties to the US!
Anybody else getting this type of call?

We’ve missed you Johnnb.  Good to see you back–but not with this information. Thanks for sharing.

36 thoughts on “"Anybody Else Getting" The FATCA Call?

  1. Well, since we’re trying to keep this blog clean, I can’t write my first thoughts when I read this. Dismay, followed by disappointment, and finally outrage when it hit home.

  2. OMG! My initial thoughts are also unprintable. Love that FATCA call post and picture. Somehow you know these calls are going to start coming. I didn’t get one yet. My ties with TD Bank and RBC have been severed…closed my accounts and went to the credit unions. My appointment to confirm relinquishment in 2008 and obtain back dated CLN is coming up in a few weeks. Not a moment too soon. A good reminder to protect ourselves from the US/IRS. I will be listening to John Richardson’s talk this evening on AMI.

  3. So much for Hannah’s pooh-poohing the IGA off as no big deal to Canadians as long as they have not opened any accounts with obvious ‘US indicia’. He gave the distinct impression that ‘Don’t ask, Don’t tell’ was going to be the modus operandus for Canadian banks in terms of identifying the ‘US persons’ in their midst.

  4. Lynne,wherever do you come up with those great illustrations?
    Of course, in Johnnb case, he can clear his indicia with his CLN.
    This matter has been brought up before and no one, to my recollection, has ever been able to come up with an good explanation for the type of questions that Johnnb was asked in the past.. There have been QI (Qualified Intermediary) rules in effect since around 2001, but not much attention appears to have been paid to them. Generally, under QI, a person would be given a W8-Ben to complete for the purposes of withholding tax on U.S. investments.
    The questions just asked are undoubtedly related to FATCA and certainly do give lie to the assurances of CBA.
    I will checking with several investment advisors from other firms,with whom I have discussed FATCA, to see if they have received FATCA instructions yet.

  5. I think it’s important we remember this call was from Scotia McLeod, which is the investment arm of Scotia Bank.
    For some reason, investment accounts are treated differently than bank accounts and many people have been asked the “US citizen” or “US person” question in the past on investment accounts even before FATCA. Like Hazy, I have never been able to understand why and no one has been able to explain it to me.
    This, however, goes far beyond being asked to complete a form. This was a telephone call specifically to ask a long time customer  the “US person“ questions. It is especially frightening that the call was from an organization that already had the CLN provided by the customer.
    I have no idea if this is the first step towards banks asking all their customers that question or if it just one investment firm.  Whatever it is, it’s alarming.  Hazy, I really appreciate you checking it out with others.
    Johnnb:  What was the response of the Financial Advisor when you said you would not complete any IRS forms

  6. @Lynne: I give her full marks. When I said I wasn’t going to fill out any IRS forms she said she’d get back to me and she did. Some stuff was moved to a TFSA and other stuff moved around and now no W8-BEN is required.
    Don’t think this will work for many others. We are approaching the time when we have to move RRSPs to RRIFs and other investments are minimal.

  7. No, I would say “full marks” if she came back and said that your CLN is sufficient and nothing else is required.

  8. Vanguard funds in USA now have their own electronic W-8 BEN (apparently you can’t send them a paper one!) and it asks whether a person has expatriated from the United States, which is not a question on the paper W-8 BEN. No idea what the follow up from Vanguard on a “yes” answer will be…..Theoretically, the next question will be whether the person is a “covered expatriate”.

  9. Johnnb:  Am I reading that correctly?  are you saying you moved some of your investments into other vehicles that did not require the W8?
    Why wasn’t the CLN satisfactory for resolving any issues–especially when you had previously given it to them?
    @Badger:  I didn’t realize it was cross-posted at Brock until you mentioned it.  Calgary411 did that.

  10. Lynn, it makes sense. US dividends paid to Canadians are subject to 15% withholding tax. This is nothing new or sinister. The broker needs a W8ben form to comply. The withholding rate is 28 % for someone who doesn’t supply a W8ben or a social security no.
    Accordingly, the broker is acting properly by asking you to fill out a W8ben.
    By switching out of US investments, a W8ben is no longer required. The account rep did however overstep a line when she asked place of birth.

  11. Yes, Lynne, that’s what she told me. I assume I’ll be getting some paperwork on the transfer shortly. I assume it was into something held entirely in Canada with no US connection.
    I asked her why the CLN wasn’t enough by itself and she said a) it was a directive from Toronto and b) Many Canadian citizens with no connection to the US are asked to fill out W8-Ben if the investments have the possibility of US withholding. Nothing to do with me in particular or other people with US ties.
    I have confirmed that with some of my Canadian only friends and they have been asked in years past to fill out the W8-BEN. I just wasn’t going to fill out any more US forms on general principles.

    1. What doesn’t sit well with me about the financial advisor’s explanation, is that although she said that requesting a W8-BEN had nothing to do with you in particular or other people with US ties, her request was prefaced with 5 questions about US ties.

  12. Thanks Lynne, Johnnb and everyone. This is good information about the W8-BEN and investments with the possibility of US withholding. There will likely be a lot of people, myself included, who wish to avoid US investments and filling out more US forms now due to FATCA. The financial boomerang may be coming back at the United States.

  13. @Duke:  It seems to me this goes way beyond the W8. It asked a series of “US person” questions,–including place of birth.
    It sounds like it wasn’t one lone investment advisor doing that. She told Johnnb it was a directive from Toronto to ask all clients those questions.
    Coming five weeks before July 1, does anyone think this is not FATCA related?

  14. If everyone who invests in US securities has to fill out a W8-BEN, that’s one thing – at least it’s not discrimination based on national origin.
    But the IGA (relevant text and link below) seems to say that even if a person is not a US citizen, if that person was born in the US, they still have to fill out a W8-BEN.
    National origin/place of birth is an immutable fact. If I am reading the IGA correctly (maybe I’m not), it means one could never totally escape the US and is blatant discrimination.
    EG: Take 3 Canadian citizens:
    (1) If a person is a US citizen, they have to fill out an IRS form (W-9).
    (2) If a person is NOT a US citizen, they don’t have to fill out an IRS form
    (3) If a person is NOT a US citizen but was born in then US, they have to fill an IRS form (W8-BEN). The IGA doesn’t say anything about if the person has US investments or not. Just that they have to fill out a W8-BEN.
    I note that the IGA (relevant text below) says “may be on an IRS Form W-8BEN or other similar agreed form.” So what does “may be” mean and who agrees on the form? The bank and the customer? I’d presume the bank is likely to be of the “my way or the doorway” approach when it comes to “agreeing.” Perhaps not necessarily “the doorway” literally, that they’d close the account, but would forward the account information to CRA (to forward to IRS) as a recalcitrant account holder.
    Also does the IGA mean that s. (1) is stand-alone, and that only s.(2) and s. (3) are combined? Or must all 3 criteria be met? The placement of the “and” after s. (2) but not after s. (1) is a bit ambiguous. As the conjunction “and” is used in the English language, either interpretation could make sense – but there’s no “or” between s. (1) and s. (2).
    At any rate, it sounds like Scotia-MacLeod is combining all three criteria.
    This is from Page 21, (B)(4)(a) of the IGA
    “Where the Account Holder information unambiguously indicates a U.S. place of birth, the Reporting Canadian Financial Institution obtains, or has previously reviewed and maintains a record of:
    (1) A self-certification that the Account Holder is neither a
    U.S. citizen nor a U.S. resident for tax purposes (which
    may be on an IRS Form W-8 or other similar agreed form);
    A non-U.S. passport or other government-issued identification evidencing the Account Holder’s citizenship or nationality in a country other than the United States; and
    A copy of the Account Holder’s Certificate of Loss of Nationality of the United States or a reasonable explanation of
    (a) The reason the Account Holder does not have such a certificate despite relinquishing US citizenship; or
    (b) The reason the Account Holder did not obtain U.S. citizenship at birth.”

  15. It may become standard operating procedure for some FIs to have everyone fill out some sort of W8 form, whether or not there are U.S. indicia and/or investments. Or, self-certification might be buried in an account agreement as HSBC appears to be doing.
    One can expect variation from FI to FI and most certainly, confusion by
    “on-board” personnel about the new requirements.

  16. I have no idea how to interpret all of that.   I have now concluded  Roy’s Berg’s mugging example is the best word I have seen used to describe FATCA.
    Ambassador Jacobsen said the US wasn’t after Canadian Grandmas.  Actually, Canadian Graandmas and Grandpas are exactly who the FATCA muggers want. We are in the early stages or near retirement. That means we have the most assets we are ever likely to have. The mugger may think we are easy prey, but we aren’t

  17. @Blaze, In the UK certain High Street Banks have been asking extremely intrusive questions to open an account. This applies to both their banking and brokerage arms.
    Another certain High Street Discount Brokerage is asking a series of very intrusive questions to existing account holders if you call them for any reason.
    Questions almost identical to what is reported in Canada.

  18. So the questioning begins. I still think it is outrageous that anyone would have their banking information shared across borders based upon where they were born.
    I haven’t got a call from Scotiabank on this yet but, my advisor there knows I was a U.S. person and that I am no longer. However, I think I’d almost rather she call me so I know what is going on directly from them with my account. How is anyone supposed to know if they have been reported to CRA really? When you get down to it some minimum wage worker at a bank could red flag you over something innocent such as a birthday check that came from the U.S. Do they have to inform anyone before they give away your banking data?

  19. cross-posted from IBS:
    @all –
    I understand tempers are (justifiably!) running high, but I’d like to clarify something about the W8-BEN:
    This is not actually a form sent to the IRS. It’s a form for the bank to keep, and what I would call a “cover-your-a$$” form. Basically you state that you aren’t a “US person” so if the IRS comes along later and finds you are, they can say “Well, he lied, it’s not our fault.”
    This form has been around longer than FATCA – it was part of the standard account opening documentation at least in 2009 when I started working at a bank, and I don’t have it in front of me but I think we were using the 2006 or 2007 version. We worked with high net worth clients and pre-FATCA the purpose of the W8-BEN was in reference to investment in US bonds etc.
    We had many (most, actually) clients without a trace of “US personhood”, and believe me anyone who was able to sign that form did so happily – the US people had to sign a W-9, which does take your SSN and link you up with the Powers That Be back in the old country.
    If someone would sign a W8-BEN AND have a US place of birth, the bank would ask for a CLN. We did have some unfortunate souls who had their OMG moment as they had no idea they were US citizens until that point….. 🙁
    So basically this form is actually what you DO want to tell the bank – that you are NOT a “US person” for tax purposes. To be backed up with a CLN if necessary.
    Hope that helps.

    1. @ Shunrata,
      (1) Re:
      “the US people had to sign a W-9, which does take your SSN and link you up with the Powers That Be back in the old country.”
      The W8-BEN also has a box for the person’s SSN and the proposed enabling legislation in Canada (if I’m reading the proposed enabling legislation correctly, Bill C-31, s. 100 (1)(6)(a)
      ) will enable a fine for not providing it.
      I understand that the W8-BEN is not sent on to IRS. Nevertheless, if all US born persons are automatically required to fill one out, but non-US born persons are not automatically required to fill one out, I’m still opposed to it because it’s national origin discrimination.
      (2) Re:
      “If someone would sign a W8-BEN AND have a US place of birth, the bank would ask for a CLN.”
      That is interesting that Australian banks were asking for place of birth as early as 2009. Definitely pre-FATCA. Actually I may have got that wrong. You said that the FFI in Australia was asking for W8-BENs at least as early as 2009. but not specifically that they were asking for place of birth at that time.
      (3) Re:
      “So basically this form is actually what you DO want to tell the bank – that you are NOT a “US person” for tax purposes. To be backed up with a CLN if necessary.”
      I have no problem telling anyone I’m not a “US person.” I have a problem with having separate procedures for people based solely on where they were born. That is if people with an “unambiguous US place of birth” must fill out a US govt form, even if they are not a citizen of the US, for the sole reason that they were born there. Although my neighbours and fellow citizens born in Toronto, Copenhagen or Delhi do not.
      (4) I hope you don’t think I’m dumping on you. I really do appreciate you’re sharing your banking background. I’m just in a bad mood tonight. 🙁 🙂

  20. @Shuanatra:  Thank you.  However, Johnnb had ALREADY provided his CLN. Plus, the questions asked go way beyond what is required for a W8BEN.  She said she had a directive from Toronto to call and ask ALL of her clients those questions but wasn’t able to explain why.
    If the W8BEN is standard practice (which I believe it is for investment accounts), why would they suddenly be calling all their clients and asking questions that go beyond what is required for a form already completed?
    I have no idea if banks and other investment firms will do the same.
    To the best of my knowledge, this is the first time people have received phone calls of this nature.  For it to happen just a little over a month before July 1 is alarming.

  21. It doesn’t particularly surprise me that a Canadian FI is going to ask these questions of someone who has already provided or shown a copy of a CLN to one of their staff, because probably that meant some sort of annotation on the client’s file which would be a US indicia. And in that case, to cover their a$$es, I can well understand the FI’s staff wanted to follow the rules to the letter (setting aside for the moment that the rules aren’t law yet) and get a W8 form which (absent amendments in Parliament) are going to be required for account holders with US indicia but a CLN, to accompany the CLN.
    BUT for an FI to be asking these questions of every single account holder in Canada, US indicia or not, is IMO over the top. It also is quite contrary to what the spokesperson for the Canadian Bankers Association very clearly stated before the House of Commons Finance Committee on May 14, in response to a question from a committee member, that if a record search doesn’t unearth US indicia on a client, that would be the end of the matter from the bank’s standpoint, at least for existing accounts. (New accounts are a whole different kettle of fish, I suspect.) Also, this is Scotiabank’s investment arm and not the bank itself, and CBA represents banks not investment arms (strictly speaking), moreover CBA is a lobby organization and doesn’t control the internal policies of any individual member bank AFAIK or suspect.
    All the same, this is very alarming and intrusive. And, as Pacifica says, clearly discriminatory on the basis of national origin (viz. Section 15 of the Charter of Rights and Freedoms). Do we hear the distant thunder of a gathering charter-challenge storm?

  22. I did some checking around with investment advisors at full service brokerages.
    Contrary to what Johnnb was told, I was informed that Scotia MacLeod was not systematically calling their clients and asking the questions Johnnb was asked. However, IAs have been requested to ask about U,S, citizenship on their next routine contact with clients. Scotia MacLeod is supposedly not sending out W8-Ben forms to all clients.
    From RBC, I heard from several sources that there has been no request to ask clients about citizenship, although there is a question on the account opening form. The belief is that this question has been there under the existing QI rules for some time. One IA told me that known snowbirds were being asked about the time spent in the U.S. to make sure they didn’t exceed the substantial presence test.
    RBC did send out W8-Ben forms to all clients last year, whether or not they had U.S. investments.
    As an aside, last Fall I opened a Scotia ITRADE discount brokerage account. There was an odd question on the application just after the request for mailing address. The question was ” Resident of Country since (year)”.
    I had not seen that question on any other FI application.
    In the past, I have seen a question about how long have you been at the present address, especially on credit card applications.

  23. Clearly, it is way over the top to ask these questions of every Canadian account holder.
    However, the only way asking these questions to any one segment of persons is not discriminatory is to ask them to every Canadian account holder.
    Audacity and the absurdity and common sense out the window to protect the FFI asses (institutional and individual).

  24. I know of brokers who are turning a blind eye to the whole thing.
    I think these folks should be looking for some alternatives to Scotia McLeod.

  25. It will be a frosty day in hell before I would cooperate.
    I would answer N/A. In any case, my broker has told me that he knows nothing about my birthplace, and won’t ask. He tells me that many brokers are just turning a blind eye.

  26. @All
    There is a possible story coming up in wsj next week and they are looking for anyone who has been queried by a financial institution; a short quote or two about what FATCA means to them and willingness to use name. No details about dollar amounts, etc. If anyone is willing to do this, pls email me at
    us.expatcanada at gmail dot com

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