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Canada signs FATCA treaty

Canada signs FATCA treaty

Old Feb 28th 2014, 12:34 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by MarkG
Except America is bankrupt, and needs all the tax money it can get. Better to get it from people who don't live in America than those who do.
Right - while placing the financial cost of finding/reporting/collecting it on foreign governments and financial institutions. It's a win-win for the US.
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Old Feb 28th 2014, 12:41 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by MarylandNed
Regardless of these issues, doesn't it just seem right to clarify the citizenship status of yourself and your kids anyway?
In a word, no. Nothing is always a clever thing to say and often a clever thing to do.

If one has the degree of paranoia required to think that Americans will turn up on the doorstep and claim one in the manner of a press gang then surely one should also think that making oneself known to the Americans will result in immediate hauling away to Gitmo and a life of slave labour in lieu of past taxes.
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Old Feb 28th 2014, 1:34 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by dbd33
In a word, no. Nothing is always a clever thing to say and often a clever thing to do.

If one has the degree of paranoia required to think that Americans will turn up on the doorstep and claim one in the manner of a press gang then surely one should also think that making oneself known to the Americans will result in immediate hauling away to Gitmo and a life of slave labour in lieu of past taxes.
The mother and kids don't have to make themselves known to anyone. The letter is typed up, signed, witnessed and stored away in case it's ever needed in the future. That's it.
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Old Feb 28th 2014, 1:42 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by JAJ
I'm all in favour of preparing for a future that may be different from the present, but really ... who's actually going to ask? The United States is not likely to start assuming that those with U.S. parents are citizens, and entitled to all the benefits of United States citizenship when a substantial number of those with American parents aren't even U.S. citizens to begin with.
Huh? What else, other than exactly what you dismiss as fanciful, is the purpose of FATCA?
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Old Feb 28th 2014, 3:11 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by JAJ
I'm all in favour of preparing for a future that may be different from the present, but really ... who's actually going to ask?
The bank is going to ask, that's what this thread is about. Read the treaty. When you open a bank account in Canada they ask what citizenship you are. The treaty says financial institutions look for indicia. One of those indices is a US birthplace. "What citizenship are you?" "I'm Canadian, here is my passport to prove it." "Oh it says here you were born in the US, are you a US citizen?"

It's far from far-fetched.

Unambiguous indication of a U.S. place of birth;
Sooner or later that is going to happen.

Last edited by Steve_; Feb 28th 2014 at 3:14 pm.
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Old Feb 28th 2014, 3:41 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by Steve_
The bank is going to ask, that's what this thread is about. Read the treaty. When you open a bank account in Canada they ask what citizenship you are. The treaty says financial institutions look for indicia. One of those indices is a US birthplace. "What citizenship are you?" "I'm Canadian, here is my passport to prove it." "Oh it says here you were born in the US, are you a US citizen?"

It's far from far-fetched.



Sooner or later that is going to happen.
I think it improbable that a Canadian, born in the US, would use a passport to establish identity at the bank. For a start, I don't imagine many non-immigrant Canadians have passports. He or she would likely use a driving license and, if asked nationality, would say, simply, Canadian. I doubt the bank teller would ask further.

If the teller were to be aware that the US government wanted him or her to start poking into the status of new customers in Canada, do you think he or she would be likely to do so? I say not. Assuming the teller to be Canadian, he or she is defined by being proudly not-American. He or she certainly has no incentive to bother a customer by disputing the customer's nationality.

Maybe, if you're a fugitive billionaire fraudster who's face has been splashed across the papers in front of a Stars and Stripes a bank teller in Canada would take an interest in you, but most bank customers are not.
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Old Feb 28th 2014, 4:05 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by dbd33
I think it improbable that a Canadian, born in the US, would use a passport to establish identity at the bank. For a start, I don't imagine many non-immigrant Canadians have passports. He or she would likely use a driving license and, if asked nationality, would say, simply, Canadian. I doubt the bank teller would ask further.
I know I've used my passport at the bank and I've seen other people do it. Less likely than using a DL I'm sure but far from "improbable".

If the teller were to be aware that the US government wanted him or her to start poking into the status of new customers in Canada, do you think he or she would be likely to do so? I say not. Assuming the teller to be Canadian, he or she is defined by being proudly not-American. He or she certainly has no incentive to bother a customer by disputing the customer's nationality.
If you're required by law and training to do it, why wouldn't you?

In the treaty there is an exemption for accounts under $50,000 but that's not exactly an enormous limit.

I would be very surprised if zero US-born Canadians who aren't billionaires aren't caught out by this new treaty. Otherwise there would be no point to the requirement, would there?
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Old Feb 28th 2014, 5:21 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by dbd33
I think it improbable that a Canadian, born in the US, would use a passport to establish identity at the bank. For a start, I don't imagine many non-immigrant Canadians have passports. He or she would likely use a driving license and, if asked nationality, would say, simply, Canadian. I doubt the bank teller would ask further.

If the teller were to be aware that the US government wanted him or her to start poking into the status of new customers in Canada, do you think he or she would be likely to do so? I say not. Assuming the teller to be Canadian, he or she is defined by being proudly not-American. He or she certainly has no incentive to bother a customer by disputing the customer's nationality.

Maybe, if you're a fugitive billionaire fraudster who's face has been splashed across the papers in front of a Stars and Stripes a bank teller in Canada would take an interest in you, but most bank customers are not.
This is a new law. It doesn't matter what happened historically. To comply with FATCA from July 1st 2014, Canadian banks are going to have to start identifying customers with possible ties to the US. Do you seriously think that they are not going to start checking if new customers are US citizens? They don't even need the immigration expertise to determine if someone is a US citizen. Just seeing that someone was born in the US is enough to identify the customer as someone who might have US tax obligations and report that fact to the IRS in the US.
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Old Feb 28th 2014, 6:41 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by MarylandNed
To comply with FATCA from July 1st 2014, Canadian banks are going to have to start identifying customers with possible ties to the US. Do you seriously think that they are not going to start checking if new customers are US citizens?
I do think that. It may be that someone opening a US dollar account in a border town such as Niagara Falls while wearing a stetson and bar boots would attract attention as a potential American but, even if the clerk knew of this regulation, I think it questionable that it would be actioned. Someone dressed in plaid who walks into a bank in Guelph and says "I need an account, eh?" is not going to be probed.

Do you think the banks are going to start investigating existing customers? Should I expect a knock on the door, "Mr. dbd, we see you've often driven around with CO plates, are you now or have you ever been an American?". I'll accept that banks employ a lot of lovers of administrivia but this is all rather silly, even bankers have better things to do.
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Old Feb 28th 2014, 6:46 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by Steve_
I would be very surprised if zero US-born Canadians who aren't billionaires aren't caught out by this new treaty. Otherwise there would be no point to the requirement, would there?
I suppose there are four points to the requirement:

- the US suspects a few rich citizens to be living in Canada and avoiding taxes, the US government would like that tax money

- the US wants to send a message that nowhere, not even Moose Jaw, is beyond the reach of the IRS

- the US is always interested in hegemony

- Canada is always interested in seeming to be compliant with US wishes.

Joe Public need not be much troubled by any of it.
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Old Feb 28th 2014, 7:48 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by dbd33
I do think that. It may be that someone opening a US dollar account in a border town such as Niagara Falls while wearing a stetson and bar boots would attract attention as a potential American but, even if the clerk knew of this regulation, I think it questionable that it would be actioned. Someone dressed in plaid who walks into a bank in Guelph and says "I need an account, eh?" is not going to be probed.

Do you think the banks are going to start investigating existing customers? Should I expect a knock on the door, "Mr. dbd, we see you've often driven around with CO plates, are you now or have you ever been an American?". I'll accept that banks employ a lot of lovers of administrivia but this is all rather silly, even bankers have better things to do.
Yes! That's exactly what they will do doing!

http://www.cbc.ca/news/canada/fatca-...-law-1.2493882

"Under the law, banks from around the world will be asked to sift through their accounts to look for clients with U.S. connections, then share that information with the U.S. Internal Revenue Service.

Who is affected by this law?

The short answer is almost every Canadian. It is expected to cost banks substantial amounts of money to implement the systems required to find residents with U.S. connections, costs the banks may well pass along to all their clients. Some estimate it could cost $100 million for each financial institution. Those directly affected by the law include dual citizens, Canadians with Green Cards and some snowbirds who spend considerable time in the U.S."
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Old Feb 28th 2014, 11:27 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by dbd33
Do you think the banks are going to start investigating existing customers?
You work in IT, yeah? And so does Ned.

It's an SQL query, they already asked in the past. Five seconds, export into a CSV file, e-mail to IRS. Every bank I've dealt with in Canada asks your citizenship and has a field in their account information for it.

There's no doubt people are going to get caught out by this, the only real question is how many.

What we were talking about is people who haven't claimed to be US citizens for awhile, that's a less black and white issue because the bank won't necessarily have that in their database because the customer has never claimed it. But the bank could find out, place of birth listed in a passport would be one way.
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Old Mar 1st 2014, 2:30 am
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Default Re: Canada signs FATCA treaty

Originally Posted by Steve_
You work in IT, yeah? And so does Ned.

It's an SQL query, they already asked in the past. Five seconds, export into a CSV file, e-mail to IRS. Every bank I've dealt with in Canada asks your citizenship and has a field in their account information for it.

There's no doubt people are going to get caught out by this, the only real question is how many.

What we were talking about is people who haven't claimed to be US citizens for awhile, that's a less black and white issue because the bank won't necessarily have that in their database because the customer has never claimed it. But the bank could find out, place of birth listed in a passport would be one way.
Except that place of birth is not normally asked for to open a bank account, nor is a passport, necessarily. So it would involve a lot of manual searching, which they may do, but only for million dollar balances. And they won't be sending anything to the IRS, at most it will go to the CRA who may share it with the IRS.

I don't think anyone is disputing that in general, Canadians with a U.S. birthplace (or who have been registered as U.S. citizens, or otherwise claimed U.S. citizenship) should resolve whether they are or are not U.S. citizens. However, it appears to be an over-complication to suggest it should be high priority for an elderly Canadian citizen who has not used U.S. citizenship for 50 years.

And it is far fetched to suggest that those who have a U.S. born parent will be even identified as such, let alone assumed to be U.S. citizens, when United States law requires a preponderance of evidence in support of such assertion to be shown.

Last edited by JAJ; Mar 1st 2014 at 2:33 am.
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Old Mar 1st 2014, 4:19 am
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Default Re: Canada signs FATCA treaty

Originally Posted by JAJ
Except that place of birth is not normally asked for to open a bank account, nor is a passport, necessarily. So it would involve a lot of manual searching, which they may do, but only for million dollar balances. And they won't be sending anything to the IRS, at most it will go to the CRA who may share it with the IRS.

I don't think anyone is disputing that in general, Canadians with a U.S. birthplace (or who have been registered as U.S. citizens, or otherwise claimed U.S. citizenship) should resolve whether they are or are not U.S. citizens. However, it appears to be an over-complication to suggest it should be high priority for an elderly Canadian citizen who has not used U.S. citizenship for 50 years.

And it is far fetched to suggest that those who have a U.S. born parent will be even identified as such, let alone assumed to be U.S. citizens, when United States law requires a preponderance of evidence in support of such assertion to be shown.
Why do you keep going on about what normally happens? What has historical norms got to do with this? This is a NEW law that Canadian financial institutions are going to have to comply with from July 1st 2014 if they don't want to suffer the consequences. So what if place of birth or citizenship info has or has not normally been asked for? FATCA means that there will be a good reason to ask for any information that could point to possible US financial ties and tax liability. Policy changes are obviously needed to comply with FATCA so talk about current policies is meaningless.

Last edited by MarylandNed; Mar 1st 2014 at 4:26 am.
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Old Mar 1st 2014, 5:16 pm
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Default Re: Canada signs FATCA treaty

Originally Posted by MarylandNed
Why do you keep going on about what normally happens? What has historical norms got to do with this? This is a NEW law that Canadian financial institutions are going to have to comply with from July 1st 2014 if they don't want to suffer the consequences. So what if place of birth or citizenship info has or has not normally been asked for? FATCA means that there will be a good reason to ask for any information that could point to possible US financial ties and tax liability. Policy changes are obviously needed to comply with FATCA so talk about current policies is meaningless.
Out of interest - have you read the Canada/U.S. FATCA agreement? The actual obligations on banks are much less than what is suggested on this thread. No reporting on anything less than $50k, limited electronic searches for amounts less than $1m, and so on. And nothing in the agreement obliges banks to actively seek out potential U.S. citizens among their customers if their records do not indicate any U.S. ties.

The reaction in Canada, or at least among a section of Canadian opinion, is way out of proportion to what the Agreement involves.
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