# FATCA lawsuit against Canadian government information here



## RCB (Jan 11, 2014)

Yet another Canadian person has posted here, having their "Oh My God" moment, discovering the US IRS wants to tax their Canadian income, calling them a US person, along with their Canadian bank. I thought I would provide the link to the Canadian lawsuit against the Canadian government, enabling this extortion, that will send Canadian financial information (account #s, account balances, name, address) to the IRS. It is updated, and the summary trial will take place Aug. 4-5, 2015 in Vancouver. This lawsuit is funded by we little people.

http://isaacbrocksociety.ca/2015/02...ey-actions-milestones-and-timeline-estimates/


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## RCB (Jan 11, 2014)

Senate Finance Committee hearing transcript on FATCA implementing legislation (C-31) May 13, 2014, for those interested.

http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6597204&Language=E&Mode=1


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## snub (Jun 3, 2015)

Thank you for the links. Lots of good information there.


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## james4beach (Nov 15, 2012)

Is it clear what conditions currently lead to the banks transmitting this data to the IRS?

Being US-born is one. But my concern is that "US person" definition is about much more than just citizenship. For instance, a business travel who often goes to the US for business can become a "US person". A snowbird can be a "US person". And I worry that the Canadian banks, to be conservative, might send many many more people's personal data to the IRS.

Does anyone know what the situation actually is? Could it be that the Canadian banks are sending EVERYONE's data to the IRS?


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## Eclectic12 (Oct 20, 2010)

^^^^

A good question ... though as I understand it, the point of the agreement Canada signed was for the bank to hand over the info to CRA who would then hand it over to the IRS. I presume this is to absolve the bank from legal issues 



> In Canada’s case, the broad agreement calls for the Canadian tax authorities to serve as a buffer between the IRS and Canadian banks.


http://www.forbes.com/sites/robertw...hungary-sign-u-s-fatca-deals-irs-to-get-data/


As for what other than US-born is the criteria, maybe you can find in the "agreement" hyperlink of this article. It seems to download a PDF of the agreement.
http://globalnews.ca/news/1130967/canada-u-s-sign-controversial-fatca-tax-deal/



Cheers


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## snub (Jun 3, 2015)

Eclectic12 said:


> ^^^^
> 
> A good question ... though as I understand it, the point of the agreement Canada signed was for the bank to hand over the info to CRA who would then hand it over to the IRS. I presume this is to absolve the bank from legal issues



That is what I was told by my bank.


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## Userkare (Nov 17, 2014)

james4beach said:


> Is it clear what conditions currently lead to the banks transmitting this data to the IRS?
> 
> Being US-born is one. But my concern is that "US person" definition is about much more than just citizenship. For instance, a business travel who often goes to the US for business can become a "US person". A snowbird can be a "US person". And I worry that the Canadian banks, to be conservative, might send many many more people's personal data to the IRS.
> 
> Does anyone know what the situation actually is? Could it be that the Canadian banks are sending EVERYONE's data to the IRS?


I've noticed of late that the banks I deal with are saying that they want to update their clients information... "to better serve their customers". Sure, serve them up to the IRS they mean!

So far, I have only been asked directly if I was a "US person for tax purposes", not where I was born. Even though I have a 1972 dated CLN renouncing my US citizenship, I still don't want to disclose my birthplace for fear that some underpaid desk jockey at the bank won't understand what that means, and forward my info anyway.

I believe that if you refuse to answer, they will forward your name to the CRA. I'm not sure then if CRA will attempt to verify whether or not your carcass should be fed to the bald eagle.


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## Eclectic12 (Oct 20, 2010)

Userkare said:


> I've noticed of late that the banks I deal with are saying that they want to update their clients information... "to better serve their customers".
> 
> Sure, serve them up to the IRS they mean!


From what I recall, the Canadian banks lobbied both the Canadian & US gov'ts for years saying they wanted no part of FATCA or the additional costs that updates to their computer systems would cost. 

So while in practice, the info flow would "serve them up" - for better or worse, it is the framework the banks have to operate in given what the two gov'ts have agreed to. It would appear any blame here belongs to the gov't level.


Cheers


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## kcowan (Jul 1, 2010)

In Mexico, the banks refused to deal with USians until their head office had agreed to new procedures. Then we were all asked to come and complete new forms. We are so glad that we decided not to buy in the US in 2002. Cost was the deciding factor and that was when the Peso was 7.1 and now it is over 12 to the C$. 

But we have friends in Vancouver who have spent many $1000s in accounting fees to prove that they and their children (born in the US) are OK with Uncle Sam.

(Ironically, it is taxation without representation that stimulated the US Revolution against Britain.)


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## RCB (Jan 11, 2014)

james4beach said:


> Is it clear what conditions currently lead to the banks transmitting this data to the IRS?
> 
> Being US-born is one. But my concern is that "US person" definition is about much more than just citizenship. For instance, a business travel who often goes to the US for business can become a "US person". A snowbird can be a "US person". And I worry that the Canadian banks, to be conservative, might send many many more people's personal data to the IRS.
> 
> Does anyone know what the situation actually is? Could it be that the Canadian banks are sending EVERYONE's data to the IRS?


No one knows exactly what the situation is. There is guidance in the IGA, and C-31 regarding implementation for financial institutions (not just banks or brokers, but insurance companies as well). This guidance is full of "may"s. May use this indicator, may use this form. It's a mess. From reports on the IBS "what's your bank asking" thread, there seems to be no consistency with the big five. My own bank had no interest in my CLN when I presented it, and showed me my client profile, including the FATCA tab. This has not been the case for others.

I have read all of the documentation, but have found no guidance for CRA. What they will do with whatever they receive is a mystery. I would assume they will just bundle it and transmit all off to the IRS.


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## james4beach (Nov 15, 2012)

Canadian banks don't want to do this. They are totally being forced to by the US.

If you want to see what happens to a bank that doesn't play along, look at Swiss banks like Wegelin. They tried to preserve the privacy of their clients, and the US destroyed them... in the case of Wegelin, the US effectively shut down Switzerland's oldest private bank.

Also interesting, some time before the US shut them down, Wegelin wrote a now-famous article on why people should avoid investing in the US. They explain why it's dangerous for investors and banks to have US exposure:
http://www.greatponzi.com/shared/Wegelin-Document-on-American-Taxes-and-Assets.pdf


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## gardner (Feb 13, 2014)

james4beach said:


> "US person" definition is about much more than just citizenship


I read through the FATCA documentation and US Person is not defined at all, and likely means whatever the IRS decides it should mean. It certainly includes citizens, people entitled to be citizens, whether they actually are or not, residents and people that have been residents. But it *could* include almost anyone, if they wanted it to. It could mean anyone that:

has visited the US, maybe on a non-tourist visa
has investments in the US, generates capital gains in the US
pays taxes (eg witholding taxes) in the US
holds a $US bank account
works for a US company
deals with a financial institution through which the NSA can sniff out your details

I suspect that the banks simply hand *everything* about *everyone* to the CRA, and the CRA provides a means for the IRS to search it any old way they feel like.


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## RCB (Jan 11, 2014)

Second lawsuit filed. This one in the US, led by Rand Paul and several other plaintiffs. Information on filing here:

http://isaacbrocksociety.ca/2015/07/14/finally-the-bopp-suit-has-arrived/

Washington Times coverage:

http://www.washingtontimes.com/news/2015/jul/14/rand-paul-sues-obama-over-foreign-banking-law/


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## fatcat (Nov 11, 2009)

the article doesn't even touch on what is becoming an equal burden which is the fact that as a dual citizen there is a long list of canadian financial products that i can't even buy because the tax reporting is so complex and costly including tfsa's, partnerships, etfs and reits

anything that generates "passive"income (a pfic) above a threshold requires complex tax reporting, tfsa's are considered trusts and require complex reporting

we can't even invest our money properly because we are restricted from owning a wide range of financial products

the problem with paul's effort is that he is heavily politicizing it as a republican issue, this is a big problem, we need a bipartisan effort


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## RCB (Jan 11, 2014)

I can't speak to US partisanship, I have only ever been Canadian despite what the US seems to think on any given day. I'm just happy action has been taken in the US courts. I really don't give a damn who initiates it.


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## RCB (Jan 11, 2014)

Today is the second day of a two day summary trial for a portion of the case against the Canadian government.

Yesterday the judge denied the Canadian government's motion for adjournment.

Further updates can be found on the comments here:

http://isaacbrocksociety.ca/2015/05...ser-pour-notre-poursuite-judiciaire/#comments


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## gibor365 (Apr 1, 2011)

Expenses for implementing FATCA looks much higher than proofit. imho, US is implementing FATCA, mostly because they want to track and have all info on everyone on this planet.


> Although numbers are still somewhat speculative, estimates of the additional revenue raised seem to be heavily outweighed by the cost of implementing the legislation. The Association of Certified Financial Crime Specialists (ACFCS) claims FATCA is expected to raise revenues of approximately US$800 million per year for the U.S. Treasury; however, the costs of implementation are more difficult to estimate. ACFCS also claims it is extremely likely that the cost of implementing FATCA (which will be borne by the foreign financial institutions) will far outweigh the revenues raised by the U.S. Treasury, even excluding the additional costs to the U.S. Internal Revenue Service for the staffing and resources needed to process the data produced.[56] Unusually, FATCA was not subject to a cost/benefit analysis by the Committee on Ways and Means. Perhaps not considered by Congress, the cost to the global financial institutions to implement FATCA could be $200 plus billion dollars, based on per capita costs for Australia and the UK


These anti-FATCA countries are giving the US the middle finger http://nomadcapitalist.com/2014/05/26/anti-fatca-countries-giving-us-middle-finger/


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## fatcat (Nov 11, 2009)

even if they win at trial, there will be another law ... you are facing the combined forces of the internal revenue service, united states treasury, canada revenue agency, the canadian parliament and the us congress who are setting what will be a worldwide precedent that demands citizens all over the planet disclose their assets

i can see perhaps the law getting changed to make it more workable like bringing in a large exemption threshold but some version of this law will be on the books no matter what happens at this trial

i get that ib members are angry and frustrated, i am also but this will go down one way or the other

time and money would be much better spent vociferously lobbying canadian mp's to demand/ask/consult for higher thresholds for dual citizens who already live under a very tight tax regime like canada

this is more angry than smart i believe

i think governments around the world are going to start demanding a lot more from their expats, good on them

like donald sutherland and his whining about voting even though he doesn't live here or pay taxes here

the real problem isn't the theory of the law but the execution which has been very poorly done


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## Eclectic12 (Oct 20, 2010)

^^^^

If the court (and appeals all the way up to the Canadian Supreme Court) rule it's a problem where the end result is another law that the combined forces will overwhelm - I doubt successful lobbying of Canadian MPs is any better. AFACIT - it is the US that is setting the thresholds/procedures so that would seem the place for lobbying to have chance of being effective.

Not that the Canadian banks lobby efforts in the US made a dent ...


Cheers


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## fatcat (Nov 11, 2009)

the usa is essentially setting a precedent that will start to be followed worldwide ... canada should do it


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## kcowan (Jul 1, 2010)

fatcat said:


> the usa is essentially setting a precedent that will start to be followed worldwide ... canada should do it


Canada should promote taxation without representation? A throwback to The British-North-America Act?

There is only one evil nation in the western world. You want to add one?


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## fatcat (Nov 11, 2009)

kcowan said:


> Canada should promote taxation without representation? A throwback to The British-North-America Act?
> 
> There is only one evil nation in the western world. You want to add one?


citizenship shouldn't be free .. too many people use their citizenship as a safety valve, a convenience and don't pay a dime for it

all kids of people live abroad and then come back to canada when they need health care or security of one kind or another, people who live in canada and pay taxes are shouldering the burden of all of these "convenience canadian's" 

i have no problems with dual citizenship (i am one) but i don't think it should be free

donald sutherland can stick it ... he has no right to vote in our upcoming election ... he neither lives in canada nor pays taxes here


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## RCB (Jan 11, 2014)

fatcat said:


> citizenship shouldn't be free .. too many people use their citizenship as a safety valve, a convenience and don't pay a dime for it


Citizenship shouldn't be imposed, or reimposed, upon people by foreign countries attempting to suck them and their families dry under the guise of taxation. I'd have more respect for the US if it admitted it was broke, had a spending problem, and stuck a gun in my ribs. At least one could respect their honesty.


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## james4beach (Nov 15, 2012)

I'm a Canadian living in the US, working full time in the US. However I continue to maintain residential ties to Canada, and I also choose to pay taxes in Canada... much to the shock of colleagues.

(Unlike my colleagues I also have very significant investments in Canada, and continue to send nearly all of my net income north of the border, where it finds a home in Canadian banks and securities)

To me, it's part of my social obligation. Because Canada is my home and has helped me out with so many benefits (health care, employment insurance, education scholarships) I am now happy to do my part and pay taxes to Canada & my province, even though I could avoid doing so.


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## james4beach (Nov 15, 2012)

^ I now think my above post is off topic.

In my view, _citizen_ and _taxpayer_ are not the same thing. I don't like it when people use "taxpayer" as a kind of replacement for citizen, because it implies that a national belonging is all about income and taxes.

Take for example a 60 year old homeless Toronto man, someone who was born in Canada and spent his life working in manufacturing jobs... but in his later years suffered from alcohol problems, couldn't find jobs, and is now homeless. He is not a taxpayer any more. He is most certainly still a citizen and a member of society.

Or a bright and enthusiastic 19 year old student, who is studying full time and will help form the future of our country... even though he is not currently working. He is not a taxpayer yet.

How about soldiers who risked their lives fighting in battles, under the country's flag... were injured (physically or psychologically)... and then became poor and unemployed, or on disability. The US has tons of veterans like this; the recent Iraq and Afghanistan wars produced tens of thousands of homeless veterans. *And there's about 10 million US veterans who don't have jobs*. They're not taxpayers either but I assure you they have a solid right to be called a citizen.

Please don't use citizen and taxpayer interchangeably. It's kind of insulting to a lot of citizens. My point here is that citizenship (and the rights that come with it) cannot be defined in terms of earning income or paying taxes.


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## RCB (Jan 11, 2014)

Unfortunately, citizen does = taxpayer in the US. And we all know who creates US citizenship law.

james4beach, have you investigated what will happen if you leave the US regarding the exit tax?


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## kcowan (Jul 1, 2010)

RCB said:


> Unfortunately, citizen does = taxpayer in the US.


Yes except that all "US Persons" are taxpayers now with no rights of citizens.


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## Guban (Jul 5, 2011)

What RCB wrote is correct. US citizen = taxpayer, but does not follow that a US taxpayer has the rights of a US citizen. This is not surprising, nor anything that people should expect. A resident Of Canada who is not a citizen also can be a taxpayer without voting rights. Similarly, a US person is often one that spends a lot of time in the US. Why would such a person be given the rights of a US citizen? It is not all about paying taxes!


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## RCB (Jan 11, 2014)

kcowan said:


> Yes except that all "US Persons" are taxpayers now with no rights of citizens.


Correct, if you add to "US persons" not resident in the US. Illegal immigrants in the US have more rights under the US system than those US persons outside the US.


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## fatcat (Nov 11, 2009)

RCB said:


> Correct, if you add to "US persons" not resident in the US. Illegal immigrants in the US have more rights under the US system than those US persons outside the US.


the designation "us person" is voluntary (so is, for that matter, citizenship since it can be relinquished at any time) and is easily relinquished by virtue of not traveling in or doing business in the usa

if one finds oneself so designated, you can begin the process of untangling yourself and becoming a non-us person

it is no surprise that the usa takes a hard line on the issue, it has has worldwide taxation for a long time and all of a sudden people are shocked to find out they should be filing us taxes .. it is so completely disingenuous and i flatly don't believe all these people

all this weeping and moaning ... "i had no idea being born in new hampshire made me a us citizen" ... really ? ... let me get out my hankie for you

they want to keep that nice little ticket into the usa and not have to pay for it ... simple as that

the law is very badly implemented, very badly, but the idea behind the law is perfectly within the united states right


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## james4beach (Nov 15, 2012)

RCB said:


> james4beach, have you investigated what will happen if you leave the US regarding the exit tax?


Yes I will be paying some special taxes when I exit the US. However once I leave the US, and once I have been away long enough that I no longer pass the substantial presence test (which is a sliding window of # of days), I should - hopefully - be completely free & clear of all US tax obligations.



> What RCB wrote is correct. US citizen = taxpayer, but does not follow that a US taxpayer has the rights of a US citizen. This is not surprising, nor anything that people should expect ... It is not all about paying taxes!


I pay taxes to the US, but don't have the rights of a citizen. These terms are not synonyms, like you said it's not all about paying taxes.


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## Guban (Jul 5, 2011)

james4beach said:


> Yes I will be paying some special taxes when I exit the US. However once I leave the US, and once I have been away long enough that I no longer pass the substantial presence test (which is a sliding window of # of days), I should - hopefully - be completely free & clear of all US tax obligations.
> .


What special taxes will you have to pay, James?


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## Eclectic12 (Oct 20, 2010)

fatcat said:


> the designation "us person" ... is easily relinquished by virtue of not traveling in or doing business in the usa


If it's that simple, one wonders how Europeans who have never visited or done business are being flagged.




fatcat said:


> ... if one finds oneself so designated, you can begin the process of untangling yourself and becoming a non-us person


True ... for a fee.


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## RCB (Jan 11, 2014)

fatcat, you seem to be poorly informed.



fatcat said:


> the designation "us person" is voluntary (so is, for that matter, citizenship since it can be relinquished at any time) and is easily relinquished by virtue of not traveling in or doing business in the usa


The designation "US person" is imposed by the US government, as is citizenship. It is NOT easily relinquished by virtue of not travelling in or doing business in the US. One must perform an expatriating act (ie. obtain a second citizenship AFTER age 18, work for a foreign gov't, as well as some other "relinquishing" acts, while KNOWING you have US citizenship, and MEANING to give it up), or one must make an appointment with a US consulate (currently months to a year wait in Canada), swear an oath to renounce that US cirizenship, AFTER paying $2,350 in US funds. Afterwards the IRS expects you to have completed at least 5 years of income tax returns, and file the exit tax form. No thanks.



fatcat said:


> if one finds oneself so designated, you can begin the process of untangling yourself and becoming a non-us person
> 
> it is no surprise that the usa takes a hard line on the issue, it has has worldwide taxation for a long time and all of a sudden people are shocked to find out they should be filing us taxes .. it is so completely disingenuous and i flatly don't believe all these people
> 
> all this weeping and moaning ... "i had no idea being born in new hampshire made me a us citizen" ... really ? ... let me get out my hankie for you


Really? 'Cause the US told me in the 90s I was not a US citizen. Just like they told many of us decades ago. When they try to suck money out of my family 20 years later I should just bend over? Not a chance. They can kiss my Canadian derriere.




fatcat said:


> they want to keep that nice little ticket into the usa and not have to pay for it ... simple as that
> 
> the law is very badly implemented, very badly, but the idea behind the law is perfectly within the united states right


You really are poorly informed. Perhaps you should try to discover how many of us wanted "to keep that nice little ticket into the USA". You might want to investigate how many of us ever identified our selves as Americans, or ever held a US passport. I think you may be surprised.

US citizenship is right up there on my list unwanted things, like STDS and cancer. Has been that way for decades.


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## james4beach (Nov 15, 2012)

Guban said:


> What special taxes will you have to pay, James?


One is that upon withdrawing my 401(k), I'll pay a 10% penalty as well as regular taxes. I'll be happy to pay the 10% penalty for the comfort of having the money in my home country, in Canadian jurisdiction.

Another is the Sailing or Departure Permit, by filing Form 1040-C or Form 2063 with the local IRS office before I leave the USA. This is an extra filing (with tricky timing requirements) but I don't think it's an extra tax... it's just to make sure you don't flee the country while owing taxes.


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## gibor365 (Apr 1, 2011)

> US citizenship is right up there on my list unwanted things, like STDS and cancer. Has been that way for decades.


 Well said!  



> A record number of Americans — 1,337 — relinquished their passports in the first three months of 2015, according to the U.S. government. That’s up 18 percent from last year at this time, according to an analysis by Bloomberg News, and nearly 40 percent of the total 3,415 Americans who gave up their passports in 2014.


http://www.quora.com/Why-are-people-getting-rid-of-their-US-citizenship
http://globalnews.ca/news/1532175/want-to-get-rid-of-u-s-citizenship-fee-just-quadrupled-to-2350/

US and A it's a dictatorship who on daily basis brainwashing their people! The most hated country in the world.


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## fatcat (Nov 11, 2009)

RCB said:


> The designation "US person" is imposed by the US government, as is citizenship. It is NOT easily relinquished by virtue of not travelling in or doing business in the US. One must perform an expatriating act (ie. obtain a second citizenship AFTER age 18, work for a foreign gov't, as well as some other "relinquishing" acts, while KNOWING you have US citizenship, and MEANING to give it up), or one must make an appointment with a US consulate (currently months to a year wait in Canada), swear an oath to renounce that US cirizenship, AFTER paying $2,350 in US funds. Afterwards the IRS expects you to have completed at least 5 years of income tax returns, and file the exit tax form. No thanks.


let me clarify, i was responding to kcowan's use of the term "us person" ... he was using it specifically to point to the large group of people who for various reasons are required to file us taxes, a couple of examples would be people who spend more than 4 months a year in the usa or people who own property in the usa ... in these kinds of cases, the responsibility to file us taxes is relatively easily avoided by selling property or curbing travel ... these are transitory and temporary designations more easily terminated

renouncing us citizenship is certainly a more complex, time consuming and expensive procedure .. i was not referring to renunciation of citizenship in the post you cite, merely people designated as "us persons" for the purposes of taxation



> Really? 'Cause the US told me in the 90s I was not a US citizen. Just like they told many of us decades ago. When they try to suck money out of my family 20 years later I should just bend over? Not a chance. They can kiss my Canadian derriere.


first, either you are willfully ignorant or you got bad advice, in any event the us government doesn't give free passes for bad advice ... here you are ... i would advise channeling some of your anger into the process of renouncing your citizenship, it will take time and money but you will reach the end and be done with it ... there is an amnesty in place and the irs are doing all they can to give people like you a pass if you simply file



> You really are poorly informed. Perhaps you should try to discover how many of us wanted "to keep that nice little ticket into the USA". You might want to investigate how many of us ever identified our selves as Americans, or ever held a US passport. I think you may be surprised.
> 
> US citizenship is right up there on my list unwanted things, like STDS and cancer. Has been that way for decades.


really, so for decades you merely pretended you weren't a us citizen, you convinced yourself right ? ... except you knew that you really were didn't you, you knew you had to renounce and you knew you hadn't renounced because what the heck why not have another ticket to another country ... now you and all the rest are weeping under the burden of the privilege of us citizenship ... like i say, you would all be smarter channeling your energy constructively to simply renounce and get out but you guys would rather complain and do nothing

read james posts and see how smart he is about the knowing the law, you simply have to know the law and comply, much smarter than pretending the law doesn't apply to you because it does


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## RCB (Jan 11, 2014)

Again, you are poorly misinformed, and imposing your views upon my reality.

In the early 90s, having been born on US soil to Canadian parents, but raised from infancy in Canada, I consulted the US State Dept. I did so because I had reached adulthood, and wished only to be a Canadian citizen, not a dual Canadian/American citizen. (I had my own personal reasons for finding the US a distasteful country.) This situation arose because I was aware of certain circumstances that were required to retain my Canadian citizenship, so I wondered if there was something to be done for the US in order to shed the US citizenship.

The US State Dept. is the arm of the US government that determines, under US law, if one is a US citizen. After a rather rude 30 minute grilling, by several State Dept. employees, and escalating top the top level of the Toronto consulate (Vice Consul), I was informed that I was no longer a US citizen as I had not returned to live in the US, and had voted in Canadian elections. When I asked if I had to do anything else, I was told no. I was not told to apply for a CLN, that CLNs even existed, I was not sent one by the VICE Consul, nor was I told US citizens outside the US have tax obligations to the US. The Vice Consul is the person that CURRENTLY signs and sends out CLNs upon relinquishing or renouncing.

Please do not assume you know the facts of my life, or the facts of the lives of others. Not everyone thinks US citizenship is desirable.

I renounced US citizenship for A SECOND TIME several years ago.


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## fatcat (Nov 11, 2009)

RCB said:


> I renounced US citizenship for A SECOND TIME several years ago.


then WTF is the problem ?


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## RCB (Jan 11, 2014)

The problem is that many of us have been caught in this situation. The problem is people like you who proclaim we want our cake, and to eat it too, when they don't have the first clue what they are talking about. The problem is a foreign country is attempting to dictate what law we live under, in Canada. The problem is the US threatens us with financial penalties and criminal prosecution as tax evaders, with our own government passing legislation to send our financial information, and that of our loved ones, business partners, employers, or charities to a foreign government to use as they please.

I could go on, but if you don't get the picture, it's not worth the bother.


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## fatcat (Nov 11, 2009)

RCB said:


> The problem is that many of us have been caught in this situation. The problem is people like you who proclaim we want our cake, and to eat it too, when they don't have the first clue what they are talking about. The problem is a foreign country is attempting to dictate what law we live under, in Canada. The problem is the US threatens us with financial penalties and criminal prosecution as tax evaders, with our own government passing legislation to send our financial information, and that of our loved ones, business partners, employers, or charities to a foreign government to use as they please.
> 
> I could go on, but if you don't get the picture, it's not worth the bother.


then lets be clear about you are doing here: you incur no risk from fatca, fatca doesn't matter to your financial life one way or the other but you are suggesting, indeed even encouraging others to risk huge fines and penalties and even prison by resisting the law merely to satisfy your own beef with the us government

fine, this is your right to say whatever you want, but let's be clear about that

as i recall the op was born in virginia, the veritable navel of the united states of america but you are trying to convince him that he was not born in the united states of america (or more correctly convince him to convince himself that he wasn't born in the united states of america, apparently successfully last i heard ... and good luck with that i say)

personally, i would not suggest that anyone else incur that kind of risk just to enact some fantasy of revenge against the us government for treating me badly

getting into a fight with the us treasury department and irs is like arguing with a cop on a traffic stop, you hold 10% of the power and he holds 90%, sometimes you might win but is it worth the trouble ?

in the case of fatca, the op and others are risking a LOT of money if they lose this fight


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## RCB (Jan 11, 2014)

Actually, I believe I am the OP of this thread. Giving info to others as to how to try to avoid being financially raped just kinda seems the right thing to do, ya know?

Risk? The way everyone bows to the exceptionalism of the US, and as long as the US continues to create law, used retroactively, I am always at risk. Tomorrow they could pass a law that retroactively cancels all CLNs, magically creating more taxable "US persons". It wouldn't be the first time they've reimposed citizenship on citizens of other countries.

I have no idea why you believe I should bow down to the US, as a canadian citizen in Canada, unless you benefit in some way from US tax dollars or US infrastructure. Lets face it, the US is turning over the couch cushions in it's neighbours' homes, because it spent its welfare cheque on booze and smokes. Just because they passed laws saying they could, and threatened their way into the houses, doesn't make it right.

I am well aware of what the litigants have to lose, and I am one of their financial supporters. I am also one of 41 signatories of a human rights complaint against the US currently sitting at the UN.


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## RCB (Jan 11, 2014)

For those interested in comment on how the summary trial in Vancouver went earlier this week, there are three blog posts at the link below. Keep in mind this is just a portion of the litigation. A court date is expected sometime in 2016 for the portion to be tried under the Charter in Canada.

https://adcsovereignty.wordpress.com/category/uncategorized/


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## RCB (Jan 11, 2014)

For those interested in following the US litigation against FATCA, currently before the court, updates can be found here:

https://www.facebook.com/republicansoverseas?fref=nf


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## fatcat (Nov 11, 2009)

RCB said:


> Actually, I believe I am the OP of this thread. Giving info to others as to how to try to avoid being financially raped just kinda seems the right thing to do, ya know?
> 
> Risk? The way everyone bows to the exceptionalism of the US, and as long as the US continues to create law, used retroactively, I am always at risk. Tomorrow they could pass a law that retroactively cancels all CLNs, magically creating more taxable "US persons". It wouldn't be the first time they've reimposed citizenship on citizens of other countries.
> 
> ...


well, you clearly are emotionally invested in this thing which is fine, you can tilt at windmills all day long as far as i am concerned

but i will note again that you are functionally a chickenhawk, you want others to fight for you, you can't be harmed or hurt in this fight because you have no blood or treasure in the game 

you have nothing at risk other than indignation but are encouraging others to take risks with their financial well being and even freedom

i personally would never do that, i leave others to make those decisions for themselves since they will bear the potentially expensive consequences, this is where we differ

like a lot of canadians you have a thingy for the usa, i get it, i'm familiar with the deep and sustaining contempt for the usa that runs through a certain segment of my fellow canucks

i mostly find it amusing (it usually is evidence of the massive inferiority complex some canadians have when comparing themselves to their southern neighbour)

in this case however where people may incur massive financial penalties if they follow your and others advice, i find it a little disturbing, especially since you have not a thing to lose by willy-nilly dispensing said advice

there is an amnesty in place, it costs some time and money to work through but i think is a far better choice than risking non-compliance with the law


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## RCB (Jan 11, 2014)

Again, you don't know what you are talking about, and make far too many assumptions.


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## fatcat (Nov 11, 2009)

RCB said:


> Again, you don't know what you are talking about, and make far too many assumptions.


i have been dealing with this law for the last 5 years ... i have filed and re-filed countless fbar's both for myself and others, j have consulted high-level us tax specialists and attorneys, i have a pretty good idea what fatca is all about

i will be brief and try to sound a note of agreement since we are unlikely to appreciate each others position

the law sucks, it's badly written, it needlessly ensnares middle class people who are not wealth hiders and who, in the case of canada already live under an aggressive tax collection regime in a country that is mostly not corrupt and not nearly as easy to hide money in as many other countries are

the irs and treasury are casting an overly broad net and we all are suffering, we are paying for accountants and lawyers that we shouldn't have to pay for

but that is the way it is and i see no likelihood that it will change ... one way or the other this thing will get done, the isaac brock challenge might delay it with a win but only for a time ... it will come back in one form or another


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## kcowan (Jul 1, 2010)

fatcat said:


> ..the irs and treasury are casting an overly broad net and we all are suffering, we are paying for accountants and lawyers that we shouldn't have to pay for


and every bank and savings institution in Canada has incurred substantial costs of developing and administering the revised contracts that all clients must sign confirming that they are not "US Persons". I have signed these at 4 institutions, 2 in Canada and 2 in Mexico. Essentially they are being forced to sign up all their clients again. The costs are enormous and the benefit is miniscule, even to the IRS.

(An analogy would be to destroy the whole countryside with Agent Orange just in case a Viet Cong is hiding there.)

Yet some on here think we should sit back and take it!


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## fatcat (Nov 11, 2009)

kcowan said:


> and every bank and savings institution in Canada has incurred substantial costs of developing and administering the revised contracts that all clients must sign confirming that they are not "US Persons". I have signed these at 4 institutions, 2 in Canada and 2 in Mexico. Essentially they are being forced to sign up all their clients again. The costs are enormous and the benefit is miniscule, even to the IRS.
> 
> (An analogy would be to destroy the whole countryside with Agent Orange just in case a Viet Cong is hiding there.)
> 
> Yet some on here think we should sit back and take it!


since this is probably directed at me let me be clear, i think we should write, lobby and vote in ways that demonstrate our problems with the fatca ... but, in the meantime, i am certainly not going to recommend that anyone not comply with the law ... you incur huge risks by doing so ($10K for *non-willful* violations, if that doesn't tighten your sphincter i don't know what will)... we can all make our own minds but i am not going to encourage people to "resist" (whatever that might mean) when it could end up being financially ruinous for them

as i have said many times and james will confirm, this is costing the canadian financial services industry a ton of money and we haven't even gotten 25% of the people complying with fatca

i am not alone in dumping all kinds of financial products that require expensive and time consuming paperwork merely to own let alone profit from ... mutual funds and etf's being two examples of products i can't even own let alone any other product that might be considered a pfic

it's a badly written law and i hope it will get the revision it needs


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## kcowan (Jul 1, 2010)

fatcat said:


> since this is probably directed at me let me be clear, i think we should write, lobby and vote in ways that demonstrate our problems with the fatca ... but, in the meantime, i am certainly not going to recommend that anyone not comply with the law


We are in enthusiastic agreement. My friend from Texas asked his bank what would happen if he refused to sign and they said they would send his name in noting his refusal (he does file with the IRS yearly).


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## RCB (Jan 11, 2014)

fatcat, I appreciate your agreement in post #47.

I do not agree with needing to comply with the law of a foreign country, as a citizen and resident of Canada. Clearly Canada and the US have agreed with me at least once, as they told Eritrea to get stuffed when Eritrea attempted to impose tax on Eritreans resident in Canada and the US. Why the double standard?

This is a very complicated issue, involving not just taxation legislation, but because of US citizenship-based taxation, it also encompasses US citizenship law. It is often argued (as you mentioned) that one surely MUST know one is a US citizen, and one can ditch said citizenship easily. One would think so, using logic. Unfortunately both areas are a tangled mess of law and policy within the US, due to stacking law upon law, law applied retroactively, court challeges changing law, lack of communication to those claimed as US citizens, incompetent beaurocrats, and knee-jerk legislation from corrupt or ignorant politicians (ie. Reed Amendment). Add in "US exceptionality" and it has become a $#!+ show for we foreigners affected.

Given the above, and the fact that compliance with ANY law decreases dramatically when the law is viewed as absurd, compliance by those of us reclaimed by the US is often viewed as unnecessary. That is not to say we are not in compliance with the laws of our countries of citizenship and residence. I don't care what laws foreign countries pass, and if they choose to create law or policy that attempts to place me within their jurisdiction, for their benefit, I will not find their law moral or just, or applicable to me.


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## fatcat (Nov 11, 2009)

RCB said:


> fatcat, I appreciate your agreement in post #47.
> 
> I do not agree with needing to comply with the law of a foreign country, as a citizen and resident of Canada. Clearly Canada and the US have agreed with me at least once, as they told Eritrea to get stuffed when Eritrea attempted to impose tax on Eritreans resident in Canada and the US. Why the double standard?
> 
> ...


ok, fair enough but i want you to clear something up for me with a yes or no so i can be clear 

in your situation, you incur no obligation under fatca at all, correct ? 

you are completely free of fatca filing obligations, you aren't a citizen or green card holder, you are not a "us person" by virtue of employment, home ownership or time spent in the usa or ???

do i have that right ?

your (vociferous and uncompromising) objection to fatca is strictly political / moral ?

for you, this is a political issue of sovereignty only and not a personal/financial issue ?

correct ?


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## RCB (Jan 11, 2014)

Incorrect.

I had to pay to fly to a US consulate, and pay to renounce a citizenship at the same consulate that told me I did not have US citizensip any longer 25 years ago, when I informed them that I did not want US citizenship. I did not do so for the US, I did so to have documentation to present to my bank so that my family's private financial information would not be sent to the IRS.

At every step of renouncing and filing an exit tax form I verbally, and in writing, made my anger at the situation (and money spent) VERY clear. I have been at least as vocal with various departments of the US government as I have been here. I have also been very vocal with my MP, the Conservative Party of Canada, have donated to the Canadian legal challenge, and I am a signatory on a human rights complaint filed with the UN.

I have not been an unaffected party.

I was born in the US to Canadian parents and returned to Canada as an infant. I was born a dual citizen.


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## fatcat (Nov 11, 2009)

RCB said:


> Incorrect.
> 
> I had to pay to fly to a US consulate, and pay to renounce a citizenship at the same consulate that told me I did not have US citizensip any longer 25 years ago, when I informed them that I did not want US citizenship. I did not do so for the US, I did so to have documentation to present to my bank so that my family's private financial information would not be sent to the IRS.
> 
> ...


got it, so you have in fact renounced your citizenship and received the compliance (whatever the form is that you receive at the end of the process after your application has been approved and the date acknowledged on which you are no longer a citizen) letter and thus have no legal obligation at all to file ? right ?


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## RCB (Jan 11, 2014)

I have renounced (twice) and have a CLN (Certificate of Loss of Nationality) from the second event. They did not supply me with one 25 years ago, as they should have done.


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## fatcat (Nov 11, 2009)

got it, i think that we might actually find a fair bit of agreement,
we both hate the law and we both hate the application of the law
i am less concerned about the issue of sovereignty since i am so embedded in both countries and benefit from the many us/canada tax treaties

where we differ is outlined by the case that kcowan outlined above, his friend was told that if he didn't comply his name was going to straight to the irs, that cannot be a good development

i just cannot recommend in good conscience recommend that people disobey the law (but you can along with others) becasue IF you turn out to be wrong and the law is upheld (which i think i will be) then you are putting people in a very perilous situation with regards to their financial life, they may be liable for huge penalties if the law is upheld

doesn't that concern you ?

also, since an amnesty is in place, why not recommend that people file under the amnesty and then begin renunciation, this will take time and money but will bring them the best results, i.e. they will legally be free and clear of all usa tax machinations


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## kcowan (Jul 1, 2010)

fatcat said:


> also, since an amnesty is in place, why not recommend that people file under the amnesty and then begin renunciation, this will take time and money but will bring them the best results, i.e. they will legally be free and clear of all usa tax machinations


I think it is because compliance with the amnesty costs the average citizen at least $10k in accounting and filing fees. Plus they are threatened with being unable to enter the US. The BS is much worse than you can imagine.

(Yet Ted Cruz, born in Calgary, can qualify for US President by a simple process of rejecting his dual citizenship. The IRS are a part of the growth of the evil empire...)


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## fatcat (Nov 11, 2009)

kcowan said:


> I think it is because compliance with the amnesty costs the average citizen at least $10k in accounting and filing fees. Plus they are threatened with being unable to enter the US. The BS is much worse than you can imagine.
> 
> (Yet Ted Cruz, born in Calgary, can qualify for US President by a simple process of rejecting his dual citizenship. The IRS are a part of the growth of the evil empire...)


i would disagree a bit ... if we are talking the average joe or jane with a modest middle class set of assets and income it can be done for less than about $1200 all in.

You get 3 years of returns done at HR Block for around $1200 (or less if you cross the border and do it in the usa) and the 6 years of fbar's you do yourself by gathering together accounts for the last 6 years and just plugging in the holes on a spreadsheet

you certainly can spend 10K but you don't need to


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## RCB (Jan 11, 2014)

^ lol

H&R Block for cross border tax filings? Good luck on the penalties for mistakes.

Average Jane or John better not have any non-US mutual funds, otherwise known as PFICs.



> First, the complexity of the PFIC rules are way out of league for TurboTax or your average tax preparer. You’ll need the assistance of a specialist, and lots of it. The IRS estimates *it takes up to a stunning 30 hours of tax preparation time to complete Form 8621, which needs to be filed for each PFIC every year.*


Never heard of anyone charging $240 a year for a Canadian filing US returns. In fact two local accounting offices (one large, one small) refused to even ballpark it for me a few years ago.

http://www.internationalman.com/articles/more-unofficial-capital-controls-pfic-rules


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## fatcat (Nov 11, 2009)

RCB said:


> ^ lol
> 
> H&R Block for cross border tax filings? Good luck on the penalties for mistakes.
> 
> ...


you need to look harder 

i pay a local hr block guy who has been doing usa returns for at least 15 years and knows his stuff $350 for my return and that includes PFIC's (he tells me they are training new people on usa taxes like crazy)

find a premium usa hr block office and they will do a us return for less than $350

they guarantee 100% accuracy

here is their site specifically for expats
https://www.hrblock.com/expat-tax-p...otppartnerid=9125&campaignid=ps_mcm_9125_0102

don't make it harder than it is rcb


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## gibor365 (Apr 1, 2011)

> The IRS estimates it takes up to a stunning 30 hours of tax preparation time to complete Form 8621, which needs to be filed for each PFIC every year


 Wow!!! This is freaking unbelievable! Are they inventing those ridiculous forms on purpose, so every one will be "hooked"?! 

P.S. This is why I strongly support Flat tax rate!


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## james4beach (Nov 15, 2012)

This is why I don't buy any Canadian ETFs (they are PFICs).

My accountant also warned me that the IRS people don't know how to interpret the form 8621. So if you file this form, you have a high probability of follow-up questions and trouble. She strongly suggested that I avoid holding PFICs at all costs.


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## diharv (Apr 19, 2011)

gibor said:


> Wow!!! This is freaking unbelievable! Are they inventing those ridiculous forms on purpose, so every one will be "hooked"?!
> 
> P.S. This is why I strongly support Flat tax rate!


That is why the US is known as Form Nation. My situation was quite a bit more complex , beyond the capabilities of the local tax preparers but it cost me approx $30000.00 to get current and exit the system. This is without the PFIC gibberish as I got rid of all mutual funds years ago because of poor returns and excessive fees.


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## OhGreatGuru (May 24, 2009)

RCB said:


> ... I thought I would provide the link to the Canadian lawsuit against the Canadian government, enabling this extortion, that will send Canadian financial information (account #s, account balances, name, address) to the IRS. ...


1. Good luck suing government. As a general rule the only people who profit from it are lawyers.
2. Fighting it is running counter to the general trend in greater international cooperation in combatting international tax evasion. The US IRS has succeeded in getting Swiss banks to open up their books. 
3. Politically, Canadian governments are not going to win any friends in Congress by sheltering US citizens from the IRS, no matter how unreasonable we think their rules are. Doing so would have consequences for Canada/US relations in other areas.
4. IMHO the litigants would be better off hiring lobbyists in Washington to campaign for changes to the US tax laws.


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## RCB (Jan 11, 2014)

OhGreatGuru said:


> 1. Good luck suing government. As a general rule the only people who profit from it are lawyers.
> 
> * The Canadian government has been on the losing end of litigation brought against it lately. *
> 
> ...


diharv, was that $30,000 all tax prep bill, or does it include renunciation fees or tax and penalties?


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## Robillard (Apr 11, 2009)

This is a bit off topic, but the OECD has finished work on the common reporting standard, which you can think of as kinda like global FATCA, with less of the extra-territoriality. Basically, the tax authorities in every country that has agreed to take part (right now 60+) will have to collect bank account information on reportable persons (namely expatriates and non-residents) and report that information to tax authorities in other countries when requested. Canada has signed the multilateral competent authority agreement, and will conduct its first exchange in 2018.

http://www.oecd.org/ctp/exchange-of-tax-information/MCAA-Signatories.pdf

So come 2018, don't think you can evade Canadian tax obligations by earning income in a Swiss bank or brokerage account, because the CRA will be able to get relevant information from the Swiss tax authorities.


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## fatcat (Nov 11, 2009)

Robillard said:


> This is a bit off topic, but the OECD has finished work on the common reporting standard, which you can think of as kinda like global FATCA, with less of the extra-territoriality. Basically, the tax authorities in every country that has agreed to take part (right now 60+) will have to collect bank account information on reportable persons (namely expatriates and non-residents) and report that information to tax authorities in other countries when requested. Canada has signed the multilateral competent authority agreement, and will conduct its first exchange in 2018.
> 
> http://www.oecd.org/ctp/exchange-of-tax-information/MCAA-Signatories.pdf
> 
> So come 2018, don't think you can evade Canadian tax obligations by earning income in a Swiss bank or brokerage account, because the CRA will be able to get relevant information from the Swiss tax authorities.


of course, this is part of the New World Order

fatca and her homely cousin are here to stay 
a court ruling may slow them down but they will be back

every country in the world needs tax revenue

i just hope we start to make progress on reporting itself because the forms is what will kill us


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## diharv (Apr 19, 2011)

RCB said:


> diharv, was that $30,000 all tax prep bill, or does it include renunciation fees or tax and penalties?


Most of the cost was the accounting firm tax prep fees .Added complication was having a corporation so Form 5471 in addition to all the other ones drove up cost. I did the F(u)BARs myself. Some years I did have to pay some tax so I probably paid around $5000.00 USD in actual taxes owing and some interest on tax owing from past years.However all failure to file and late penalties were waived but the interest was still calculated and owed. Filed from 2009 to now 2014 for my last return. I relinquished , not renounced so I left the consulate with $400.00 still in my pocket . Oh I also got audited as 2009 was a screwy year as that was also where most of the tax owing came from.Hence more accounting fees to straighten that mess out. Note that filing an amended return is likely to trigger an audit which was what happened for 2009 and they also did 2010 and 2011 for good measure . All in all it has been a very painful experience both financially and emotionally but I hope I am free now . Once my latest filings clear I should be all done and I look forward to not having to dread opening tha mailbox.


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## RCB (Jan 11, 2014)

Thanks for that information, diharv.

For those interested, the judge for the summary trial has stated he will attempt to have a decision for this portion of the litigation against the Canadian government by September 13, before the info is due to flow from CRA to the IRS.


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## RCB (Jan 11, 2014)

Canada Court Ruling Could Put The Brakes On FATCA

http://www.bna.com/canada-court-ruling-n17179935093/


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## fatcat (Nov 11, 2009)

RCB said:


> Canada Court Ruling Could Put The Brakes On FATCA
> 
> http://www.bna.com/canada-court-ruling-n17179935093/


this isn't even correct



> That would also mean that Canadian taxpayers' other accounts, including registered retirement savings plan accounts and tax-free savings accounts, would lose the exemptions provided in the IGA and would be reportable to the IRS, Demner told Bloomberg BNA in an e-mail.


tfsa's are reportable to the irs, there is no exemption for tfsa

i give this about a 1 in 4 chance of winning

it would be entertaining for awhile if it suceeded and then they will replace it with something more onerous


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