Category Archives: FATCA

John Richardson Opening Statement May 14, 2014 – House Of Commons FATCA FINA Committee Meeting

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Purpose and introduction:

Prior to Canada’s implementation of FATCA on July 1, 2014, the Canadian parliament held hearings. The hearings took place over two days in May of 2014. I appeared as a witness on Mary 14, 2014. Excerpts from the testimony appear in the above video. What follows is a transcript of my opening statement. I think I would say the same thing today.

https://www.ourcommons.ca/DocumentViewer/en/41-2/fina/meeting-35/evidence

The Chair (Mr. James Rajotte (Edmonton—Leduc, CPC)):

I call this meeting to order.
This is meeting number 35 of the Standing Committee on Finance. Our orders of the day, pursuant to the order of reference of Tuesday, April 8, 2014, are the study of Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.

Colleagues, we have two panels before us this afternoon.

In the first panel, we’re very pleased to welcome Mr. John Richardson, and, from the Canadian Bankers Association, the acting vice-president, Mr. Darren Hannah. From the Canadian Council of Chief Executives, we have Mr. Brian Kingston, and from the Office of the Privacy Commissioner of Canada, we have Privacy Commissioner Madam Chantal Bernier.

Bienvenue. Each of you will have five minutes maximum for your opening statement.
We’ll begin with Mr. Richardson, please.
[Expand]

Mr. John Richardson (As an Individual):

“Thanks very much for the chance to appear today.

I did take the time to watch yesterday’s session, which was actually enormously helpful to me, as I’m sure it was to you. I have a couple of thoughts, though, that are my own but directly link to that. The signing of the FATCA IGA can be seen as either good news or bad news.

First, interestingly, is the good news. It’s the point that Professor Cockfield made yesterday. In fact, what this does ensure is that Canada is absolutely 100% in compliance, no ifs, ands, or buts about it. That’s what it means to have signed that agreement.

Interestingly, the agreement specifically states that nothing happens until Canada makes it clear that it has done all of the legwork needed to actually implement the agreement, which I would assume to be all of the enabling legislation that we find in Bill C-31. Given that’s the case, as Professor Cockfield pointed out, there’s absolutely no reason to rush this whatsoever, absolutely none. This should not be in the dark recesses of an omnibus bill. It should in fact be brought to see the light of day in a separate bill.

The second aspect of this that’s very interesting in the IGA itself—and this question was asked yesterday—is who this applies to. It applies to U.S. persons and is defined in the agreement as “U.S. citizens or residents”. Now, what is extremely significant is that U.S. citizens are defined solely by the United States today, tomorrow, and forever. That means that someone who is a U.S. citizen today might not be a U.S. citizen tomorrow—and I’ll have more on this as we continue the discussion—but given that the U.S. has the right to define who a citizen is, given that I presume Canada would cede that right to them, I think it’s extremely important, absolutely essential, under any FATCA agreement that the definition of a U.S. citizen could never, never, never include any Canadian citizen who is a resident in Canada.

Third, we’ve got the whole problem of what FATCA actually means. Having watched a few of these committees, I see a lot of technical discussion of FATCA and a lot of discussion of regulations. In other words, there’s a lot of talk about how to implement this agreement, but precious little on what it actually means in terms of the lives of Canadians, and precious little in terms of what it means in terms of the country itself.

The simple fact of the matter is that FATCA, once implemented, will allow the U.S. to put a permanent capital tax on Canada every day of every year for as long as this agreement is in effect, simply by virtue of using U.S. citizens in Canada to tax and siphon revenue out of the country. It is a myth, an absolute myth, and it is completely wrong that under U.S. tax laws, U.S. citizens will not owe tax to the IRS. This is for two reasons. The first is that the U.S. tax code is hostile to anything foreign, and that would include anything in Canada in general, but secondly, anything that involves tax deferral, and it is plainly obvious that all of the pillars of Canadian retirement planning do in fact involve tax deferral.

So it is a myth that U.S. citizens would not owe tax. It is a myth. Interestingly, as I read in something yesterday, the opposite of truth is not the lie: the opposite is in fact the myth. This agreement will have severe consequences for Canada and Canadians.”

What follows is a pdf version:

FINAEV35-E

Here is the video:

https://parlvu.parl.gc.ca/Harmony/en/PowerBrowser/PowerBrowserV2?fk=8332857

A trip down memory lane!

John Richardson – Follow me on X.com @ExpatriationLaw

Accidental Americans, FATCA, The GDPR And The Netherlands Decision Of July 25, 2025

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Part A – Prologue – It’s not about FATCA. It’s about U.S. citizenship taxation

U.S. citizenship taxation is a mechanism that is used by the United States to:

1. Capture the residents of OTHER countries and claim they are really U.S. residents; and

2. Impose U.S.taxation on the non-US source income actually received (or in the case of GILTI, transition tax, foreign trust rules, etc. not actually received) by those residents of other countries.

In simple terms:

U.S. citizenship based taxation is when the U.S. imposes worldwide taxation on (1) people who live in other countries and (2) on the non-U.S. source income received by those residents of other countries.

FATCA is a mechanism used by the United States to force other countries to search for and locate their own residents who are (because of a U.S. birth place) effectively the property of the United States. In practical terms, the mechanism used is the “FATCA IGA” and the countries who sign the “FATCA IGA” are partner countries. The job of the partner country is three-fold:

(i) to locate and determine which of their residents are either U.S. citizens or are suspected to be U.S. citizens

(ii) to report their financial information to the Internal Revenue Service of the United States

(iii) to deny bank services to those individuals who do not cooperate with the FATCA inquisition.

In effect, (as the court decision makes clear) the purpose and effect of FATCA is to assist with exporting U.S. citizenship taxation into other countries. In the same way that modern extradition treaties are used to export U.S. criminal law around the world, FATCA is used to export U.S. citizenship taxation around the world. The following post also argues that U.S. citizenship taxation (if it matters) is a violation of international law.

Toward An Argument That US Citizenship Taxation Violates International Law

On July 25, 2025 a Dutch court confirmed its view that the Netherland’s FATCA IGA with the United States is NOT subject to any provisions of the GDPR. In other words, U.S. citizens, who are residents of the Netherlands and call the Netherlands home do NOT have the same rights as citizens of other countries!

In paragraph 7 of its decision, the court confirms that Accidental Americans in the Netherlands are NOT afforded the same rights as other Dutch residents as follows:

Beoordeling door de rechtbank

7. De rechtbank stelt voorop dat zij begrip heeft voor de op zitting door eisers geuite gevoelens van frustratie en onvrede. Eisers hebben duidelijk gemaakt dat zij door het hebben van een dubbele nationaliteit nadelige gevolgen ondervinden als gevolg van Amerikaanse wetgeving. De rechtbank kan begrijpen dat de uitwisseling van financiële gegevens van eisers met de VS door de Belastingdienst een zekere impact kan hebben op eisers. Dat laat onverlet dat de rechtbank de beroepen moet beoordelen aan de hand van de aangevoerde beroepsgronden en de toepasselijke wet- en regelgeving (het toetsingskader).

An English translation of Paragraph 7 is:

7. The court first of all states that it understands the feelings of frustration and dissatisfaction expressed by the plaintiffs at the hearing. The plaintiffs have made it clear that they suffer adverse consequences as a result of American legislation due to their dual nationality. The court understands that the exchange of the plaintiffs’ financial data with the US by the Dutch Tax Authorities may have a certain impact on the plaintiffs. Nevertheless, the court must assess the appeals on the basis of the grounds for appeal put forward and the applicable laws and regulations (the assessment framework).

The decision of the Dutch court underscores the simple reality that U.S. citizenship is indeed a disability in the 21st Century.

Part B – A brief summary of the decision – Accidental Americans in the Netherlands do NOT have rights under Article 18 of the GDPR

In summary:

Because the Netherlands has signed a FATCA IGA with the United States, individuals described in the IGA (U.S. Citizens) have NO rights under Article 18 of the GDPR!

https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:RBGEL:2025:5881

A podcast with former KLM Captain Ronald Aries, describing the circumstances leading up to the court hearing is in Appendix A of this post.

Part C – Commentary from Mr. Aries’s lawyer Ellen Timmer

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Belgian DPA Decision – April 2025 – French and (Unofficial) English Versions

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What follows are the both the official decision in French and the (obviously) Unofficial version in English.

Congratulations to the Accidental Americans in the Netherlands!

The only way this nightmare ends is for the world to stop allowing the United States to claim the tax residents of other countries as U.S. tax residents. This means that citizenship taxation must come to a complete end!!

No carveouts! No optouts! Just a complete separate of citizenship and tax residency!

Here you go …

Belgian DPA decision April 2025 French original

Belgian DPA decision April 2025 unofficial translation FR_to_en-US

John Richardson – Follow me on X @Expatriationlaw

Toward An Argument That US Citizenship Taxation Violates International Law

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Introduction – Why FATCA Litigation Fails …

(Well, most of the time!)*

In September of 2024, I wrote a blog post about FATCA litigation.

Q. Why Does FATCA Litigation Fail? A. Because, It Focuses On The Symptom And Not The Cause

That post was discussed on an IRS Medic podcast here:

In that post, I suggested that FATCA litigation fails because it has to date focused on certain results of FATCA (privacy breaches, discrimination, etc.) No FATCA litigation (to date) has focused on the reality that U.S. “citizenship taxation” is the reason for FATCA and therefore the cause of all the FATCA related problems. The effect of FATCA and the FATCA IGAs is to enforce U.S. citizenship taxation on the world (including and PRIMARILY on individuals who are tax residents of other countries). A principal purpose of FATCA is to export U.S. tax laws into other countries. By signing the FATCA IGAs, these countries agree to assist the United States in identifying which of their country’s residents (and often citizens) are also U.S. citizens and should therefore be subject to U.S taxation. Put another way: the purpose of the FATCA IGAs is to expand the U.S. tax base into other countries.

For background on the issue of the United States claiming the residents of other countries as U.S. tax residents see:

The Issue Is Not @CitizenshipTax. The Issue Is Whether The US Can Claim The Tax Residents Of Other Countries As US Tax Residents!

The conclusion of the September 2024 post was that:

Future FATCA litigation should focus on whether it is a violation of international law for the United States to impose citizenship taxation (the reason for FATCA) on the residents of other countries (who suffer the effects of FATCA).

The purpose of this post is to continue the analysis and to explore the specific question:

Is U.S. citizenship taxation – the process of claiming nonresidents as U.S. tax residents – a violation of international law?

Is it a violation of international law for the United States to:

1. Claim the residents of other countries as U.S. tax residents; and

2. Impose U.S. taxation on the non-U.S. source income of those individuals who do NOT live in the United States?

(I am introducing and developing the argument cannot impose U.S. citizenship taxation on the tax residents of OTHER countries. The United States, has of course the sovereign right, to impose citizenship taxation on U.S. residents.)

If U.S. citizenship taxation, as applied to the residents of OTHER countries, conflicts with the norms of international law, then the foundation for FATCA (as applied to non-U.S. residents) crumbles. In theory, this would provide courts and tribunals a justification for refusing to apply FATCA obligations in relation to individuals who are tax residents of other countries and are not residents of the United States. In addition, it might cause countries to give careful consideration to the effects of the “saving clause” which is part of all U.S. tax treaties.

How U.S. Citizenship Tax, The Treaty “Saving Clause” and FATCA Create A Fiscal Prison For Dual Tax Residents

It is my hope that this post will analyze this question by identifying and outlining “some” of the relevant issues. Perhaps, this post will “begin’ a discussion about this important issue. Should U.S. citizens, because and only because of their citizenship, become “dual tax residents” simply by moving from the United States?

For each issue I will suggest an answer and provide a backup source(s) for further inquiry.

Suggested conclusion:

This post is a “thought experiment”. I believe that a credible argument can be developed that U.S. citizenship taxation – as applied to those who are tax residents of other countries – is a violation of CIL (“Customary International Law”). What follows are the “individual components” of the argument, along with commentary on each. The individual components are organized in the following outline:

Outline

Part A – Some Theoretical Concepts

1. What is US citizenship taxation? U.S. citizenship taxation defined

2. What is meant by international law?

Part B – Tax Residency And International Law

3. Is the concept of “tax residency” generally subject to the rules of international law?

4. Concepts of tax residency as expressed through tax treaties including treaty tie breakers

Part C – Can The Method Of Taxation Violate Individual Rights As Expressed In Human Rights Documents?

5. Professor William Thomas Worster – Taxation and Human Rights

6. Barriers To Emigration Under International Law

Part D – U.S. Citizenship Taxation And the Tax Sovereignty Of Other Nations

7. U.S. Citizenship Taxation As A Method To Siphon Capital From Other Nations

8. The Common Law Revenue Rule As An Expression Of Tax and Territorial Sovereignty

Part E – U.S. Tax Treaties And The “Saving Clause” – Contracting Out Of The Principles Of International Law?

9. Taxation Perspective: Is the “saving clause” an agreed upon override to the “revenue rule” and other international norms?

10. Information Perspective: Can FATCA information extraction generally be used to refuse to provide information about a country’s tax residents?

11. Enforcement Perspective: Should exemptions from cooperation on enforcement of tax debts extend to the disclosure of FATCA information? The cases of Canada, Netherlands, France, Sweden …

Part F – Possible Conclusions …

For those who don’t want to read the rest:

The purpose of this post has been to develop a general theory of why U.S. citizenship taxation – to the extent that it claims the tax residents of other countries as U.S. tax residents – is a violation of international law. Theory aside, there is no other country in the world that uses an attribute (citizenship), that is often an immutable characteristic (place of birth), that bears no presumptive relevance to a physical or economic connection to a country, as a sufficient condition for tax residency. In so doing, the United States is defining tax residency in terms of the “circumstances of birth”, rather than the “circumstances of life”. The only effect is to claim the residents of other countries as tax residents of the United States (even when they are residents and often citizens of those other countries).

It is respectfully submitted that, for these reasons, that citizenship taxation is a violation of CIL (“Customary International Law” and should NOT be tolerated by the international community.

In developing my argument, I have included links to previous posts. The linked posts are NOT part of this post, but are supplied for further reading on each topic.

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Robert T. Kudrie: Citizenship Taxation, Globalization and Inequality

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I came across a 2023 article published in the Florida Tax Review by Robert T. Kudrie of the University of Minnesota. The article is available here.

The title of the article is:

“Citizenship Taxation, Globalization and Inequality”

https://scholarship.law.ufl.edu/cgi/viewcontent.cgi?article=1410&context=ftr

Impressions based on a fairly quick read …

Despite its title the article seems to focus more on the importance and enhancement of tax enforcement on U.S. residents with “offshore income and assets” than on Americans abroad with income and assets in their country of residence. Put another way, I understand the article to more of an attempt to argue for enhanced enforcement of “resident-based taxation” and less of an argument for “citizenship-based taxation”. (The thesis seems to be more about ensuring that residents are taxed on their complete worldwide (offshore) income, rather than an argument that citizens living outside the United States should be taxed on their non-U.S. source income.) By confusing this issue, the article becomes one more of a series of articles that claims to justify “citizenship-based taxation” because U.S. residents are not paying tax on their non-U.S. source income.

There is very little analysis on the question of why the United States should be imposing its worldwide tax regime on nonresidents.

The author argues that Americans abroad living in select countries (those with tax systems similar to the U.S. system) should be subject to the tax system of their country of residence (residence-based taxation).

Generally the article replicates the U.S. tax academics’complete misunderstanding of how the U.S. extra-territorial tax regime affects Americans abroad. (He lives in the “echo chamber” of Avi-Yonah, Kirsch, Zelinsky, etc.) He makes not the slightest mention that the U.S. (citizenship based) extra-territorial tax regime is really about the application of U.S. taxation to the non-U.S. source income received by people who do not live in the United States.

That said, he does seem to recognize that as a matter of lack of connection to the United States, certain U.S. citizens abroad (those with less than three years of U.S. residence after the age of 18) ought to be able to cease being taxed under the U.S. tax rules and be allowed to live solely under the tax regimes of their country of residence (a good thing).

The author concludes with:

Vii. summinG up

Human mobility across states is increasing even as skepticism about some aspects of globalization grows. Concern about material inequality within states is also high and growing.

The policy proposals presented here attempt to increase the fiscal grip of the U.S. government on high income and wealth citizens who have benefited from the U.S. national environment while reducing tax interference with most Americans who choose to live abroad. The suggested policies also change the rules for those relinquishing citizenship to recover more fully tax revenue that should have gone to the U.S. Treasury. Revised policies should allow those below the top ten percent of the U.S. citizenry in income and wealth to live and pay taxes as locals in foreign countries with personal tax systems similar to that of the U.S. The very well off and those who reside in low tax jurisdictions should stay in the U.S. system. Any shift to a foreign system should entail mark-to-market capital gains taxation. Relinquishing U.S. citizenship should require the payment of both deemed capital gains and deemed estate taxation without step-up. None of this will be possible unless administration is tightened and enforcement is greatly increased. Truly effective enforcement will require greater international cooperation, but U.S. initiatives should meet success among states striving to reduce tax escape.

Generally good news for Americans abroad …

John Richardson – Follow me on X.com @Expatriationlaw

IRS Service To Expats: Another Reason To End U.S. Citizenship Taxation

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Guest Post By Dr. Suzanne de Treville – Switzerland

Discussions about eliminating double taxation for U.S. citizens abroad often focus on reducing the significant compliance burdens these individuals face. When the U.S. taxes income or assets already taxed in a citizen’s country of residence, the resulting complexity is substantial while the extra tax revenue to the IRS that results from this double taxation by ordinary taxpayers is quite low. This complexity is particularly burdensome for the 80% of expat taxpayers with an Adjusted Gross Income of $100,000 or less.

The IRS requires expatriates to file intricate returns and is responsible for providing necessary assistance. However, while resources are available to domestic taxpayers, similar support is lacking for those abroad, despite their greater need.
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FAIRTax – The Solution For America And For Americans Abroad – Jim Bennett

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On March 13, 2025 I am hosting Jim Bennett of Fair Tax fame as part of my “X Spaces” Discussion series.

Here is a recent article he wrote explaining why:

1. The Fair Tax would be an alternative for all Americans; and

2. Why the Fair Tax would solve the problems of Americans abroad.

Read his article here:

FAIRtax – The Solution for Americans Abroad

John Richardson – Follow me on X.com @ExpatriationLaw

Some IRS Medic Livestream Videos – 2026 to 2023

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Introduction:

Over the years I have been a guest on the IRS Medic Youtube Channel a number of times. The topics have been varied and of relevance to Americans abroad. I thought I would collect “some” of the videos in one post. If you scroll down, I expect that you will some topics of interest to you. Many if not most of the topics have included written presentations in PDF format. I will add those when I have the time and am able to locate them.

If after watching any of these, if you want to schedule a consultation to discuss your situation:

https://www.calendly.com/renounceUScitizenship

ExpatriationLaw.com

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Part 4 – Notice 2023-11: Relief For Foreign Banks And The Hunt For Americans Abroad Extended For An Additional Three Years By Notice 2024-78

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Prologue and introduction:

October 24, 2024 -Letter to Americans abroad from Kamala Harris

In a letter addressed to Americans abroad Vice President Harris said that she takes the concerns of US citizens overseas seriously, “whether it’s improving access to consular services, addressing the complex challenges you face with banking, taxation, and financial services, or ensuring equal treatment in immigration and citizenship processes.”

The full text of the letter may be found here.

https://www.democratsabroad.org/vp_harris_letter_to_americans_abroad

October 28, 2024 – Biden Treasury Letter To Americans Abroad – Notice 2024-78 – Either Comply With FATCA and U.S. Citizenship Taxation or Renounce U.S. Citizenship

As described in a short announcement from KPMG:

The IRS today released Notice 2024-78, extending the temporary relief provided in Notice 2023-11, subject to the procedures and requirements of Notice 2024-78, for certain foreign financial institutions required to report U.S. taxpayer identification numbers (U.S. TINs) for certain preexisting accounts as defined in an applicable Model 1 intergovernmental agreement (IGA).

If a foreign financial institution in an eligible Model 1 IGA jurisdiction complies with the procedures described in the notice, then the U.S. Competent Authority will not determine there is significant non-compliance with the reporting Model 1 FFI’s obligations under the IGA solely as a result of its failure to report U.S. TINs associated with its preexisting accounts for the 2025, 2026, and 2027 calendar years.

The text of Notice 2024-78 is here:

n-24-78

Notice 2024-78 is the first indication of how seriously (NOT) the Biden/Harris administration takes the concerns of Americans abroad. In brief, the message from the Biden Administration to (an update to Treasury Notice 2023-11) Americans abroad is:

Either comply with FATCA and U.S. citizenship taxation or renounce your U.S. citizenship!

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Americans Abroad Have Until April 29, 2024 To Tell FinCEN Why They Should Be Exempt From FBAR

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Outline

To learn more about Mr. FBAR, I invite you to watch the following discussion with U.S. tax lawyer Virginia La Torre Jeker.

Part 1 – Introducing Mr. FBAR – Looking For Mr. FBAR
Part 2 – 2011 – Financial Crimes, FBAR and Americans Abroad – Perspective From The Isaac Brock Society
Part 3 – 2020 – Financial Crimes, FBAR and Americans Abroad – Comments From Americans Abroad And Treasury’s Answer
Part 4 – 2024 – Financial Crimes, FBAR and Americans Abroad – Americans abroad need to keep commenting
Part 5 – What should you include in your comment?
Appendix – Treasury’s 2021 response to the comments of Americans abroad

To cut to the chase:

Pursuant to 31 U.S. Code § 5314 the Treasury Secretary has the clear statutory authority to exempt Americans abroad from the FinCEN 114 AKA FBAR reporting requirements. The statutory language is:

(b)The Secretary may prescribe—
(1)a reasonable classification of persons subject to or exempt from a requirement under this section or a regulation under this section;

Therefore, it is important to make your views known to Treasury!

Treasury has provided another opportunity (the last one was in 2020) for Americans abroad to comment directly on the FinCEN 114 AKA FBAR requirement. I strongly recommend that Americans abroad take this opportunity to comment on the appropriateness of FBAR being required for the local bank comments of Americans abroad.

The site requesting comments is here..

A direct link to the place where you comment is here:

https://www.reginfo.gov/public/do/PRA/icrPublicCommentRequest?ref_nbr=202403-1506-001&fbclid=IwAR3onw_sIYUYJUPs7FE2peIqHvstLp6GWznHz_ES3wC3a3V9HS7YFcZJB94_aem_AZ4juvxyHvLGAFVzYZYrCQ13We1R4LDFI_ajzrZ1EVldNPEGw2Z8jNAb397dlqBeaGzAxjXeEySvXWDbPMjth6tv

Update April 16, 2024 – Understanding the context of the comment request

I just received the following note from a reader of this post – “Someone out there”:

The Paperwork Reduction Act mandates that agencies engaging in information collection must seek approval every 3rd year from the Office of Management and Budget to extend the collection for an additional 3 years. The agency must demonstrate that the information collection is necessary, has utility and that the burden is minimal. Here’s an overview of the process: https://pra.digital.gov/clearance-process/

The first comment period (step 2 in the renewal process) was initiated in October of last year and Treasury received 40+ comments). Now the process is at step 4. Treasury has read the comments from October and has summarized them into their supporting statement which has now been submitted to OBM. The current supporting statement as well as the October public comments can be found here: https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=202403-1506-001

Comments during the current 30 day period are sent directly to OBM for consideration. If for whatever reason OBM finds the information collection to be unnecessary, it has the authority to take a few actions: approve, disapprove, file comment, or return the ICR to the agency if it fails to meet the procedural requirements. The OBM can even instruct the agency to undergo “rulemaking” which means that Treasury would have to propose new FBAR rules which could eventually make its way into the regulations.

The statutes for this PRA approval process is found in 44 U.S. Code § 3507 and 44 U.S. Code § 3508 but the key subsection is 3507(h).

So any comments submitted during this 30 day period should be aimed at convincing the OBM that Treasury’s supporting statement is inadequate or that FBAR is unnecessary, doesn’t provide utility, is a burden and that the OBM should instruct Treasury to propose new rules that would modify the FBAR regulations.

Those who are interested in learning more, read on … Otherwise please go directly to the comment page.

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