“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,”
http://www.irs.gov/uac/Newsroom/IRS-Makes-Changes-to-Offshore-Programs;-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 →

 
Cross posted at ADCSovereignty
Here is the actual Order for denying the injunction:
ORDER
Our commentary will follow but here are the reasons provided by the Court for denying the injunction request:
REASONS FOR ORDER
RENNIE J.A.
[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”
J.A.

 
cross-posted from the ADCSovereignty Blog
 
ADCS_ReqMinFind_b_SEP_21_2015 (1)

In our September 18 ADCS blog post we advised you that, for whatever reason, the United States Department of Treasury will now permit a one year extension, to September 30, 2016, to turn over private bank account information to the U.S. Internal Revenue Service, to comply with the U.S. FATCA law. However, the affected country HAS TO ASK FOR THE EXTENSION.
On September 18 we said on the blog:

“Well, it’s been quite a week. At approximately 4:45 p.m. today the IRS issued a notice confirming that the FATCA implementation date will be extended to September 30, 2016. As you know Canada has a Model 1 IGA. Assuming the correctness of the post in the above tweet:
Model 1 IGA Jurisdictions for Which the Obligation to Exchange Is In Effect — For those Model 1 IGA jurisdictions where the obligation to exchange is in effect now, Notice 2015-66 provides that FFIs in that country will be treated as FATCA compliant, and not subject to withholding, so long as the partner jurisdiction notifies the U.S. before September 30 that it requires more time, and “provides assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible.” Notice 2015-66 does not, however, change the deadline for FFIs to report information to their local tax authority, which remains governed by law of that country.”

We therefore instructed our legal counsel to notify the Government of Canada (and they have) of this development and request that the Government of Canada NOT disclose your banking information to the IRS.
— Today, September 21, we posted a new ADCS blog in which we specifically asked Canada’s Minister of National Revenue, Kerry-Lynne Findlay, a defendant in our lawsuit, to apply for the extension before September 23, the date the private account information is due to be sent to the U.S. IRS.
We said:

September 21, 2015
The Honorable Kerry-Lynne Findlay,
Minister of National Revenue
House of Commons
Dear Minister Findlay,
We have an urgent time-sensitive request regarding our litigation in which you are a defendant, which we believe will be helpful to both plaintiffs and Government defendants, but which needs to be acted on no later than by end of business day September 22, 2015.
We are the chair and co-chair (and legal counsel) of the Alliance for the Defence of Canadian Sovereignty. We are the non-profit organization which is prosecuting the FATCA lawsuit against the Government of Canada. The lawsuit is “live”, “well” and expected to move to full trial in 2016. We are at: http://www.adcs.adsc.ca.
By way of background:
1. On February 5, 2014 the Government of Canada entered into a “Model 1” IGA agreement concerning the imposition of the U.S. FATCA (“Foreign Account Tax Compliance Act”) law in Canada.
2. On June 19, 2014 the Government of Canada enacted the FATCA enabling legislation through Bill C-31.
3. On July 1, 2014 FATCA became the law of Canada. The IGA required that Canada (via the CRA) report the banking information of those defined by the U.S. to be U.S. Persons to the IRS
4. The FATCA IGA required that the information be reported no later than September 30, 2015.
5. The Government of Canada has indicated to our legal counsel that it intends to report the banking information of those identified as “U.S. persons” to the IRS on September 23, 2015.
On the afternoon of Friday, September 18, the U.S. Internal Revenue Service issued Notice 2015-66, pursuant to which the deadline for the turnover of FATCA data (for countries with a Model 1 IGA agreement) has been extended for one year. Countries with a Model 1 IGA (including Canada) are no longer required to report to the IRS by September 30, 2015. It is required that Model 1 countries request this extension from the IRS.
See:
IRS extends FATCA Compliance Date for one year to September 30, 2016
http://www.irs.gov/pub/irs-drop/n-15-66.pdf
REQUEST:
In light of the large number of Canadian citizens potentially affected AND in view of the fact that the Government of Canada and the Minister of National Revenue are defendants in the Deegan and Hillis lawsuit AND in view of the fact that the Government is NO longer required to transfer the FATCA data to the IRS we request:
That the Government of Canada apply for the extension, no later than by end of business day September 22, to NOT transfer the data with a view to meeting a September 30, 2015 deadline that is NO longer required.
Clearly, the Government of Canada, irrespective of its FATCA obligations to the United States, has the opportunity to not transfer the private banking information of innocent Canadian citizens to the United States Internal Revenue Service.
Your action in requesting the permitted delay in the transfer would be significant for both plaintiffs and defendants as we move down the litigation road.
Should you need more information I ask that you contact Mr. John Richardson our legal counsel and co-chair.
Sincerely,
Dr. Stephen Kish, Chair, Alliance for the Defence of Canadian Sovereignty
John Richardson, Co-Chair and Legal Counsel
cc:
Andrew Treusch, CRA
John Ossowski, CRA
Kevin Shoom
The Honourable Joseph Oliver

cross posted from the ADCSovereignty WordPress Blog

ADCS PR pdf file: ADCS PR 19SEP15c pdf
ADCS PR png file: ADCS PR 19SEP15 png
 
I am working on this post as I post it and it will be constantly updated. Please act ASAP!
We want to get this blasted all over the world in the next 3 days. Every US Person abroad needs to put the same pressure on their own governments TO STOP THESE TRANSFERS FROM TAKING PLACE as all Model 1 IGA’s require turnover of information by September 30. Each government has TO ACTUALLY REQUEST THIS EXTENSION FROM THE IRS, so members need to take responsibility for making sure their respective tax authority/government does so. A widget on this post will show any tweets using the hashtag #StopFatca so all can see which countries the message is being spread from.
For Twitter:
Please use this hashtag: #StopFatca.
Please use RT on every Tweet
You can use this shortened link in order to get more info, hastags, etc into the tweet: http://bit.ly/1WaBY1i
Please,if you already have followers who are not expats but may be sympathetic, share other political issues, please send them the tweet directly with the RT; don’t assume they will see it in their feed just because they follow you. Creating a network with other users is important in order to utilyze social media to the max.
Sample Tweets to individuals; Notice you can simply copy/paste these (the plain text just below this paragraph and directly above the picture of the tweet) directly:
CDN govt 2 turn over 1million+ of ur fellow CDNs 2 IRS
Let them know u won’t tolerate this #StopFatca RT http://bit.ly/1WaBY1i

CDN govt 2 turn over 1million+ of ur fellow CDNs 2 IRS Let them know u won’t tolerate this #StopFatca RT http://t.co/8nxDN1vwaj

— Patricia Moon (@nobledreamer16) September 19, 2015

//platform.twitter.com/widgets.js
Continue reading The #StopFatca Press Release and Social Media Page →

 
cross posted from the ADCSovereignty Blog

FATCA Update: Treasury Relaxes September 30 Deadline for Model 1 IGA Jurisdictions to Exchange Ta… http://t.co/wocIyAGoPr via @BlankRomeLLP

— John Richardson – lawyer for "U.S. persons" abroad (@ExpatriationLaw) September 19, 2015

Well, it’s been quite a week. At approximately 4:45 p.m. today the IRS issued a notice confirming that the FATCA implementation date will be extended to September 30, 2016. As you know Canada has a Model 1 IGA. Assuming the correctness of the post in the above tweet:

Model 1 IGA Jurisdictions for Which the Obligation to Exchange Is In Effect
For those Model 1 IGA jurisdictions where the obligation to exchange is in effect now, Notice 2015-66 provides that FFIs in that country will be treated as FATCA compliant, and not subject to withholding, so long as the partner jurisdiction notifies the U.S. before September 30 that it requires more time, and “provides assurance that the jurisdiction is making good faith efforts to exchange the information as soon as possible.” Notice 2015-66 does not, however, change the deadline for FFIs to report information to their local tax authority, which remains governed by law of that country.

We have instructed our legal counsel to notify the Government of Canada (and they have) of this development and request that the Government of Canada NOT disclose your banking information to the IRS.
It’s been quite a week. We will keep you posted.
 
John Richardson
 
 

 
UPDATE:
Please go to these articles about the lawsuit and comment:
Financial Post
Globe & Mail
 
cross posted from the ADCSovereignty WordPress blog
 
Part 1: Justice Martineau provides @ADCSovereignty the only thing worse than a root canal

 
I  left my root canal appointment this afternoon to a message announcing that Justice Martineau had rendered his decision. We did not win round 1. Notice that I did NOT say that the Government won round 1.
Here is the decision:
T-1736-14 decision sept-16-2015
Before, I comment specifically on the decision, I want to be clear on the following points:

1. This decision marks the end of the beginning. It has always been clear that this litigation would NOT stop at the first level of trial.
2. The “summary trial” on the Tax Treaty issues was a “carve out” of the main Charter issues.
3. Obviously we continue on.

I am not surprised by the result – that is a “win” or a “loss”. What I am surprised at is the content of the decision (which I will get to in a moment).
But first some general thoughts/feelings/comments …
A. As you know, the CRA has announced that it will be sending the results of “FATCA Hunt” to the IRS on September 23, 2015.
This is hardly a surprise, given that Canada, has been and continues (under the Harper Government) to be a “World Leader” in FATCA implementation. Obviously this is  a great disappointment. My guess is that it will be a long time before there are any specific results (meaning letters from the IRS) from this.
This is the beginning of a long struggle. Remember, this is a “marathon” and NOT a sprint. Concern is appropriate. Panic is not. Justice Martineau’s decision does reinforce the principle that the Treaty does NOT obligate the Canada Revenue Agency to assist the IRS in collecting tax on Canadian citizens. Do NOT do anything that is reckless and is a reaction to this decision (as opposed to a response). You will be subject to a good deal of “fear mongering” from various people (accountants, lawyers, bankers …). You should deal with this situation “one FATCA letter at a time”. Remember that a “FATCA Letter” is a letter that indicates that you are under “suspicion of being a U.S citizen”. It does not mean that you are a U.S. citizen.
The only difference between today and yesterday is that Justice Martineau has ruled against us – clearing the way for the next step.
In any case, Justice Martineau has “cleared the way” for the CRA to send your account information to the IRS. This is not good news.
B. It’s important to see this decision as an event that brings us one step closer to moving this issue through the courts.
For those of you who see the result as failure (and I don’t) I remind you that every failure brings us one step closer to our next success.
 
As George said over at Brock:

“Ladies and gentlemen, we go back to work and keep moving forward.”

I believe that it will end at the Supreme Court of Canada. The jurisdiction of the Supreme Court of Canada is “public importance”.
Interestingly Justice Martineau did NOT make a “costs award” against Gwen and Ginny. He wrote (p 44):
 

“There shall be no costs. This is a case where, in view of the nature of the issues and the public interest involved in clarifying the scope of novel provisions affecting hundreds of thousands of Canadian citizens, no costs should be awarded against the losing parties.”

It strikes me that this is a recognition of the “public importance” of the issues involved, confirming that this is a case that should eventually be heard by the Supreme Court of Canada.
C. Thoughts on Justice Martineau’s decision …
Full disclosure – I read the decision very very quickly. It is 46 pages. I will read it again later, much later. There doesn’t seem to much substance to the decision. A huge part of the decision simply recites the terms of the IGA and the implementing legislation.
Basically, what Justice Martineau says is:
– the IGA was of great benefit to the banks and was supported by the banks (p 21)
– “Congress has spoken” (have you heard that before): Meaning this is a political decision in the United States
– The Government of Canada has the right to make and interpret tax treaties that involve “information exchange”. In this context, it is NOT for the Government of Canada to question the relevance of the information to the enforcement of U.S. tax laws in Canada. Treaties are about giving the treaty partner country information that they want (p 43)
– Whether the IGA is a Treaty or not is irrelevant (from a Canadian perspective) . Either way it is consistent with and within the purview of what is allowed by the Canada U.S. Tax Treaty (p 29)
– If you are a dual citizen, too bad. That’s simply the price of U.S. citizenship or dual citizenship (he doesn’t seem to get that citizenship is being forcibly imposed on people who  believe that they relinquished U.S. citizenship years ago)(p 44)
– Justice Martineau adopts the distinction between the “assessment of taxes and penalties” and the “disclosure of information”. In other words, he rejects the submission that the Government of Canada is assisting the U.S. to collect tax on Canadian citizens. (p 42)
I would imagine that many, many expats will disagree with this last point, as Dash said:

I think Justice Martineau’s ruling boils down to the following:
“Accordingly, in the absence of concrete evidence, it is speculative to suggest that the automatic collection and disclosure of taxpayer information mentioned in the IGA is tantamount to providing help to the US authorities in the collection of taxes.”
This is where I strongly disagree with Justice Martineau. Collecting information about someone’s assets (not just income) can serve no purpose other than to assist in collecting taxes.

 
What this means …
In the world of FATCA, IGAs, and tax treaties the rights of individuals (if they have any) are subordinated to the broader purposes of the information exchange. Justice Martinueau says: “Just renounce” (have you heard that before)? -(p 27)
On the one hand Justice Martineau’s decision may be consistent with the interpretation of  the Tax Treaty.
On the other hand Justice Martineau’s decision makes it clear that individual rights are irrelevant to Tax Treaty interpretation.
The Charter of Rights, on the other hand,  is about the recognition and protection of individual rights. It strikes me that the lack of concern for individual rights in Justice Martineau’s decision (whether correct as a matter of law or not) may strengthen the validity of the Charter of Rights claims.
In closing …
This post is a quick message to supporters. I want to emphasize how much we at the Alliance For The Defence of Canadian Sovereignty value your support and thank you for it! I repeat we thank you. This lawsuit has been and continues to be about you.
I will reread the decision and update this post later this evening or early tomorrow.
John Richardson
P.S. Canada is the country most affected by FATCA and the country with the “moral authority” to resist FATCA. The Harper Government could have chosen to be the “FATCA Terminator”. Instead it decided to establish itself as a “World Leader In FATCA Implementation”. This is further evidence of the Government of Canada behaving as “managers” instead of as “leaders”.
On October 19, 2015 you might remind Prime Minister Harper how you feel about his surrendering Canada’s sovereignty to the IRS.

Analysis – @ADCSovereignty #CdnFATCATrial – @RoyBerg1: “practitioners anxiously await the court’s decision” https://t.co/nIKMXUUxa2

— ADCSovereignty (@ADCSovereignty) August 25, 2015

 
Stephen Kish has obtained permission from Tax Notes International to reproduce an article by Roy Berg to be posted (only there and only once) at the Alliance for the Defence of Canadian Sovereignty WordPress blog. The article is an interesting analysis of some main points regarding the Summary Trial which took place in Vancouver August 4-5, 2015.  John Richardson has taken that article, comments from the recent BNA article (linked below) and his own experience at the trial and examined how he sees the interaction. I am providing some main excerpts which will hopefully give a sense of what is involved and make you curious enough to go over and read the the article and the post.
 

On August 20, 2015,  BNA published an article on the Alliance For The Defence of Canadian Sovereignty that took place earlier this month. The article was posted by Stephen Kish at the Isaac Brock Society. As expected the article generated a large number of comments. The BNA article included the thoughts (and only the thoughts) of a number of Canadian tax practitioners.
Early Brock commentary on the Vancouver trial noted the presence the of lawyers from Moodys Gartner. The BNA article included commentary from  Moodys lawyer Roy Berg. In an article published on August 24 by Tax Notes, Mr. Berg expands on his views of the issues raised in the Vancouver trial.
A “report” on Mr. Berg’s Report …
The article, which is really a “report” of the trial, attempts three things:
First – to identify the issues raised in the Vancouver Trial
Second – to distinguish the issues raised in the Vancouver trial from the issues that are likely to be raised in the “full Charter trial”
Third – to provide his own commentary on how the issues should be resolved.

 
Having sat throught the Summary Trial, I can guarantee that trying to be clear about the issues raised, is/was not easy. What was really difficult was realizing that the interplay of the Treaty, the IGA, Canadian law, US law etc., does not end up with a nice and neat, clear answer. Determining how to weigh it all out seems to me, impossible to do (objectively). I suppose primarily because, in spite of the Treaty, one would naturally expect that in Canada, Canadian law should have precedence. The issues concern for the most part, Canadian citizens and Canadian residents, regardless of their US status. Their relationship to the United States should be a secondary one. All other nations of the world seem to understand this principle. The aberration here is as we all know, citizenship-based taxation. Why any country would sign a treaty with the US with the inevitable savings clause is truly mystifying. What does the other country gain by agreeing to such a thing? NOTHING! That, along with that annoying “tax treaty override” tendency, (say it now, U-S-A, I-G-A! U-S-A, I-G-A!) certainly suggests expecting the US to honor what is signed in a reasonable way is just plain naive and or stupid. That’s why they need the 30% sanction. Kinda like they have to have the IGA because what they are doing is not in the Treaty….A never-ending loop……
 

I encourage you to read his article. There are two areas that I found to be of interest.
We all know that Justice Martineaus’s decision will be appealed. If the plaintiffs win, this means that the Court has ruled that the information cannot be transferred to either the CRA or the IRS.

 
In his article, Mr. Berg suggets should the plaintiffs win, the defendants will likely appeal with the appeal and trial on the Canadian constitutional issues being heard later this year or by early next year. Whether or not the win would prevent the IGA entering into force is unknown. If so, it would be likely that the U.S. Treasury or the competent authorities would be likely to intervene in order to prevent such a result.
 

Imagine, the Obama’s U.S. Treasury “intervening” in a Canadian court to attempt to enforce the right of the U.S. to extract information from Canadian citizen/residents! What a spectacle that would be

 
I cannot follow how the United States would be permitted to intervene in a Canadian court proceding. As if the extraterritoriality of the entire issue is not enough, we must then endure their interference in our own judicial system? At what point do we as a separate nation, have the right to chart our own direction based upon our own best interests? I can feel your blood rising already….
 

Second, Mr. Berg’s analysis of the distinction between “assessable penalties” and other kinds of penalties. This is interesting and is an argument that is helpful to the plaintiffs.

 
This is perhaps, the most fascinating aspect of the article. If I understand correctly, should the IRS apply information reporting penalties, the plaintiffs would not have access to IRS Appeals nor the US Tax Court. The net result would be that having given the IRS the information resulting in assessment of penalties, Canada would have provided assistance in collection. The late Finance Minister, Jim Flaherty repeated this over and over and over; that Canada would not provide assistance toward the collection of FBAR penalties. And why? Because it is not in the Treaty! Does this also include other non-tax, information reporting forms penalties? I am far too tired to attempt another try at the Treaty right now but it sounds like it might.
 

Conclusion …
The “Alliance For The Defence of Canadian Sovereignty” and the STOP FATCA movement have had difficulty (so far) in generating media coverage. Mr. Berg’s commentary is an important part of the process in raising awareness of these issues. In addition, the content of the  commentary in his article was (in my opinion) fair, balanced and a welcome addition to the “FATCA debate”.

 
 
I am sure all will have plenty to say. Look forward to hearing it!
 
 

cross posted from ADCSovereignty WordPress Blog

With such an amazing group, it’s simply NOT possible to NOT succeed! Thanks from @ADCSovereignty https://t.co/qm23ib8Ah1

— ADCSovereignty (@ADCSovereignty) August 18, 2015

 
This afternoon I received news that the Alliance For The Defence of Canadian Sovereignty had  met its $500,000 funding goal. I had two simultaneous/thoughts or reactions.
My first thought was that I was always completely confident that we would achieve our funding goals. You would never allow us to fail. (Ask Stephen. I have never for a moment doubted the funding!)
My second thought was a feeling of amazement. Did we really do this? It’s simply amazing!
Q. How could I both be so confident of our success and amazed by that very success?
A. These seemingly irreconcilable thoughts are easily reconciled because:

It’s obvious that we would achieve our funding goals because we were working with  such an amazing group of people!

It’s also important to recognize the important role played by both the Isaac Brock Society and Maple Sandbox for allowing us to publicize our FATCA lawsuit on their respective blogs. I offer a special thanks to Peter Dunn of the Isaac Brock Society and Lynne Swanson of the Maple Sandbox blogs. Without their generosity and support it would have much much harder to have reached this milestone.
Continue reading With such an amazing group, it's simply NOT possible to NOT succeed! Thanks from @ADCSovereignty →

Presidential Commission Sought on U.S. Expatriates http://t.co/QBnjNJKe Finally the Democrats and Obama are seeing the light.

— Marcio V Pinheiro (@marciovp) July 31, 2012

@FATCA_Bloback I trust that before the election President Obama will address the concerns of Americans Abroad. He is a just man!

— Marcio V Pinheiro (@marciovp) June 14, 2012

President Obama is a just man. He will be re-elected. He will correct the injustices being committed against Americans Abroad.

— Marcio V Pinheiro (@marciovp) June 16, 2012

 
Marcio de Vasconcellos Pinheiro was a long-time Brocker, known primarily as “markpinetree” and also as “ThatIsMe” and “Still American.” He died on Friday night after a long struggle with cardiac disease. He was 82 years old.
He was a very kind and gentle man who suffered greatly from a feeling of betrayal from a country he chose to embrace and become a citizen of. He was a medical doctor by profession having come to the US from Brazil in 1958 for his internship and residency in psychiatry. He chose to become a dual citizen in 1967. He was very proud of his two daughters, son and granddaughter living in the US. He worried about his health and what would happen to his wife should he continue to become worse. He also was afraid to even consider renouncing, in spite of the ill effects this situation had on him, because he feared it could affect the situation of his family in the US.
 
Clearly at the mercy of tax professionals, (or IOW, clearly mislead into entering OVDI), he mentioned $300 per hour lawyer fees and he ended up paying 27.5% of his life savings. Unbelievably, he had a letter from the IRS indicating that his best course of action would be to renounce his US citizenship.
 
This was what he emailed to me to include as his personal submission to the SFC:
“I became a dual citizen in 1967. I loved the USA. Lives and worked there for thirty years. I am grateful for the way they received end treated me. I came back to my country of origin and continue to pay my income tax to the IRS. Since a few years ago I don´t believe what I am going through, I feel that I am treated very unfairly by the USA for the first time in my life. I am in failing health and I am spending sleepless nights afraid of losing my small life savings. I have to comply now with so many forms and information that it is always difficult to know if I am doing it right. I can not prove this but I suspect that my health is deteriorating because of this. I never expected one day to me in this predictament, of the USA being unfair to me.
Please so no publish my name.”
 
He seemed to enjoy and respect Robert Woods’ columns on Forbes and put many comments over the years. Here are a few of them, all of which demonstrate how proud he was to be American, how he valued what the US stood for and yet, how horrid the effects of being so were on his last years of life. I have a lot of his comments as a result of including them in the Senate Finance Committee submission since his were expressed so simply and with such heartache.
 

ThatIsMe
Mr. Wood, again thank you. I lived and worked in the USA for thirty years. In 1967 I was proud to become an US citizen. I am now back in my original country, with a failing health afraid to lose my small life savings in sleepless nights for the past many years. I never thought that this would be happening to me in my very old age. I cannot believe that this is happening in a Country supposed to be fair where there is no taxation without representation. Too late!

ThatIsMe
Mr. Wood. I don´t miss one of your articles. For the simple reason that they make sense. This is what the USA Government should be doing insofar as Americans, Dual Citizens and Green Carders living abroad. How come you can see things so clearly and the USA insists in going after innocent American citizens living and working abroad. Do they think that these Americans, who have no representation or even a voice, com be trapped and milked to help pay for the American debt? Let me confess that I have been a democrat all my life and up to recently I have supported in many ways President Obama. But against my best wishes I will no longer do it because I can´t believe what is being done to us. Is this the America that I was so proud of becoming a citizen?

ThatIsMe
Mr. Wood. Again, congratulations and thank you. What you describe is the truth. The great majority of us Americans living and working abroad are not renouncing in order to avoid paying taxes. I am beginning to explore this possibility because I cannot spend six months filing my Income Tax return to two countries, besides being double taxed. Not to speak of the enormous fear of doing something wrong and losing my life savings. Do I like this? No! But I feel I have no choice.

Thatisme
Once again Mr. Wood. I am beginning to give up. In my thirty years in America I used to hear: “you can´t fight city hall”. Never quite understood it. Now I do. In my situation I believe the best I can do is to shut up and every year go from January to September or October collecting data, filling forms and send them to a CPA in NYC to do my IRS Return, FBARS and all. In a way I am glad that I will not have much long to go in this world. And I regret having one day, many, many years ago going to an US Court and become an US Citizen. Thank you for all your help.

StillAmerican
Thank you very much. I trust you and above all your expertise and judgement. After living and working 30 years in the USA I came back to my country of origin about 10 years ago. I have nobody here who is a US CPA and understands about IRS Returns from Americans Abroad. I have one telephone number to call in Philadelphia (paid), I do not have representation (the congressmen from the last State I lived on do not accept e-mails from outside the USA. I have spent an enormous amount of time and money trying to do the right thing. I only learned about FBARS in 2009 when visiting my “children” in the USA. This was too late, I was already considered a criminal for not filing it before and the penalties were stiff and included 27.5% of my small life savings. There are so many things. For instance Americans in France do not pay US Income Tax on their French pensions. I do. If filling as a Self Employed I have to pay Self Employment Tax to two countries, 16% to each, having no return. I live in fear, the advices I get do not always coincide. I am slepless and in bad health. I don´t want to become a “victim”. I will listen attentivelly to your thoughts. Many thanks and regards.

Continue reading Another Brock Warrior Down – In Memory of Marcio V Pinheiro →

(Adapted from Emerson – “Concord Hymn”)
 

“Citizenship Taxation is a CRISIS for US Persons Worldwide
WHO: Host – Bahman Yazdanfar
with John Richardson, Peter W. Dunn & Trish Moon
 
 
A recent U.S. Senate Finance Committee study failed to issue any recommendations to address the intolerable treatment of the 8 million “U.S.Persons” (and their families) living abroad. One noted tax-lawyer implied that the Working Committee “is willing to state that these concerns need to be considered however,is not yet willing to say there is a crisis.”
The U.S. Senate Finance Committee response to expats: “NOT a Crisis”
Our response: “See You in Court”
 
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• What is CBT? (Citizenship-based Taxation)
• Why is it so difficult to to understand how CBT & FATCA reporting is not the same as RBT & CSR reporting?
• Will RBT end FATCA and the IGA’s?

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With the hashtag: #CBTLawsuit
 
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