Category Archives: FATCA self certification

December 31, 2019 and US Born individuals living outside the USA without having a Social Security Number

Introduction – “The Little Red FATCA Book”

More at:

The Two Ugly Faces of FATCA – One for foreign banks and another for US persons

The Obligations of the banks under the IGA

These obligations are described in the FATCA IGA entered into between the United States and the other country. In general the IGA requires non-U.S. banks to “Review, Identify and Report” on U.S. citizens.

The Obligations of the individual taxpayer under IRC 6038D – Form 8938
The mandatory reporting which takes place on Form 8938 is mandated Internal Revenue Code 6038D.

Non-US AKA “Foreign Banks” – The Problem of US Born customers who do NOT have a US Social Security Number are they in danger of their bank accounts being closed?

Those accused of being U.S. citizens who are NOT U.S. citizens have the opportunity to “self-certify” they are NOT U.S. citizens

The Possibility of being “Born In The USA” but NOT being a U.S. citizen

The Possibility of being “Born Outside The USA”, acquiring U.S. citizenship at birth but NOT being a U.S. citizen today

Looks like being “Born In The USA” may not be a great thing!

John Richardson – Follow me on Twitter @ExpatriationLaw

#FATCA Trial to take place in January 2019. Plaintiff's Memorandum of Fact and Law in @ADCSovereignty FATCA Lawsuit Filed

Happy Thanksgiving!
As we move into Thanksgiving Weekend, I am pleased to report that the we have reached an important milestone in the ADCS FATCA lawsuit. As you know, ADCS is suing the Government of Canada for enacting a foreign law – the US Foreign Account Tax Compliance Act (“FATCA“) – on Canadian soil. By so doing Canada violated numerous rights found in the Canadian Charter of Rights and Freedoms.  These are Charter rights guaranteed to all Canadians, regardless of where they happened to have been born.
Please take the time to read this important document – the Memorandum of Law – prepared by our lawyers.
2018 10 03 Plaintiffs’ Memorandum of Fact and Law_summary trial_FINAL
We expect the hearing to take place in Vancouver in January of 2019.
The history of our FATCA lawsuit to date
The Government of Canada signed a FATCA IGA with the United States in February of 2014. FATCA became operational in Canada on July 1, 2014. Our lawsuit was also launched in 2014.
1. This video which explains the background leading leading up to Canada’s signing the FATCA IGA

2. See the  FATCA – @ADCSovereignty Book of Posts that I have written which describes the background to and evolution of the lawsuit.
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Thanks to all of you have made this possible!
Our FATCA lawsuit would never have been possible without each of  you. I would like to specifically recognize …
– the generosity of our numerous donors. Incredibly, this has been possible through the donations of ordinary Canadians who have given what they can. Although the amounts donated have been significant to the individual donors, we have not had a single “deep pockets” or Corporate Donor. Thank you again!
– the witnesses and the people who have contributed countless hours of their valuable time
– our plaintiffs: Gwen and Kazia – it takes tremendous courage and conviction to volunteer your name and circumstances to a lawsuit of this type
– our lawyers who have been with us since the beginning
On behalf of the Board of the Alliance For The Defence of Canadian Sovereignty I wish you the best.
John Richardson

Identity theft in a #FATCA and #CRS World: The Role Of the U.S. Social Security Number

Introduction


Her thoughtful post includes:

FATCA Security Risks with Sensitive Data
The Foreign Account Tax Compliance Act, commonly called “FATCA” has caused Americans abroad to be fearful of security risks when their personal financial information is reported by non-US financial institutions or foreign government agencies to the IRS. FATCA reporting will include the name, address and taxpayer identification number of each US account holder at the financial institution; the account number; account balance and value; the account’s gross receipts and gross withdrawals or payments; and other account related information requested by the Internal Revenue Service (IRS). The Treasury Inspector General for Tax Administration has expressed concerns with the security of data transmission as mandated by FATCA.  In September of 2014 the IRS issued a fraud alert to all international financial institutions that are complying with FATCA. Scam artists posing as the IRS have fraudulently solicited financial institutions seeking account holder identities as well as financial account information.  Financial institutions directly registered to comply with FATCA, and those in jurisdictions that are treated as having an IGA in effect to implement the FATCA provisions through their home governments, have already been approached by parties impersonating themselves as the IRS. The IRS now has reports of incidents from various countries and continents.

The most significant piece of information that a U.S. citizen discloses to a “Foreign Financial Institution” under the FATCA IGAs is his/her TIN (“Taxpayer Identification Number”) AKA his “Social Security Number”.
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So, you have received bank letter asking about your tax residence for CRS or FATCA – A @taxresidency primer

Prologue: In the 21st Century, The Most Interesting Thing About A Person Is His/Her Tax Residency

Introduction – So, what’s this “tax residence” stuff about? What does “tax residence” mean?

In 2014, as people started to receive “FATCA letters” I wrote a lengthy post describing “What to do if you receive a FATCA letter“. Information exchange under the Common Reporting Standard “CRS” has begun in 2018. As a result, I am writing this post which is to explain what the CRS is and how it relates to the FATCA letter. It is important to understand that the “CRS letter is actually a combined “CRS/FATCA” letter which is more likely to be received than the original FATCA letter. I urge that those who have received a letter of this type to read this post PRIOR to seeking professional advice!!!

You are reading this post because you have received a letter from your bank that is asking you to identify the countries where you are a “tax resident” and/or whether you are a “U.S. Person”.

The purpose of this post is to help you understand:

– why you are receiving the letter
– what the letter means
– what is the meaning of “tax resident”, “tax residence” and “tax residency” (terms which are used interchangeably)
– why “tax residency” is important to you
– the significance of being a U.S. citizen or Green Card holder
– how to identify where you may be a “tax resident”

Why are you receiving this letter?

The letter is intended to fulfill the bank’s due diligence obligations under both the OECD Common Reporting Standard (all countries of “tax residence” except the United States) and FATCA (whether you are a “tax resident” of the United States).

In other words, the letter is for the purpose of satisfying bank “due diligence” under two separate reporting regimes – FATCA and the OECD Common Reporting Standard “CRS”

This is long post which is broken into the following parts:

Part A – How does FATCA differ from the “CRS”?

Part B – The Combined FATCA/CRS Letter

Part C – “Tax Residency 101”: It’s about where you should be paying your taxes

Part D – Different definitions of “tax residence” – Not all countries define “tax residence” in the same way

Part E – Oh My God! I think I might be a “tax resident” of two countries – What is a “tax treaty tie breaker”? How does a “tax treaty” tie breaker work?

Part F – A “U.S. citizen” cannot use a “tax treaty tie breaker” to break U.S. “tax residence”. How then does a “U.S. citizen” cease to be a “U.S. tax resident”?

Part G – How a “permanent resident” of the U.S. – AKA “Green Card Holder” – ceases to be a U.S. tax resident

Part H – Are you, or have you ever been a U.S. citizen or Green card holder? Sometimes it’s not what it seems.

Part I – “Relinquishments of U.S. citizenship and loss of U.S. citizenship for tax purposes

Part J – Beware! You don’t sever “Tax Residency” From Canada or the United States without being subject to massive “Exit/Departure Taxes!” – You may have to buy your freedom!

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U.S. Citizenship clarification: Time between your actual renunciation and the date your CLN is issued

Two questions that I frequently receive from people who have renounced U.S. citizenship are:
I. An immigration question: What if I attempt to travel to the United States during the period of time between my actual renunciation of U.S. citizenship and actually receiving my CLN (which is my proof of having renounced U.S. citizenship)?
II. A tax question: At what point after I renounce U.S. citizenship do I cease to be treated as a U.S. citizen for U.S. tax purposes? For example, when am I free to sell my house (located outside the USA) and NOT be subject to U.S. capital gains taxes?
Two kinds of U.S. citizenship: How the issuance of a CLN affects (1) U.S. citizenship for Immigration purposes and (2) U.S. citizenship for tax purposes
1. How the issuance of a CLN affects U.S. citizenship for immigration and nationality purposes:
Immigration and Nationality Act S. 349(a) (U.S. Code 1481(a)) make it clear that the issuance of a CLN is completely irrelevant to your status as a U.S. citizen for immigration purposes. A CLN is of value ONLY for the purposes of PROVING that you are not a U.S. citizen.
Therefore, one ceases to a U.S. citizen for immigration purposes on the date of the relinquishing (renunciation) act.
2. How the issuance of a CLN affects U.S. citizenship for U.S. tax purposes
Internal Revenue Code 877A(g)(4) mandates that those relinquishing/renouncing U.S. citizenship after June 16, 2008:
– will continue to be treated as U.S. citizens for U.S. tax purposes until the CLN is actually issued; and
– the date of ceasing to be a U.S. citizen for U.S. tax purposes will be the actual date of the relinquishing act (date of renunciation).
Therefore, (assuming a relinquishing act after June 16, 2008) one continues to be a U.S. citizen for tax purposes until the CLN is issued.
These distinctions are discussed in an earlier post:
Renunciation is one form of relinquishment – It’s not the form of relinquishment but the time of relinquishment
Bottom line: One ceases to be a U.S. citizen for immigration purpose before one ceases to be a U.S. citizen for tax purposes.
Generally people are more concerned with travelling to the USA during the time gap between renouncing U.S. citizenship and before receiving a CLN. Fortunately, we have a “guest post” written by someone who has just experienced this issue from the Immigration perspective. He has shared his thoughts as follows:

Travel Limbo? Keep calm and CLN on.
Recently, I found myself in a potentially sticky situation enroute to a holiday in the U.S while at a Canadian airport. My Canadian passport showed a U.S. birthplace and before allowing me
through, the U.S. Border Officer wanted me to show my Certificate of Loss of Nationality (CLN) or an American passport.
Although I had renounced my U.S. citizenship several months earlier, the U.S. Department of State had not yet issued my CLN. Before this experience, I had always been able to cross the border to the U.S. with my Canadian passport (the only passport I’d ever had).
Fortunately, the situation didn’t escalate. I attempted to give the officer a simple explanation that I had renounced at a U.S. Embassy many months before but the approved CLN had not been couriered in time for my trip. If he would permit me, I would show him my email correspondence with the U.S. embassy.
The officer accepted my explanation. Before he waived me through, I asked if he had any advice to share with anyone caught in travel limbo without their CLN.
Hopefully, his comments will help others to navigate a soft landing:
Keep calm
There is a line-up of people behind you. This is not the time to be outraged or to educate agents about the plight of Accidental Americans or dual citizens.
Show proof
Travel with a copy of your CLN. If you’re still waiting for it, carry a copy of Form DS-4080 (the form you sign when you renounce and swear an oath at a U.S. Embassy). Keep copies on your phone.
Provide a reasonable explanation
If you accidentally forget your documents or booked a trip before your CLN arrives, a simple description of the renunciation process and the long wait times for the approved CLN to arrive will hopefully be reasonable enough to a reasonable officer.

Thanks to our guest blogger for the relaying the above experience!
John Richardson

The Little Red #FATCA Book – (Review, Identify and Report on “U.S. Persons”) – How FATCA affects the non-U.S. World

About FATCA – The “worst law nobody has heard of” …
FATCA (The Foreign Account Tax Compliance Act) was signed into law – as a revenue offset provision to the Hire Act – in March of 2010. It is doubtful that Congress even knew that FATCA was part of the HIRE Act (“Hiring Incentives To Restore Employment”). Yet, FATCA has created havoc in banking systems around the world, has destroyed the lives of the citizens and residents of other nations (who just happen to have been born in the United States), led to many Americans abroad renouncing their U.S. citizenship and forced banks to waste tens of millions (and this is conservative) of dollars in compliance fees. Interestingly FATCA has also led to other countries actually changing their domestic laws (overriding their own constitutions) to “hunt” for people with a U.S. birthplace. FATCA has generated significant hatred of America and has severely eroded America’s “moral capital” during a time when China is challenging the United States for global supremacy.
FATCA has recently been part of an inquiry by the Government of France into the “overreaching” of U.S. laws. Nigel Green of the Devere Group has joined with Jim Jatras to lobby for the repeal of FATCA.
2012 – The world according to FATCA  – For the compliance industry: “The Gift That Just Keeps on Giving” …


2013 – The Pre-IGA World: Looking back at FATCA in December of 2013


2014 – The FATCA IGAs are signed: At Home In Canada – The genesis of the ADSC Lawsuit – Opposition Rising …


2015 – Meanwhile, In The Homeland – The Bopp FATCALegalAction.com Lawsuit begins …


Interestingly, in August 2016, Dr. Stephen Kish, a plaintiff in the Bopp lawsuit and Chair of the Alliance For the Defence of Canadian Sovereignty renounced his U.S. citizenship.


Listen to the legal arguments …


 
December 2016 – Advocacy For Americans Abroad Fails: U.S. Treasury refuses proposed FATCA Same Country Exemption for Americans Abroad (but not for “Accidental Americans”) …


To be clear, much of the FATCA harm caused to “some” Americans abroad could be alleviated with the FATCA Same Country exemption (proposed by “ACA” and “Democrats Abroad”). FATCA SCE could be achieved by regulation. In December of 2016, U.S. Treasury refused to support a regulation creating the FATCA Same Country Exemption.
The Obama administration was:
1. Aware of the harm that FATCA was causing to Americans abroad (leaving aside the harm to the rest of the world); and
2. Refused to provide relief for Americans abroad!
2017 – The world according to FATCA  – Hearings in Washington, D.C. …


 
On April 26, 2017, at the initiative of Congressman Mark Meadows and Senator Rand Paul, “FATCA Hearings” will take place in Washington, DC. Although FATCA has been the subject of much discussion outside of the United States, there has been little discussion of FATCA inside the United States. FATCA is NOT well known in the United States.
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The “Little Red FATCA Book” Documenting the “Worldwide Hunt” for “U.S. Persons” …


The “Little Red FATCA Book” is a collection of posts that I created over an 18 month period. I have decided to collect the individual posts and organize them in one place. I have grouped the individual posts into seven broad chapters (reflecting evolution and topic) which I will call:

  • Chapter A – How FATCA impacts the non-U.S. world: Describing The Harm and Impact – Parts 1 – 25
  • Chapter B – The Canadian Response – The Alliance For The Defence Of Canadian Sovereignty and the FATCA Lawsuit Against The Government of Canada – Parts 26 – 27
  • Chapter C – The 2017 Meadows Bill: What Does FATCA Repeal Actually Mean? – Part 28 – 29
  • Chapter D – The 2018 Posey initiative:
  • Chapter E – 2018 The European Union Fights Back (well maybe)
  • Chapter F – General: Fixing FATCA Through “Regulation” instead of through “Legislation”
  • Chapter G – General: When enacting FATCA: What Did Congress Know and WHEN Did Congress Know It?

This is a “work in progress”. Some of the individual posts are incomplete and subject and are likely to be revised.
FATCA which is essentially the enforcement mechanism of U.S. “Place of Birth Taxation” is a controversial topic. Feel free to post your thoughts and comments.
John Richardson
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Part 22: What God Hath Wrought – The #FATCA Inquisition (Review, Identify and Report on “U.S. Persons”) – Oh my God! #FATCA affects even a Paypal account!


 
 
 

Part 18: What God Hath Wrought – The #FATCA Inquisition (Review, Identify and Report on “U.S. Persons”) – Responding to the #FATCA Letter


The above tweet references an earlier post about the FATCA Letter and how to respond.

How the "assistance in collection" provisions in the Canada US Tax Treaty facilitates "US citizenship based taxation"


The above tweet references the comment I left on an article titled: ”

Why is the IRS Collecting Taxes for Denmark?

which appeared at the “Procedurally Speaking” blog.
The article is about the “assistance in collection” provision which is found in 5 U.S. Tax Treaties (which include: Canada, Denmark, Sweden, France and the Netherlands). I am particularly interested in this because of a recent post at the Isaac Brock Society.
This post discusses the “assistance in collection” provision found in Article XXVI A of the Canada U.S. Tax Treaty. The full test of this article is:
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