Monthly Archives: May 2015

C51 Gives CRA Right to Share Tax Info

Here we go again.
Under C51, (the Anti-Terrorism Act passed by the Cons and Libs), Canada Revenue Agency (CRA) has been given permission to share your income tax filings with 13 additional government agencies.
Money Sense reports Your tax info at heightened risk.
Money Sense is not exactly what one could call left wing civil liberties fanatics. Yet they report:

The CRA can now share not only your home address, but all of your financial information within the government, without any form of consent or a warrant.

All the CRA needs is to believe “there are reasonable grounds to suspect that the information would be relevant to an investigation of whether the activity of any person may constitute threats to the security of Canada.”
What’s more, the CRA can distribute these private details “on its own initiative,” possibly spurring…a “wide-scale fishing expedition.”

A Ryerson University professor says the more people that have access to taxpayer information under Bill C-51, the higher the risk of leaks, hacks and other foul play. He also says:

The change in legislation is “unprecedented. It’s snooping and meddling of the worst kind.”

Of course, CRA will have far more information about U.S. persons than they will about other Canadians because of FATCA. So the snooping and risk to us is mammoth.
Are we suspects of a “threat to the security of Canada?” Who knows?
I think we are defenders of Canada. But, I think it’s safe to assume the government is following Sandbox and Brock and that they consider us threats.
This is one more huge reason why we must persevere in our fight for our rights. Please keep those donations to ADCS coming.
Hmmm. Do they consider ADCS a “threat to the security of Canada” for standing up for the Charter of Rights and Freedoms?

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)’.
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

Criminals Use IRS Website to Steal Personal Data

Well, this certainly does not instil confidence that the IRS will handle FATCA data safely.
Criminals use IRS website to steal data on 104,000 people.
Yesterday, CNN reported:

A “sophisticated” organized crime syndicate used the IRS website to steal tax forms full of personal financial information on 104,000 taxpayers, the agency said Tuesday.

IRS TheftThe crooks weren’t as successful as they wanted to be. They only got about half of the 200,000 accounts they targeted. They used about 15,000 of them to claim tax refunds in other people’s names.

But the potential damage is worse. IRS Commissioner John Koskinen said he believes the criminals’ true mission was to gather vast amounts of personal information. Armed with that info, fraudsters can open bank accounts, credit lines and steal tax refunds in the future.
“This is just the latest manifestation of people getting enough data to masquerade as a taxpayer,” Koskinen said.

Now today CNN reports IRS believes the massive data theft originated in Russia.
This is exactly what we have been setting off alarm bells about. Why won’t Finance Canada or governments around the world listen?!? These thefts are with far less information than what will be provided with FATCA.
FBI is investigating.
“Congress must act,” says Senator Orrin Hatch. so, Congress will review how data was stolen. (but not till next week).
Here’s a better solution. Hire Edward Snowden to investigate. He’s hanging out in Russia now. Snowden cares far more about protecting private information than the IRS, US Treasury, US government or any other government around the world.
And what happens when the next data theft comes from Yemen, Syria or Iraq?

Reminder:"Solving US Citizenship Issues: Have You Received a FATCA Letter?"

toronto 31may15
The “FATCA Hunt” – the hunt for U.S. persons (whatever that is) began on July 1, 2014 which was “Canada Day”. Although both the definition of “U.S. person” and whether one meets the definition is not always clear, the search has begun. The level of FATCA awareness has begun. Some organizations are actively warning people that “U.S. Personness” matters. The purpose of the warning is presumably to encourage people to ”come clean” and deal with their U.S. tax situations. In some cases, there is no particular warning – just a letter indicating that they are suspected to be a “U.S. person”. Often one must prove to the institution sending the letter that one is not a U.S. person.
We have recently learned that no Canadians have yet been reported by the CRA to the IRS. This will not occur prior to September 15 and is required by September 30, 2015. You may wish to keep track of a suit trying to prevent this information from leaving Canada
WHO: John Richardson, B.A., LL.B., J.D., is a Toronto lawyer and a member of the Ontario Bar.
ADMISSION: $20 per individual or $40 for a family up to four. Payable in cash at the door.
Hope to see you, your families and friends! Spread the word!
Information presented is NOT intended or offered as legal or accounting advice specific to your situation.

Canadians' Choice Party Gets FATCA Implications

These are words we want to hear from a political party hoping to be elected:

The Canadian’s Choice Party (CCP) pledges to “rip up” Canada’s FATCA IGA and return Canada to Canadians. The FATCA IGA is immoral and undemocratic. It’s not in the interests of Canada and individual Canadians.

CCPUnfortunately, those words are not from the Cons, Libs, NDP or Greens. They are from Canadians’ Choice Party.
CCP is an Ontario provincial party that is hoping to register as a federal party.
I spoke with Bahman Yazdanfar, CCP’s founder and leader today. It was refreshing. He gets what FATCA means for us and for all of Canada.
Mr. Yazdanfar is not a “U.S. person.” He was born in Iran. He worries that what the “government is doing to our brothers and sisters from south of the border” has implications for all Canadians.
CCP asks:

“Which group of Canadians will be next?”

And what will the government do to them and their rights?
Mr. Yazdanfar told me when he attended FATCA meetings and saw “grown men and women in their 50s and 60s in tears,” he was reminded of time he spent in Afghanistan and what governments did there to citizens. He recognizes FATCA is not the government coming to people’s homes like in Afghanistan, but he fears FATCA and other government policies could be the tip of the iceberg.
About CCP, he says:

We don’t dictate policies.

Instead, Mr. Yazdanfar insists democracy should belong to the people–and not to political parties. So, he says CCP’s goal is elect “representatives of the people” who will listen to the people.
First, CCP must be registered as a federal political party. One of the things they need to do is have 250 eligible voters join the party and complete a declaration to Elections Canada. If you want the Canadians’ Choice Partyto become a Federally Registered Party, you can be one of the 250 original signers. Check it out at CCP.
John Richardson was a candidate for CCP in a provincial election but has no other formal involvement in the party.

FATCA British Church Bell Ringers

How crazy can all of this get?
British church bell ringers were FATCAed when opening a Church Bellsbank account in a British Co-operative Bank.
The bank demanded information not only on the 76 year old Treasurer but on every one of the 12 bell ringers.
The church bell ringing treasurer gets it.

“Just imagine the pile of confidential information sitting on someone’s desk if we had 1,000 members,” Mr Campbell said. “The request is so unrealistic, but to my amazement my complaint about this was rejected.
“We do not ask people for their age, let alone their birth date or bank details, when they ask to join the group. If we made it a condition of membership we would soon have no members. Also, most banks recognise identity theft as a growing problem. People shouldn’t be asked to give their exact birth date or bank details for no good reason.”

The Co-op does not get it.

“Like all banks, we have increased the checks we need to do when customers apply for an account.

FATCA Summary Trial Filing

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.

Making Citizenship-Based Taxation Reform Easy

Making Citizenship-Based Taxation Easy by Lynne Swanson in Tax Connections features the proposal by Shadow Raider which we previously posted as Brilliant Proposal for Elimination of CBT.
Heitor David Pinto wants to “make it easy” for Congress to move from citizenship-based taxation (CBT) to residence-based taxation (RBT).
Pinto thinks CBT is “absurd.” And he aims to help Congress change it.
“So Many Problems”:

CBT “creates so many problems for a lot of people for no good reason,” insists Pinto.

Connecting with Americans around the world through social networking, Pinto went to work. With no accounting or law background, the electrical engineer studied the massive IRS Tax Code and CBT history evenings and weekend. “It’s what I do in my spare time,” explains Pinto.

Pinto concludes there is no justification for CBT and makes concrete recommendations to “make it easy” for Congress to change to RBT.
Tax Connections adviised me they will include this in their “big blast” tomorrow of the top ten posts for the week. I sure hope someone in Congress sees it and listens.

Canadian FATCA IGA lawsuit: May 1, 2015 legal bill will be paid on time! / Poursuite canadienne contre la FATCA et le gouvernement canadien : nos frais légaux du 1er mai 2015 seront payés à temps !

Dear Supporters,
Many of you probably predicted that I would not be saying this today, but this message is not a dream: You came up with yet another $100,000 payment — now making a total of $400,000 provided to the Arvay team.
In the last twelve days you actually donated more than $40,000 — an amazing achievement for small donors. This accomplishment proves to all those people who want us to fail — that we are very determined.

You gave until it hurt and then you gave a lot more. It’s hard not to get teary-eyed over the generosity of our supporters, who have come through every time.

We know that the pace of your litigation is painfully slow, and this is unfortunately as expected. The Government will continue to do its best to slow down the process, but we now have the assistance of a case management judge to help keep the process moving more fairly.
We filed in August 2014 and it has taken a very long time (one year) before we are finally into a (summary) trial (August 4-5, 2015). We cannot predict the outcomes of this trial, based on only part of our arguments and, with your continued support, we will prepare for all possibilities.
[Happy birthday Gwen!]
Thank you for your trust,
Stephen Kish,
— on behalf of Plaintiffs Ginny and Gwen, their families, and the ADCS-ADSC Directors

Continue reading Canadian FATCA IGA lawsuit: May 1, 2015 legal bill will be paid on time! / Poursuite canadienne contre la FATCA et le gouvernement canadien : nos frais légaux du 1er mai 2015 seront payés à temps !