Category Archives: ADCS FATCA Canada lawsuit

@ADCSovereignty #FATCA Lawsuit Comes To The End Of The Road: Supreme Court of Canada Dismisses Application For Leave To Appeal

Background

The Alliance For The Defence Of Canadian Sovereignty FATCA lawsuit commenced in 2014. It was an incredible initiative which was “crowd funded” by hundreds (if not thousands) of individuals. The lawsuit was commenced by courageous plaintiffs who have been the face of the lawsuit for almost ten years.

A backgrounder on the case is available here.

A backgrounder on the decision of the Federal Court of Appeal is here.

The reasons for why the lawsuit was necessary are evident in this video:

July 13, 2023 – Supreme Court Of Canada Dismisses Application For Leave To Appeal

The order dismissing the appeal, which results in the official ending of this lawsuit is here.

Here is a colourful pdf of the final order:

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A series of posts describing various points in the long history of this lawsuit may be found here.

John Richardson – Follow me on Twitter @Expatriationlaw

Appendix

The difficulty in framing the narrative is exemplified in the following “Canadian Press” article and the comments to the article …

Federal Court Of Appeal Upholds Trial Decision Ruling Canada/US FATCA IGA Is Constitutional

Circa 2014

In June of 2014 the plaintiffs in the ADCS (“Alliance For The Defence Of Canadian Sovereignty”) lawsuit launched their legal challenge to the constitutionality of the Canada US FATCA IGA. The proceedings have gone through a Federal Court hearing in 2015, a second Federal Court hearing in 2019 and the Federal Court Of Appeal hearing in 2022. It has been a “long haul” and the plaintiffs (Ginny, Gwen and Kazia) – true unsung heroes in life – deserve the thanks of all Canadians.

On September 21, 2022 the Federal Court of Appeal dismissed the appeal from the trial decision (which ruled against the plaintiffs).

In other words, the US FATCA law continues to be endorsed by the Canadian courts as being the law of Canada too.

Every human being is a minority somewhere. US citizens living outside the United States are a minority wherever they live. Furthermore, because of FATCA (the tool to enforce citizenship taxation) they will ALWAYS have fewer rights than others in their country of residence. What is astounding is that the United States is ensuring that it’s own citizens are subject to discrimination! Such are the effects of citizenship taxation.

The advancement and protection of the rights of minority groups is always a marathon and not a sprint. It requires the relentless dedication to the goal of achieving justice. At this moment I would like to recognize and thank Patricia Moon, Carol Tapanila and Stephen Kish for their tremendous efforts, personal sacrifices and focus on this cause.

It’s also important and appropriate to recognize the support of the hundreds of anonymous people who contributed financially (in some cases their pension payments) and in other cases their encouragement that this legal challenge was necessary.

The next decision is whether to seek leave to appeal to the Supreme Court Of Canada.

I will write more about this in the next few days. What follows is a copy of the decision.

A-370-19_20220921_R_E_O_OTT_20220921132516

Those wishing to better understand the history, purpose and progression of this lawsuit might go here:

https://adcsovereignty.wordpress.com/the-summary-trial-book-of-posts/

John Richardson Follow me on Twitter @Expatriationlaw

Be Careful Of Faulty Logic Claiming FATCA And The CRS Are Similar: Seven Ways They Are Not

Prologue

For those more interested in logic than in FATCA, you will find a discussion of the logical fallacy here.

Introduction

Last week I participated in a group discussion about FATCA and its effect on Accidental Americans. It’s difficult to have a discussion about FATCA that doesn’t include the CRS (“Common Reporting Standard”). Neither FATCA nor the CRS is well understood. That said, an introduction of the CRS into a discussion about FATCA detracts from a consideration of how FATCA impacts Accidental Americans (and others). Furthermore, there is a generalized assumption that the CRS is a positive development. Associating FATCA with the CRS enhances the “illusion” that FATCA is also a positive development.

In part, the discussion assumed that:

– FATCA (U.S. “Foreign Account Tax Compliance Act”) and the OECD CRS (“Common Reporting Standard“) were similar kinds of information exchange agreements; and

– To attack/criticize FATCA would be to criticize and have the effect of weakening the CRS.

These are absurd claims which are based on faulty logic. The faulty logic is that because FATCA and the CRS overlap in one aspect that they are functionally equivalent in intent, effect, purpose and other aspects. The argument appears to be based on the following reasoning:

Continue reading

@ADCSovereignty #FATCA Appeal – March 30, 2022 – Reporting On The Hearing In Twitter Time

As reported by American Expat Finance and the Isaac Brock Society, the ADCS-ADSC.ca FATCA appeal was heard on March 30, 2022.

As I watched the hearing I tweeted my thoughts. Win, lose or draw the goal is to get the case before the Supreme Court of Canada. Therefore, today’s appeal should be seen as an important step down that road.

I suggest that you:

1. Read this summary of the ADCS FATCA lawsuit to understand the context

2. Read this article from a Canadian law firm which references the FATCA lawsuit

3. Read the article at American Expat Finance

4. Click on the link below to see my thoughts and observations as the hearing unfolded.

https://threadreaderapp.com/thread/1509210940167892997?refresh=1648676869

In addition, a bit more history on this lawsuit …

John Richardson – Follow me on Twitter @Expatriatonlaw

John Richardson Interview With Danielle Smith About FATCA and @Citizenshiptax

On November 12, 2019 CBC Reporter Elizabeth Thompson published an interesting article. The article, reported that “Nearly a million bank records sent to IRS“. Ms. Thompson’s article is quite brilliant for one simple reason. The article focuses on the fact that it is the bank records of CANADIAN RESIDENTS that are being sent to the IRS. Specifically the article leads with:

Number of government transfers of records of bank accounts held by Canadian residents to U.S. has been rising.

The number of banking records the Canadian government is sharing with U.S. tax authorities under a controversial information-sharing deal has increased sharply, CBC News has learned.
The Canada Revenue Agency sent 900,000 financial records belonging to Canadian residents to the Internal Revenue Service in September — nearly a third more than it sent the previous year. The records were for the 2018 tax year.

It also has updated the number of records shared for the 2017 tax year to 700,000 from the 600,000 originally reported.

“That’s a lot,” said John Richardson, a Toronto lawyer and co-chair of the Alliance for the Defence of Canadian Sovereignty, which is fighting the information-sharing deal. “That’s a lot of files.”

The number of financial records of Canadian residents being shared with the IRS has risen steadily since the information sharing agreement began — from 150,000 in 2014 to 300,000 in 2015 and 600,000 for the 2016 tax year.

Now, that (as reflected in the comments) is what got people’s attention! The article does not focus on FATCA (which is often portrayed in the media as tax evasion law). Rather the article focuses on the effect of FATCA and describes FATCA as:

The information transfer is the result of a controversial information-sharing agreement between Canada and the U.S. that was negotiated after the U.S. government adopted the Foreign Account Tax Compliance Act (FATCA).

The law, adopted in a bid to curb offshore tax evasion, obliges foreign financial institutions to report information about accounts held by people who could be subject to U.S. taxes.

Unlike most countries, the United States levies income taxes based on citizenship rather than residency; some Canadians end up facing U.S. taxes because of an American parent, or because they were born in a hospital on the other side of the border.

The article makes the connection between the transfer of information to the IRS and the imposition of U.S. tax on the holders of those accounts! In other words, this information sharing agreement (called FATCA) is described as being for the purpose of helping the United States of America (that “Great Citadel of Freedom and Justice”) impose direction taxation on Canadian residents. Yes, it’s true.

First, the United States imposes worldwide taxation, according to the U.S. Internal Revenue Code, on certain residents of other countries.

Second, the U.S. Internal Revenue Code imposes a separate and more punitive tax system on residents of other countries (here are 12 different examples) than it does on U.S. residents (“Separate but equal” anybody).

Third, the information sharing agreement (referenced in the article) called FATCA is a tool to enable imposing U.S. taxation on the residents of Canada and other countries.

Fourth, the primary impact of FATCA is on individuals who were born in the United States but do not live in the United States. Individuals experience the impact of FATCA in the following two ways:

1. Impact Via The Tax Compliance Industry: It pressures them to comply with the tax and reporting provisions of the Internal Revenue Code. Some people enter the U.S. tax system and effectively agree to U.S. taxation.

2. Impact Via The Banks: In some countries people have experienced limited access to bank (and other financial) accounts unless they are willing to supply U.S. tax identification numbers.

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John Richardson – Follow me on Twitter @Expatriationlaw

Thoughts on the @ADCSovereignty #FATCA Trial 1: 2015 interview with @AliBrunet underscores which people are primarily affected by FATCA in Canada

What the Canada U.S. FATCA IGA is NOT about

Canada’s FATCA IGA is NOT about information exchange. The United States does NOT exchange information under the FATCA IGAs.

Canada’s FATCA IGA is not about residency. After all the purpose of FATCA is to transfer information from a country where the person DOES actually reside (and is a tax resident) to a country where the person does NOT actually reside (but is deemed to be a tax resident).

What the Canada U.S. FATCA IGA IS about

Canada’s FATCA IGA IS about the Government of Canada surrendering its citizens to the United States (effectively stripping them of their rights as Canadian citizens).

Canada’s FATCA IGA is about assisting the United States in imposing worldwide taxation on Canadian citizens who actually live in Canada, are tax residents of Canada and pay full taxes in Canada. Transition Tax anyone? Do you feel GILTI today? What were you thinking by buying that Canadian mutual fund in Canada?
Canada’s FATCA IGA is NOTHING like the OECD Common Reporting Standard. In simple terms, under the CRS information is transferred from a country where the person does NOT live to a country where he does live.

Yes, Canada’s lawyers spent the week of January 28, 2019 to February 1, 2019:

1. Denying each of these obvious points; and
2. Arguing that Canada that Canada has a constitutional right to betray its citizens by turning them over to the United States.

Post 1 – February 17, 2019:

The U.S. claim of lifetime tax jurisdiction based ONLY on the fact of having been born in the United States

This is based on a post from March of 2015 which was about the number of so called “Accidental Americans” in the Eastern Townships of Quebec.

Let’s start by listening to the CBC interview with Ali Brunette.

Question:

Do these life long residents of the Quebec Eastern Townships (great ski country) seem like U.S. tax evaders to you?

MLex Reporter @PMerrion writes on @ADCSovereignty: "#FATCA regime goes on trial in Canada"

With just two weeks to go before the start of the ADCS-ADSC FATCA lawsuit, U.S. based MLex reporter Paul Merrion has written a nice piece about our upcoming FATCA Canada lawsuit.

The court documents can be accessed on the ADCS-ADSC site. For those who are not up to speed on what has happened so far, you might reference the “FATCA Trial: Law Students Edition” which is found on the Alliance blog.

How we got there – Canada’s Standing Committee on Finance May 2014

2019 – The Trial Begins In the Federal Court of Canada – January 28, 2019

Mr. Merrion’s article contains a nice summary of the legal issues, the impact of the outcome of the decision, a description of the plaintiffs, a summary of the legal issues AND (by discussing Representative Holdings’s 2018 bill) an acknowledgement of the role of “citizenship based taxation”.

You can read his article here which is posted with the permission of MLex® US Tax Watch and attribution to MLex® US Tax Watch.

MerrionFATCATrial (1)

MerrionFATCATrial

John Richardson

You can follow me at: @ExpatriationLaw

Mr. Smyth Goes To Washington: Accidental Americans #FATCA – @ADCSovereignty – @RepHolding bill and More!


Today I had an interesting conversation with veteran FATCA and citizenship-taxation activist Timothy Smyth. There are few people with his depth of knowledge and insight.
He will be in Washington this week. He is the man in above tweet who deserves your support and funding!
Enjoy the insight in his podcasts

Supporters of @ADCSovereignty #FATCA lawsuit might be interested in @RunnymedeSoc Law and Freedom Conference – Jan. 12/19


Canada is a Westminster Parliamentary democracy. Historically it has had a constitution (British North America Act) which defined how Canada was to be governed. In simple terms: the Federal Government has the jurisdiction to legislate in some areas (example criminal law). The Provincial Governments have the right to legislate in other areas (property and civil rights). These laws are made by democratically elected legislatures. Prior to the Canadian Charter of Rights and Freedoms (April 17, 1982), the only limits on the legislative bodies were jurisdictional. Any law could be enacted. It was just a question of whether it was the Federal Government or the Provincial Government that could enact the law.
In 1982 the Charter of Rights became part of Canada’s constitution. The Charter imposed limitations on the powers of elected legislatures. In other words, there were certain areas of activity that were presumptively beyond the reach of legislatures.
The Alliance For The Defence Of Canadian Sovereignty FATCA lawsuit is a Charter of Rights lawsuit against the Government of Canada. Our claim is the Government of Canada does not have the right to enact the legislation which requires banks to (1) Search for customers who are U.S. citizens and (2) then turn their account information over to the U.S. Internal Revenue Service. In general terms the arguments are based on the theory that by so doing the Government of Canada has violated Charter Rights which include the:
– S. 15 Equality rights; and
– S. 8 rights against unreasonable search and seizure
of Canadians.
Essentially the court will be asked to rule that the laws enacted by a democratically elected legislative body (the Parliament of Canada) violate the Constitutional rights of Canadians.
In other words: Does a democratically elected legislature prevail or do the rights of individuals prevail?
Supports of the our FATCA lawsuit might frame the question this way:
Should we have rule by law (the legislature prevails) or rule by justice (the law should be declared unconstitutional)?
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On January 11 and 12, 2019 the Runneymede Society is running its annual law and freedom conference. In general terms, the Conference is designed to debate the question of whether there should be limits on the powers of democratically elected legislatures. If so, what should those limits be? How does S. 1 of the Charter interact with the rights enshrined in the Charter? This should be of interest to all of those who are interested in the ADCS-ADSC FATCA lawsuit.
You can attend the Conference by Facebook and follow the conference on Twitter
Twitter – Hashtag = #RSCON19
Facebook live –


John Richardson