Month: September 2015

Letter to Minister of Revenue Regarding IRS Delay in Account Reporting

 

cross posted from the ADCSovereignty Blog

ADCS_ReqMinFind_b_SEP_21_2015 (1)

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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

Click to access 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

The #StopFatca Press Release and Social Media Page

stop fatca

 
cross posted from ADCSovereignty page

ADCS PR pdf file: ADCS PR 19SEP15 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 THE EXCHANGES 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

from Olivier:

Since it is a Twitter assault, may I suggest that you manageflitter.com use to identify your followers with the highest influence, and contact them to RT. Let the assault begin!

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.

Samples:

Tweet 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

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

IRS extends FATCA Compliance Date for one year to September 30, 2016

cross posted from the ADCSovereignty 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 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.

“How To Live Outside The United States In An FBAR And FATCA World” – Part 2 – Taxation and your country of residence

Introduction …

Tax Connections recently reposted a post that I wrote:

“How To Live Outside The United States In An FBAR And FATCA World”. That post was reposted at the Isaac Brock Society, where it has received a number of interesting comments. Additional comments appear at the American Expatriates Facebook group. The comments have made me realize that there are many, many, more dimensions to this problem.

Americans abroad by definition live in other nations and are subject to the tax jurisdiction of other nations. My first post dealt with the life of U.S. citizens abroad from the perspective of U.S. taxation and regulation. What about from the perspective of your country of residence!

A particularly insightful comment at the Isaac Brock Society from Edelweiss reminded me that Americans abroad must be mindful of the tax laws of their country of residence. Edelwiess’s comment which is worth a post (and is being reposted here) is a stark reminder how the laws of all nations can impact your choice of investments anywhere.

In my original post, I listed as my “5th Commandment” (of 10 Commandments):

5. Thou shalt NOT buy non-U.S. mutual funds. If you do, you will have your gains confiscated in the form of an “Excess Distribution” Tax. Buy American. Buy U.S. mutual funds.

This is true from a U.S. tax perspective. Edelweiss reminds us that we must also consider the tax perspective from the country of residence – in this case the U.K. Edelweiss comments:
Continue reading “How To Live Outside The United States In An FBAR And FATCA World” – Part 2 – Taxation and your country of residence

“How To Live Outside The United States In An FBAR And FATCA World” – Part 3 – Sanctions and “direct life control”

Introduction …

fischer1992

Tax Connections recently reposted a post that I wrote:

“How To Live Outside The United States In An FBAR And FATCA World”. That post was reposted at the Isaac Brock Society, where it has received a number of interesting comments. Additional comments appear at the American Expatriates Facebook group. The comments have made me realize that there are many, many, more dimensions to this problem.

In 2012 a seminar presenter at NYU joked that:

“FATCA is the gift that just keeps on giving”.

What has become clear (as a U.S. tax expert once commented) is that:

“U.S. citizenship is the gift that just keeps on taking!”

FATCA is simply a mechanism to help the USA exploit “U.S. citizenship” to keep on “taking” from:

There is more than one way of “taking” …

“Some” ways of taking include:

  • direct taxation
  • extra-territorial laws that restrict the liberty of U.S. persons (including “accidentals”) abroad

Restricting the activities of Americans Abroad

This post is to acknowledge and describe some of the ways that the USA uses its assumed jurisdiction over “U.S. citizens” to restrict the activities of those “citizens” when they are outside the United States.

Continue reading “How To Live Outside The United States In An FBAR And FATCA World” – Part 3 – Sanctions and “direct life control”

Homeland Americans can see their future by looking at #Americansabroad

Kat Jennings of Tax Connections has organized the world’s first internet tax summit. It will take place on September 21 -23, 2015. Free tickets are available.

Incredibly, the first day will provide education on the problems of Americans abroad which include: citizenship taxation, FATCA, FBAR, PFICs, foreign corporation, living as a U.S. citizen abroad, relinquishing U.S. citizenship and the Exit Tax.

This summit affords an excellent opportunity to educate large number of people including Homeland Americans. Therefore, we urge you to send the URL of this page;

https://citizenshiptaxation.wordpress.com/2015/09/13/homeland-americans-can-see-their-future-by-looking-at-americansabroad/

in an email, which might read:

“Dear Friend:

Please take the time to learn how the U.S. Government is destroying the lives of your fellow citizens abroad. Through a new U.S. law called FATCA, citizenship taxation and more, the U.S. Government is putting your fellow Americans in a position where they are being forced to renounce their U.S. citizenship. To hear their stories “first hand”, please visit:

http://www.vimeo.com/citizenshiptaxation

You are invited to learn more by attending the world’s first Internet Tax Summit on September 21 – 23, 2015. The day that focuses on the plight of Americans Abroad will be September 21.

You can register for and get a free ticket for the conference here.

What follows is some information about this event:

americansabroad1taxconn1

americansabroad1taxconn2

americansabroad1taxconn3

americansabroad1taxconn4

Please take the time to forward this important information to everybody you know!

Learn more about the Internet Tax Summit at:

http://www.taxconnections.com

“Coming Into Tax Compliance Book” – How Americans can come into U.S. tax compliance in a FATCA world

 

Are you “Coming To America” by entering the U.S. tax system as an American Abroad?

The “How To Come Into U.S. Tax Compliance” book for Americans abroad

John Richardson, LL.B, J.D.

I have contributed to establishing the new “Citizenship Taxation” site.

As part of launching that site, I have written a series of posts providing relevant information (in a broad sense) about how Americans abroad, who did not know about their U.S. tax obligations, can come into U.S. tax compliance.

Sooner or later, it’s likely that many people will receive a FATCA letter. In your panic, you should be careful. There are a number of things Americans abroad should consider before consulting a lawyer or tax professional.

This series of posts are developed from my “Educational Outreach” program for Americans abroad. It is an effort to respond in a practical way to the questions that people have.

The “Coming Into Compliance Book” is designed to provide an overview of how to bring some sanity to your life.

The chapters of “Coming Into Compliance Book” are:

Chapter 1 – “Accepting Cleanliness – Understanding U.S. Citizenship Taxation – To remain a U.S. citizen or to renounce U.S. citizenship”

Chapter 2 – “But wait, I can’t renounce U.S. citizenship if I’m not a U.S. citizen. How do I know if I am a U.S. citizen?”

Chapter 3 – “No matter what, I must come into U.S. tax compliance – Coming into U.S. tax compliance for those who have NOT been filing U.S. taxes”

Chapter 4 – “Oh no, I have attempted U.S. tax compliance by filing tax returns. I have just learned that I have made mistakes. How do I fix those mistakes?”

Chapter 5 – “I don’t want to renounce U.S. citizenship. How to live outside the United States as a U.S. tax compliant person”

Chapter 6 – “I do want to renounce U.S. citizenship. This is too much for me. How the U.S. “Exit Tax” rules might apply to me if I renounce”

Chapter 7 – “I really wish I could do retirement planning like a “normal” person. But, I’m an American abroad. I hear I can’t invest in mutual funds in my country of residence. The problem of Americans Abroad and non-U.S. mutual funds explained.

Chapter 8 – “We all have to live somewhere. Five issues – “The problem of Americans Abroad and non-U.S. real estate explained”

The “Coming Into Compliance Book” is designed to provide an overview of how to bring some sanity to your life.

Coming to America

You may remember the old Eddie Murphy movie about “Coming To America”.

Welcome to the confusing and high stakes rules for U.S. taxation and Americans abroad.

The United States has the most complex, confusing, most penalty ridden and most difficult anti-deferral regime in the world. McGill Professor Allison Christians has noted that Americans abroad are both:

“deemed to be permanently resident in the United States for tax compliance and financial reporting purposes” …

and are

“subject to the most complex aspects of the U.S. tax code regardless of any activity in the United States, and facing extraordinary compliance costs and disclosure risks even for nil returns”
Although Americans abroad are deemed to be resident in the United States, their assets are treated as “offshore”. In addition Americans abroad are subject to taxation in their country of residence.

All of this means that:

1. Americans abroad are subject to the worst and most punitive aspects of the U.S. tax system (there is no Homelander who is treated as badly as an American abroad); and

2. Denied most benefits of the tax systems of their country of residence.

To put it simply, Americans abroad get the worst of all possible tax systems.

The most horrific aspects of the U.S. tax system are saved for Americans abroad. Prepare to be shocked. As one commenter at the Isaac Brock Society site recently said:

Are you “Coming To America” by physically moving to America?

Here are some “Thoughts from a conversation: Green cards – the dangers of moving to and from America“.

Chapter 11: Saving the children – INA S. 301 – “Residence” vs. “Physical Presence” and transmission of US citizenship abroad

Reposted from Citizenshipsolutions.ca

NA S. 301 – “Residence” vs. “Physical Presence” and transmission of US citizenship abroad

The post raises two questions:

  1. Is a child born abroad to U.S. citizen parent(s) automatically a U.S. citizen? What are the conditions required to transmit U.S. citizenship? Who bears the burden of proving that those conditions have been met?
  2. Assuming that the child either acquires or is eligible for U.S. citizenship, should the parent register the birth at a U.S. Consulate or embassy?

The first question – is the child automatically a U.S. citizen at birth?

The United States can certainly specify conditions under which it will grant U.S. citizenship to someone born outside the United States. The question is whether the United States can impose U.S. citizenship on someone born outside the United States.

The rules for acquisition of U.S. citizenship at birth are found in S. 301 of the Immigration and Nationality Act and include:

Those born in the United States automatically acquire U.S. citizenship; and
Those born outside the United States to U.S. citizen parent(s) may acquire U.S. citizenship if certain external facts (think “citizenship” and U.S. “residence” of the parents) can be proven.
The following decision of the State Department describes the difference between “residence” and “physical presence”. The context of the decision adds weight (I think) to the argument that those born abroad to U.S. parents do NOT automatically acquire U.S. citizenship.

You can read the decision by clicking on the following pdf.

2-9-12 DOS Revocation of Certificate of Birth Abroad

The second question – should the child be registered?

The above tweet references a comment I made to a Wall Street Journal article (“When American Expats Don’t Want Their Kids To Have U.S. Citizenship”) on this question.

6:07 pm February 18, 2015
John Richardson wrote:
One of the above comments includes the following suggestion:

““I want my children to have access to both cultures and choose the one that suits them. That possibility outweighs the negatives of double taxation. They can always choose to give up their U.S. passport if they want.”

With respect this (IMHO) is very very bad advice.

Assuming it is true that a child born abroad to U.S. citizen parent(s) either IS or IS ENTITLED to U.S. citizenship, the child can either register or apply for that U.S. citizenship later. This should be the choice of the child and NOT the choice of the parent. By registering the child as a U.S. citizen the parent is sentencing the child to what is
widely understood to be the “prison of citizenship-based taxation” for life. Other U.S. laws (for example FATCA) restrict the business opportunities of U.S. citizens abroad.

Once registered as a U.S. citizen the child can (at the present time) relinquish U.S. citizenship. But, that will often result in very high cost. Many people are NOT aware that the U.S imposes an “Exit Tax” on certain U.S. citizens who relinquish their citizenship. In addition, there are the tax compliance fees. And get this, the U.S. actually
charges people $2350 for the privilege of NOT being an American. There is no country in the world that treats its citizens abroad so badly.

There are few countries in history that have imposed the kind of “Exit Taxes” the U.S. government is imposing.

The better policy is to NOT register the child as a U.S. citizen. The child can always make the choice to be a U.S. citizen once the child weighs the obligations/disadvantages of U.S. citizenship against the opportunities/advantages of U.S. citizenship.

Here is an interesting anecdote:

Mumbai immigration lawyer Poorvi Chothani’s client, a high net worth businessman, is being sued by his son because the father had got US citizenship by birth for him. (You can find the story through google.)

There are good reasons why the numbers of people relinquishing U.S. citizenship are increasing at an alarming rate!