Report on March 26 Ottawa Centre meeting on FBAR and FATCA

As announced on another thread, there was a public meeting organized by Paul Dewar MP (NDP, Ottawa-Centre) to discuss FBAR and FATCA on the evening of March 26.  I attended that meeting, along with at least two other Brockers (Deckard and Pacifica).

I am attaching in PDF format my two-page summary and impressions of the meeting.  I delayed posting this until Deckard and Pacifica both had a chance to look at a draft and give me some comments on it.  However this is my summary, from my own notes and memory, and they certainly are free to exapnd on or disagree with anything in it.

I am posting this on a new thread because the previous one seems to have wandered off into other areas, and I didn’t want this summary to get lost in the shuffle.

As mentioned in the report, Pacifica printed, and we distributed at the meeting, some business cards containing the Isaac Brock Society web address.  I would like to offer a special welcome to the Brock Society website to any new visitors who are here by virtue of having picked up one of those cards.

Members of Democrats Abroad or any US citizen eligible to vote from Canada in a Democratic primary are urged to read the information on the second page of this report.

Schubert’s report on March 26 2012 FBAR-FATCA meeting in Ottawa

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28 thoughts on “Report on March 26 Ottawa Centre meeting on FBAR and FATCA

  1. @Schubert1975,Deckard and Pacifica

    Thank you so very much for attending the meeting. Schubert, that you for the info, sounds like we may have some hope after all..Thank you Pacifica for handing out the Business Cards for IBS, I am sure this site will help alot of people. We need to all stick together!!

  2. Thank you, Schubert, Pacifica and Deckard. I’m glad you were there to be our voice. Happy that you think they were listening and understand our position.

  3. As Schubert mentioned, we distributed business cards at this event. We put some on the entrance/information table and the refreshment table as well as giving them to the speakers.

    I was planning to make an announcement at the question period. But as luck would have it, I just happened to be standing by the info table at the front of the room, when an exasperated voice in the audience said, “Is there some kind of internet support group for us?” So, I took the cue, held up a card, “Yes, there is!” and gave a one-minute description of the Isaac Brock Society.

    People seemed quite interested. I estimate about 50-60 of the cards I put out were taken, and Schubert and Deckard also distributed cards.

    I strongly suggest you do the same when attending such an event in your area. For your convenience, I have posted a sheet of cards on this site. These are on Avery #38871, 10 cards to a sheet.

    I estimated about 110-120 people attended the event.

  4. @Schubert, Deckhard and Pacifica

    Thank you so much for your efforts and especially for doing “outreach” via the business cards. Smart!

    Off the top of my head, our best-known cases (Just Me, Moby, et al), do not include any Canadians. Any ideas how we can elicit any responses to give to the NDP? Question period. That would be fantastic!

  5. @JustMe

    Even though you aren’t an NZ Citizen yet have you considered contacting your local MP in New Zealand(I suspect the NZ Greens like our NDP might be really be interested in this story if they were educated about it). Also if you don’t mind me asking who is your NZ MP? Is it a big name like Bill English or Phil Goff?

  6. No one of high visibility of big name. It is Mike Sabin of the National party out of Whangarei. I have not contacted any of them, but maybe I should try.

    I do have an introduction to one business reporter at the New Zealand Herald who I have been meaning to approach and see if there is any interest. Also, I am having dinner tomorrow night with Farmer John, who has been active in Northland politics through the years. He is a bit down on US imperialism ever since he read Jon Krakauer’s book “Where Men Win Glory: The Odyssey of Pat Tillmanon” He came down to see me all steamed up over it, and rather than cool him down, I gave him “Charlie Wilson’s War”. 🙂

    He is very much opposed to the drive by some in the Nationals for a US for a Free Trade agreement which he is convinced will screw New Zealand, so I plan on plying him with questions as to who he thinks might be interested in the FATCA subject.

    Thanks for the suggestions.

  7. @JustMe

    As an aside I don’t why NZ is negotiating a trade agreement with the US given NZ already has agreements with most of Southeast Asia, Australia, China, the Gulf Cooperation Countries(Saudi Arabia et all) and is currently negotiating an agreement with Russia. My understanding is the US is demanding much more for example than Russia is and is unwilling to give Fonterra access to the US market something that Russia is very much willing to give.

    Let me see what I can find out about Mike Sabin.

  8. @JustMe

    I was actually skimming the US New Zealand Tax Treaty tonight here in Canada. Couple of things I noticed:

    1. There does not appear to be ANY provisions for NZ to collect tax on behalf of the US unlike with Canada

    2. The NZ treaty is slightly newer(2008 vs 2007)and appears to have some provision that protect the US’ right to tax its citizens living in New Zealand to a greater extent than what exists in the US Canada treaty. I am becoming convinced the US does fear in the medium term some type of treaty claim by a non resident dual national over the US’ taxation powers.

    3. There are also some provisions that appear to allow a renounced US citizen living in NZ who had to pay exit tax to claim an NZ foreign tax credit.

  9. @Tim…

    I don’t know enough about the whys and wherefores to comment. I do know another American of influence nearby here who is actively involved in trying to persuade farmer John that it is a good idea. I will have to ask more this weekend..

    This may be information that he is getting from the American Chamber of Commerce in New Zealand. I just got their news letter, so I need to read more and see what they are up to. Maybe Farmer John is confused and he is referring to the “Trans Pacific Partnership free trade agreement” which would include both Australia and New Zealand.

    I did notice a comment about FATCA, By Gina Wallace, Director of NZ US Tax Specialists and Enrolled Agents. That gives me an opportunity to make a contact, so will follow up…

    Since you seem to be very interested in these types of things, here is the link.

    http://www.amcham.co.nz/sites/default/files/Amcham%20newsletter2012%202_0.pdf

    Here is one comment on FATCA that mentions the “pandemonium”

    “The IRS and the Treasury continue to work with affected parties including foreign governments in the wake of global pandemonium created over FATCA. An intergovernmental agreement is now in force between the United States and France, Italy, Germany, United Kingdom and Spain. The agreement provides a less stringent framework for reporting on an annual basis by the governments of these countries to the United States. In exchange these countries receive a certain reciprocity privilege as regards disclosure of United States accounts held by citizens of these countries.”

    BTW, I think I am going to start following the NZ Ambassador to the US on twitter and may drop him a FATCA question. He doesn’t have many followers or tweets, so he might actually see it. I just discovered that he has bought a place from Dover Samuels in a very close by community called Mautari Bay. Dover is a colorful character of some notoriety here in the Northland.

    Cheers

  10. @JustMe

    Yes, however you have to look at the latest amendments from 2008. There is a section I know some in the Canadian government are looking at that deals with recipricality of “burden” in particular MP John Weston who is Finance Minister Flaherty’s point man on recent US tax issues. In the NZ treaty there is specific language to say this section should not effect the right of the US to tax its non resident citizens however, in the Canada treaty there is no such language.

    I’ll also note that Green Card holders residing in both Canada and NZ can in theory use the treaty to get themselves out of the US tax net. However, they have to file form 8854 just like expatriating citizens but they select a specific option to assert treaty rights. In “theory” a Green Card holder resident in NZ could thus claim to be solely NZ resident and “keep” their Green Card. However, it is unknown how the US INS would view someone doing this.

    Is the NZ Ambassador to the US still former Prime Minister Michael Moore?

  11. @JustMe

    I got news for you. The head of the New Zealand Bankers Association just came out and said that NZ Banks at this point in time CANNOT comply with FATCA will have to be withheld unless an agreement can be reached between Wellington and Washington. He says NZ law does not allow FATCA compliance currently and goes onto say NZ law “could” be changed but that the bankers association is not calling on the government to do that at this time. Instead he seems to wants joint front with Australia, NZ, and Canada to negotiate a FATCA agreement.

    http://www.nzba.org.nz/news-and-media-releases-publications/articles/fatca-washington-s-tax-initiative-takes-on-the-world/

  12. Great find Tim….

    Thanks for that. I think I will use that for the Herald Reporter I am going to contact. It is a scanned copy of a magazine and hard to read, but I have printed it out and with a magnifying glass it is probably decipherable.

    I don’t see any reporting on this statement by NZBA yet in the NZ Herald, and nothing in Interest.co.nz…

    But did find this…,and have sent a message to Garth Vaughn as he is one that seems knowledgeable on FATCA and see what he thinks about this NZBA statement..

    http://www.interest.co.nz/news/57852/concessions-nz-building-societies-and-credit-unions-draft-big-brotheresque-us-crackdown-t

    I like his title characterization… Big Brotheresque That might tell me something about his attitude toward FATCA.

    Thnx for drawing this to my attention. You do good work!

  13. @Tim…
    Re “Is the NZ Ambassador to the US still former Prime Minister Michael Moore?”

    Yes, you can follow him on twitter @NZAmbassadorUS

  14. @Tim…

    I see there is some fight in the NZ readers of interest.co.nz

    Here are a couple chuckles…

    “This will be John Key’s “David Lange” moment .. an opportunity to give the US the two fingered salute and thus fulfill his dream of turning New Zealand into a Financial Hub”

    ” breach New Zealand’s Privacy Act.”
    ie Its illegal. Just say NO. now.
    bloody unconstitutional wankers.

    LOL

  15. Found a reference to the Ottawa 26 March meeting on the financial webring forum, along with a mention of Brock.
    financialwebring.org/forum/viewtopic.php?f=32&t=11

    “Postby millergd » 27 Mar 2012 11:11

    “snowback96 wrote 06 Mar 2012:Anybody interested in learning more about the IRS’ mistreatment of US citizens that live outside the US (i.e. dual citizen Canadians) should check out http://isaacbrocksociety.com/. Lots of good information, although much of it will make your blood boil. Many of the posters on this forum have been horribly wronged and make strong cases for renunciation. I strongly recommend that any “US persons” spend some time on this site to learn more.”

    “They were handing out cards at a presentation done by Paul Dewar (NDP MP, Ottawa Centre) yesterday night.
    There were a helluva lot of average Joe’s present who are realizing that they, by being US citizens, are involuntarily walking into a wrath of bureaucratic entanglement with the IRS’ upcoming FATCA regulations. I have been fortunate to have had my IRS & Treasury Department filings current, but the gaze from many in the audience made it apparent that there are a lot of scared people right now.””

  16. It’s a radical idea…..set up a couple of screens or flatscreens and invite Timothy Geithner, Carl Levin, Doug Shulman, and the other idiots to a live webinar where you can hold a “town meeting” as to why citizenship-based taxation is a good idea!

    If they won’t come how about the so-called Senators and Congressman/woman who support IBS-like thinkers perhaps they would like to do a webinar town meeting?

    Also there’s going to have to be some coordination worldwide between the bloggers, US-citizen groups (like ACA), American Chamber of Commerces, and others to push FATCA up the political agenda in different countries.

    Questions –

    1. How do we contact US citizens in each country to gage their response to FATCA in a bigger way? I suspect some won’t care, some will be outraged, and some indifferent.

    – Group Hardcore – the “hardcore” is going to be US citizens abroad (for many years in most cases) with no US assets, and few US links most aggrieved, have no plans of moving back to the US and can see the US for what it is from a “foreigner’s point of view.”

    – Group Maybe – US citizens who are still “trapped” in the US system with either property, 401Ks, or investment accounts in the US who feel they can’t upset the IRS without financial penality to themselves, but are in no rush to move back to the US because they’ve found you can “live abroad and enjoy it.”

    – Group Never – US citizens just “backpacking” or temporarily abroad and intend on moving back to the US because it’s the best country on earth and they can’t either accept or adapt to foreign culture.

    This is thinking outload, but unless more countries become like “Canada” and don’t accept being FATCAised, you’re going to wake up some morning and find out your local government is trying to force you to file a 1040 by becoming the IRS overseas tax collector.

  17. @JustMe

    Its hard to say what the true and final position of the New Zealand Bankers Association but my sense was the tone of that article was much more complain and not comply than complain and comply. I will also say the Australian Bankers Association on behalf of both Aus and NZ has been out front on this since it was only a proposal.

  18. In response to JustMe and Tim, FATCA is a franchise. What the US government is doing is making the entry requirements to the franchise less onerous (therefore less fightening, very little hassle), but as sure as night comes after day, once the US feels they have enough FATCA franchises onboard they’re start to tighten the requirements (lower reporting thresholds, higher withhold tax, more reporting, tighter pass-thru payment requirements) – don’t get sucked in to this FATCA franchise. The US is basically trying to control all the dollars circulating in the world, and other currencies controlled by US citizens- it’ll only work if other countries cede their financial sovereignty to the US.

  19. @John….

    I think you are absolutely right when you say this:

    “but as sure as night comes after day, once the US feels they have enough FATCA franchises onboard they’re start to tighten the requirements (lower reporting thresholds, higher withhold tax, more reporting, tighter pass-thru payment requirements.”

    I hate to be the pessimist, (it is my nature) but I do think the article quoting the Hedge fund managers is right…

    http://isaacbrocksociety.com/2012/03/27/a-global-fatca-in-the-future/

    Too many governments, in search of new revenues, will think this reciprocity regime is too attractive to pass up, and a GATCA is in our future. The world can’t even protest enough to stop US wars of preemption. How are they going to wake up and be well enough informed to fight against a war of financial and tax preemption?

  20. Just Me I think you give the US government too much credit for being effective.

    They couldn’t capture bin Laden while he lived in Pakistan for 10 years! Pakistan was their ALLY and only one tiny country, not to mention the fact that they’re totally backwards. How stupid was the American intelligence community that they allowed this to happen?

    If some stuck in the caveman world country like Pakistan can fool the Americans for so long, is it really a stretch to imagine that the world could unite against the US to stop FATCA?

  21. Pingback: The agony of U.S. citizenship for U.S. citizens living outside the U.S. « Renounce U.S. Citizenship – Be Free

  22. @Schubert1975

    I am curious if you wouldn’t mind sharing what the “speculation” was during the meeting in Ottawa as to how Canadian Institutions will comply with the FATCA. I am curious if for anything in terms of just how off base it was.

  23. @omghesstillanamerican, oh my dear Isaac Brock friend, I think you misunderstand me. I think the US government is mostly ineffective in its wars on ( Drugs, Poverty, Terrorism, Women’s reproductive rights, Offshore Tax evasion, no name it.) because it too often approaches the problem with “shock and awe” mentality without any regard to the unintended consequences and collateral damage of its actions.

    Unfortunately, when it comes to this FATCA regime, most governments in the world are probably more than happy to join the “coalition of the willing” due to their particularly dire budgetary and fiscal problems right now. I would hope that I would be wrong. I would love to see an “axis of opposition” coalesce around Canada and would kill this war in its tracks. However, I think I am seeing a trend here that might be unstoppable. Instead we have an axis of 5 EU countries signing up to the US promise of reciprocity regime to replace FATCA FFI reporting to the IRS, and more are countries concluding that they should “complain but comply” or join the 5 nation pack.

    However, I have been wrong before, so willing to concede to you that “that the world ‘could’ unite against the US to stop FATCA”. I just don’t see the evidence, except in Canada right now. The world’s masses aren’t marching in the streets against FATCA. They are marching and rioting against austerity and government budget cuts, and wanting more taxes from the 1% . “Tax the rich” is an easy rallying cry to get behind FATCA! Do your own word association test with any man in the street you meet. Say “offshore account” and what will the response be? I would bet it would be “rich evading taxes!”

    That is the reality we are dealing with.

  24. I have some clients in this situotian also.However, opting out of the VDP and paying the FBAR penalties rather than the 20% VDP penalty still leaves a lot of uncertainty. For one thing, there is the difference between the wilful versus non-willful failure to file FBAR penalty. There’s no certainty that the IRS will stop at only the non-willful penalty ($10k/year). Further, there are a host of additional penalties that the IRS might tack on if the taxpayer leaves the VDP, including failure to file penalty, filing a false return penalty, fraud penalty, penalty for failure to file a related return (e.g., if the foreign funds were held in the name of a foreign corporation or trust), etc.I’m not saying that the 20% penalty is the better deal; it may or may not be. I’m suggesting that at least the 20% gives the taxpayer a cap, whereas leaving the VDP can have very serious consequences. At a minimum, a full-scale audit. And of course, criminal consequences are no longer off the table if the taxpayer leaves the VDP.

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