Tag Archives: citizenship

The Amygdala or Common Sense?

Citizenship, FATCA,

Have you ever:

  • Stayed in a place where you found cockroaches in the cupboards and that night you were afraid to get into bed, convinced there were cockroaches in the sheets?
  • Had a shower after a walk in the woods to find ticks embedded in your skin, and even after inspecting every square inch of your body still felt bugs crawling all over you?
  • Walked out of your house in the morning straight into a thick spider web, and spent the next several hours brushing away imaginary spiders?
  • Gone swimming in deep water, felt something brush against your leg and practically walked on water to get out of there?

Continue reading The Amygdala or Common Sense? →

Saddened Is A Canadian Citizen!

Citizenship, ,

flagFinally! After 36 years in Canada and a very long wait for her citizenship application, Saddened became a Canadian citizen today.
Here is what Saddened sent to me in an e-mail a few minutes ago.  (I’m posting this with her consent)

I AM A CANADIAN!!!!!

 

YEAH!!!!!!!!!!

Congratulations Saddened. Now you need to change your name to Happy.   freedom next exit
Next step on the Road to Freedom is a CLN.

 

Where do we go from here? Is it time for an organization?

FATCA, ,

Since their origins, both the Isaac Brock Society and Maple Sandbox have been invaluable sources of information and a productive forum for intelligent discussion. These discussions have matured to a point where we have a much greater understanding of the overreach of the United States government into the lives of those who choose to permanently live outside of the United States or are ‘Accidental Americans’. This summer, we have seen contributors to Brock and Sandbox quoted in various publications and even have articles published in The Hill.
However, in Canada, the issues discussed here, primarily Citizen Based Taxation and FATCA, are virtually invisible to our elected representatives, the media and the general public (with the exception of the Green Party of Canada).
Living in an advanced Western democracy, with a modern and model Constitution, Canadian citizens and permanent residents can and should expect our government to protect us in many ways. We expect police and fire services, safety regulations, affordable and accessible health care,protection of our land, our borders, our resources, and our economy. And when some of those protections fail or are inadequate, we expect public debate and action by our government.
Can anyone honestly say that the Canadian government has protected U.S. persons in Canada from CBT?
We do know that Canada has limited influence over U.S. tax policies. However, except for RRSPs, why haven’t TFSAs, RESPs and RDSPs been included in any of our treaties or other agreements with the U.S.? Instead, they are treated as taxable foreign trusts, with compliance difficulties and penalties.
Why are our mutual funds and ETSs classified as Passive Foreign Investment Corporations, thereby making them subject to discriminatory taxation, complicated forms and penalties for honest mistakes?
As far as FATCA is concerned, the jury is still out. We simply don’t know the shape of a Canada-U.S. FATCA IGA and how it will compromise our Charter rights and freedoms and our privacy rights.
In spite of all the wonderful discussions we have been having, I feel we are hampered by the lack of a legally registered organization with a spokesperson the media can turn to. Instead, on those rare occasions when FATCA or other issues affecting U.S.  persons in Canada is mentioned, reporters usually turn to professionals with a vested interest in promoting compliance and fear.
This proposed organization would be one of Canadians defending Canadian interests, values and laws from the intrusion of U.S. extra-territorial taxation.
The organization could begin with just a few core members to get things started and look after the not very difficult or costly task of provincial registration. Then it would recruit members. Both the Maple Sandbox and Isaac Brock Society can be used to promote membership. There would be a small membership fee to defray expenses.
It is my opinion that the organization would be more effective if the core group was located in Ottawa or Toronto. There appears to be a more concentrated population of duals and former Americans in those cities. The location would also be closer to political and media centres, and thus possibly have more legitimacy in the eyes of the media and the powers that be.
The organization itself might not launch any lawsuits over FATCA, but would assist anyone or any other group, such as the Canadian Civil Liberties Association, with both financial and research assistance.
So, the question is, where do we go from here? Is just discussing the problems of CBT and FATCA enough or do we need boots on the ground, so to speak?  Please share your ideas.

"Nothing Against Canada." Nothing Against United States (Until Now)

Citizenship, FATCA, IRS, , , , , ,

Ted Cruz has “nothing against Canada.”  Likewise, many Canadians born in US have”Nothing against United States (until now).the hill
Here is an article by Lynne Swanson (aka Blaze) which appeared on the Congress blog at The Hill today.
This tells Senator Ted Cruz he has nothing to fear from Canada for renouncing Canadian citizenship–unlike what happens in reverse

Senator Cruz, Canada respects your decision to renounce your Canadian citizenship. When it is granted, I assure you Canada will not stalk you for information about your private finances and will not demand taxes or penalties from you.
Senator Cruz, will you and your Congressional colleagues do the same to protect Canadians and others around the world from outrageous demands of IRS and US Treasury?

 

What Would Einstein Think Of FATCA?

FATCA, , ,

EinsteinAlbert Einstein said “The hardest thing in the world to understand is the income tax.”
He also said “This (preparing my tax return) is too difficult for a mathematician. It takes a philosopher.”
 
It takes much more than a mathematician or philosopher to deal with FATCA!Einstein simple
Einstein also said “If you can’t explain it simply, you don’t understand it well enough.”
What do you think Einstein would say about FATCA?
 
 
 
 

FATCA: A Project Audit

FATCA, ,

Victoria has an excellent post on her blog today:  FATCA: A Project Audit.
Victoria looks at FATCA through the lens of her professional experience computer auditmanaging large information systems for multi-nationals.
She gives great insight into what might be said about FATCA in an audit.  Here are key points she thinks would be found.

Failure to identify the stakeholders.
Failure to do proper assessment of the impact and risks.
Lack of success criteria.
An out of control core model.
Complexity.
 

After her superb analysis, Victoria concludes:

Stepping back and looking at it very coldly, FATCA may represent one of the riskiest projects the U.S. has ever tried to push on the international stage.

Or, as Victoria describes in simpler terms:

FATCA is rapidly becoming a bowl of spaghetti the kids are trying to eat on a white couch.

I have no idea why Congress, IRS and US Treasury ever thought it was a good idea to have a white couch.
Let’s be kids with spaghetti. Let’s spaghetti FATCA until it looks like this!Spaghetti Baby
 
 
 

Relinquished before 2004? Applying for CLN now? What are the IRS consequences?

Citizenship, IRS, Relinquishment and Renunciation, ,

There’s no question with renunciation (Immigration and Nationalities Act, s. 349(a)(5)).  You are relinquishing your citizenship and notifying the US government of it at the same time, and that’s the date your US citizenship ends.
But what if you relinquished your citizenship by a different method of INS, s. 349(a), such as taking citizenship in another country with the intent to relinquish your US citizenship (349(a)(1))?
The State Department is clear.  No matter when you notify the US govt of your relinquishment, once your CLN application is approved, your US citizenship ended on the date you actually relinquished it (that is the date your performed the relinquishing act, eg. naturalised as a citizen of another country — this date is indicated as your expatriation date on the the CLN.)
The IRS, however, according to s. 877A(g)(4) of the US Tax Code, considers the date of your relinquishment for IRS purposes is not the date of your actual relinquishment but the date you notified the US government of it (your consulate meeting).  This was not the case prior to 2004, however [the relevant section was 7701(n) in 2004 and it was replaced by 877A in 2008].
So, what if you relinquished your US citizenship long ago, but only recently learned of US law and policy changes which make it important to be able to prove you are not a US citizen, and wish to obtain Certificate of Loss of Nationality (a document you probably never even heard of before)?  What if the current law regarding IRS and citizenship termination did not exist at the time you relinquished?  Logic  leads one to the conclusion that laws passed after a person ceases to be a citizen are irrelevant.  The IRS has never made a definitive statement on this issue, however their instructions for the 8854 (expatriation tax form) are only directed at people with expatriation dates “after June 3, 2004.”
Tax lawyers Michael J. Miller and Ellen Brody have just published an excellent article on this matter, Expats Live in Fear of the Malevolant Time Machine, in which they point out the legal, as well as common sense, absurdity of a retroactive application position.  It’s very clear reading with useful references to legislation and case law as well.

Will FATCA Cause Some of the Headlines We Read in 2015?

FATCA, FBAR, , ,

The final regulations for FATCA were released yesterday by the US Department of Treasury, and the IRS. If you’re interested, you can read all 544 abstruse pages at the links below.
As far as I can tell there is nothing unexpected in there and no good news. The United States still expects all foreign banks to comply with their law, even when it violates that country’s law. The US still expects our banks to pay huge sums to implement a foreign law, to administer a foreign law, and to betray law-abiding Canadian citizens.
I haven’t found any response or updated information from our Canadian government. The release of the final regulations led me to think about the potential impact of FATCA on Canada if our government does not protect its citizens.
https://www.federalregister.gov/articles/2013/01/28/2013-01025/information-reporting-by-foreign-financial-institutions-and-withholding-on-certain-payments-to
Or  http://maplesandbox.ca/fatca-final-regulations-are-out/
Could the following be some of the headlines we might see in early 2015?

Bankruptcies on the rise across Canada.
The Office of the Superintendent of Bankruptcy Canada has just released updated information. Bankruptcies in 2014 reached an all-time high of 117,258.  In 2011, only 81,636 bankruptcies were recorded. Continue reading Will FATCA Cause Some of the Headlines We Read in 2015? →

FATCA Fact Finding Forum Report – Part III

Citizenship, FATCA, Taxes, , , , , , , , , ,

FATCA Fact Finding Forum Report Part III
We took a break after Professor Christians’ presentation and began again with a brief talk by Anglican Archbishop Dorian Baxter who is the President of the Progressive Canadian Party. He related a very funny story of a conversation with an older member of his congregation who lamented that we no longer had Steve Jobs, nor Johnny Cash or Bob Hope. They talked a bit about this and then applied to current state of Canada – we have no jobs, no cash and no hope!
He emphasized that we need to hold the CDN govt accountable to the standard of the Westminster model of Parliamentary Democracy. This relates to a core principle of the Progressive Canadian Party and the illegal “merger” of the Canadian Alliance Reform Party (aka “CRAP”). This provoked much laughter. Then he applied the Westminster ideal to the fact that FATCA is an invasion of CDN Autonomy as well as the Canadian Treasury as it is a money grab of millions of dollars from Canadian families, their children and their children’s children.
Next we heard from James Jatras who had travelled all the way from Washington to be with us. He has a completely different approach than what is commonly being expressed, even by Brockers. We all speak of FATCA as if it will happen; “resistance is futile.” He feels there is very much that can be done to defeat FATCA.
*FATCA is not equivalent to NAFTA, WTO, etc. Most Homelanders are completely unaware of it. Including a high-level aide to a Senate Finance Committee
*FATCA amounts to a UNILATERAL, extra-territorial law which says if you don’t obey us, we will punish you with sanctions.
*Instead of an IGA, Canada should pass a tax treaty override; what we have now is the CDN govt and the FFI’s collaborating against CDN citizens.
*US: “we are generously allowing you to change your law.” This is no partnership.
*Article 2 of the IGA “foreign partner; subsection A is unequal to subsection B and Art 6 US will “eventually” adapt to partner level  This will never happen.
*like a preemptive war where one commits suicide to avoid death
*China will not; expects Brazil will not; Russia?  It is CRUCIAL that Canada say “NO” This will set the stage for others to do the same. Powerful influence since we are such a major partner of the US, if we can do it, so can others
“Never seen such a bad law similar to the Catastrophic Recovery Act of 1989 or the Dubai Ports Law, which were repealed
*FATCA stands to cost the world $1 trillion dollars what with the tax lawyers, accountants and the IT depts. required to make it work
*CBA letter to US Treasury – take 1% of the money spending to implement FATCA and use instead, to repeal FATCA
*We need $50k – $100k a month for 12 months in order to deal with repealing FATCA; ads in “Roll Call; etc, you can’t just ask Congress to do something, there’s a process
*EXTORT EMBARRASSING DETAILS/ MAKE AN ORGANIZED EFFORT
*Treasury is in a rush to get IGA’s signed before the repeal forces rise up
*Where on earth are the CDN media, the NDP, the Lib Party, the Conservative Party –(just at this point, Mr Gullon mentions a newcomer is a member of the Green Party)
*FATCA = a US Discriminatory Trade Infraction
*Canada: We will hit you with law suits, trade actions, etc. Legislation after FATCA-we will withhold 30% of all income of Americans in Canada; ask our PFFI’s to collect waivers, etc
*Seek out those spending millions now and get a tiny portion of that towards PR to repeal
*Discussion of who has signed – UK, Denmark, Ireland, Mexico, Switzerland; UK has to clear Parliament; the Honorable Sinclair Stevens suggested that we emphasize any aspect that UK has yet to clear – this could have an impact on Canada. Not sure it was clear why – i.e., an American might not understand the Canadian attitude toward England in parliamentary matters.
*Are the IGA’s “Executive Agreements?” or “Competent Authority Agreements?”  Is Treasury overstepping by not getting Congress to approve IGA’s? Treasury says they have to promulgate regulations and that they have the legal authority to do so. Do they?
*UK-signed Sept 12, 2012. They still have to implement the legislation allowing for FATCA and now, son of FATCA
*There are those who make things happen, those who watch things happen and those who ask “what happened?”  We need to be of the first category.
*You must require the government to JUSTIFY why they are doing this
*Bring back 2003 when PM Chretien said NO to attacking in Iraq; very  similar to the “coalition of the willing”  notice again, the UK is the first to sign on
*Recapture and recreate the 2003 movement
*The Green Party representative, Erik (sp?) Jacob Hawkins is a Critic in the Shadow  Cabinet, is from Barrie and works directly with Elizabeth May; Parliament recessed; however, with a petition with at least 25 signatures, a member can force Parliament to examine an issue. The Honorable Sinclair Stevens, Prof. Allison Christians and Jon Richardson immediately drafted a petition which we all signed to present ASAP and hope no IGA is signed before Parliament resumes in January.
*There should be bilateral agreements without any bizarre sanctions
*Banks themselves should have reasons to instigate movement against FATCA; likely banks have pressured Flaherty who clearly did not like, did not agree with and did not want FATCA
*Discussion of possible actions in near future re: Op Ed’s, etc. (more on this later and please don’t ask for now)
At this point, Petros asked me to drive Prof. Christians to the airport to catch her plane so I left and do not know what happened after this point though Jon Richardson mentioned there would be several more speakers after the break and Petros had prepared something, so hopefully, he will have more to report and was able to deliver his comments.
********
Generally, the audience composed of about 5 members of the Prog. Canadian Party including previously named speakers; Abby Desham, Allison Christians, James Jatras, Petros, Deckhard and myself (I don’t know if there were other Brockers) and the rest were duals with their non-US partners. I spoke to a lady who said she was an Accidental remaining in “full ostrich;” she has been following since ExpatForum and reads IBS. The lady sitting next to her had to go but also came due to Brock.  I spoke to a couple and a man who said Peggy Nash had told him about the meeting; another set of 3 who knew via Brock and 2 more who also knew via Brock. One fellow was conversant with many concepts but I did not get a chance to speak with him. At least 11 attendees were not Brockers or speakers or Party members
****
Beginning list of possible catch-phrases/ideas to promote:
Tax Treaty Override /  US will not honor treaties / futility of reciprocity /US is doing something OTHER than citizenship-based taxation / War of 2012-War of 1812 idea) / violating Autonomy, violating privacy/ Bullying – not on the playground, not here either / Sanctions against Canada / A REAL FRIEND SAYS ‘NO’
 

FATCA Fact Finding Forum Report – Part II

Citizenship, FATCA, IRS, Taxes, , , , , , , , , , ,

Part II
We then started with this video:
http://www.youtube.com/watch?v=3Q9QoHXt6I4
The emphasis on how bizarrely the indicia rules could be interpreted began to be a framework of the discussion.
We then heard from Professor Allison Christians. She studied tax law in the US and has an LLM from New York City University. Point was made that this university has some sort of monopoly on producing international tax lawyers.
*At first, FATCA seemed like a reasonable proposal to deal with tax evasion as the US, along with other major European countries, were experiencing a disappearing tax base with the upper tier of taxpapers escaping their obligations.
*10 years ago, OECD began to promote state-to-state cooperation, which again, seemed a “reasonable” reaction to this situation
**Govts don’t want to hit the middle class “coming and going;” i.e., taxing them on their income and then taxing them again on what they spend on consumption. VAT-GST-HST, etc. The upper tier evades and the lower tier has nothing to pay.
* Law pulls everything into it’s lane – i.e., not just the top tier/tax evaders but also everything “foreign”
*PFFI has two choices:
1) seek waivers which results in giving whatever info the bank asks with consent to disclose to the IRS OR
2) close the accounts
*Important to note – this is NOT a CLOSED agreement; the IRS/US has carte blanche to ask WHATEVER  they want WHENEVER they want (later)
*A recalcitrant PFFI will have 30% withholding on it’s US source cash flow; interest, dividends and property; property worth $1000 sold for a loss at $800; however, FATCA will withhold 30% of that $800.
*at all levels/pass-through-pmts i.e., not just the PFFI of the US Person but the FFI that sends to the PFFI, etc.  Building in a withholding succession.
*The “get out of jail free card” is the IGA
*packaged as information exchange, the current Treaty already covers this; we have low financial privacy with regard to CRA who also has restrictions with what it can and cannot do with our information; we should have a HIGHER right with respect to a 3rd party
*with US and Mexico already having IGA, 2/3 NAFTA is already signed on and danger of Canada being swept in
*We MUST recognize/emphasize that FATCA is INCONSISTENT with our domestic law
*It violates Canadian Autonomy (as opposed to sovereignty); sovereignty is a problematic, binary concept, law of contestation.   Use AUTONOMY instead
*it violates a USC’s mobility
*Canadian citizens are not given a choice since the FFI’s have already chosen for us
*THIS IS EXTREMELY IMPORTANT-just like in litigation, the goal is not necessarily to win; we must do what we need to do to ‘WIN THE PUBLIC RHETORIC”  i.e., get attention in the PUBLIC COURT
*Revenue Code – can elect to be treated as a US company (or taxpayer); parity
*there is no parity between a dual in Canada and a dual in the US
*Case studies where a statute may look facially neutral but challenged by “intl” law
*?  USC violated via Constitution with restriction on leaving?
*who is already over-reacting to IRC-US conservatives
*4 things we can do
1) FATCA = a US treaty override
     similar to 1986 Branch Profits Tax
“later in time law”  concessions where legislation will trump Treaty
2) doing it now with FATCA statute; PFFI has to waive any rights under ANY Treaty;  ex subsidy claim under WTO or NAFTA or FTAA; not just the double-tax treaty
*an attempt to get USC’s abroad to relocate
*an IGA acknowledges the need to waive rights under all treaties; no competent govt would agree to such; FATCA does override the double-tax treaty
*YOU DON’T HAVE TO WIN YOU JUST HAVE TO MAKE IT EXPENSIVE AND GET PUBLIC AWARENESS  (ex the reciprocity issue)
2) Possible violation via NAFTA (but trumped by IGA?)
3)   NB  US has at least 20 FTA’s which amount to defacto subsidies for US institutions
4) International law – customary laws being violated; a sovereign nation has the right to regulate in it’s territory and the power to protect the privacy of it’s own people
*Avoid use of the term citizenship-based taxation; all countries do this with tie-breakers in their treaties; point out US is doing something OTHER than citizenship taxation
*re-think the charade of cooperation; Canada gets nothing, the PFFI gets nothing; pure extraction, no quid pro quo
*under no circumstances should Canada sign an IGA; PFFI challenge any bank signing away their rights who then, sign away yours
*there will be an ongoing cost to saying “NO”
*problem with arguing FATCA  violates NAFTA is treaty override-SAY IT IS and DEMAND the government (Canada) to say IT’S NOT
IT IS a tax treaty override and it IS a privacy override-which are we to give up?
*discussion of 6 indicia and truly bizarre ways in which can be interpreted (too long to go into here but Allison did a superb job of showing these, which will be on the video)