Warning! USA invading Canada and other countries. be aware if you are an US person living abroad.

[RAFREE]

156. It's difficult if

It's really hard if you haven't seen some of these complexities and how they are really harming people to explain. You really ought to meet the actual people and talk to them.

I cannot speak for everyone but, I have a few issues with it and it's not to do with taxes as you rightly claim they don't owe any. That's 82 percent of all expats would not owe any taxes. FATCA to me in that case is not about taxes then is it?

So what's it about? It's about FBAR penalties on low and middle income families that are utterly wrong and not necessary to the implementation of this law. Not even the IRS was telling anyone about FBAR and I know because I talked to them every single year. Not the embassies or consulates. No one told anyone who was outside the U.S. for decades. Only recent expats had any way to know. In fact FBAR was originally only meant for those living in the U.S. who had actual "off shore" high dollar accounts. When it was originally put in place it was not meant that those penalties be applied to those who had low income, where not hiding money, and did not owe any taxes.

The second thing that is bothersome is that FATCA does not just apply to U.S. persons. It applies to all your foreign relatives who live with you or you share any account with whether or not they have ever been American. In my household and many others this caused huge issues in people's marriages. Foreign spouses especially those who make the majority of income in their nation of birth and who have never had any gain from the U.S. do not understand why they must give the U.S. their banking information. It's against the law here in Canada for Canada to even ask your place of birth before providing services or to alter services based on your nation of birth or "national indicia" Should China or Iran demand upon pain of penalty that Canada violate our Charter of Rights and Freedoms we'd never have done it. Foreign spouses see this as a violation of their rights and privacy and many are protesting loudly here over it. My spouse cannot understand why Americans are so offended at the NSA reading emails and listening to phone calls but, think a Canadian should hand over to foreign country their bank account numbers, balances and transactions. The crafters of FATCA have already said that in many cases where FATCA was not about taxes it was about collecting data and that this data could be shared among other U.S. agencies. This did not warm my spouses heart. He does not want his banking data passed around among U.S. agencies without his consent or knowledge having never been American lived or worked there. To me the violation of the laws of Canada is one of the biggest issues and the second biggest is this sort of data collection going in the wrong hands is imperial over reach.

Since FATCA violates the laws of Canada as the Canadian Civil Liberties Association points out among others the U.S. has said that in those cases that other countries could just "change their laws" to be in compliance with you. I personally don't think that was well thought through. Canada doesn't make it's laws in the U.S. congress, we make our laws in our Parliament *until now* this sets a dangerous bar for U.S. over reach and many Canadians are very sensitive to such issues. As the elder Trudeau pointed out we deal with the elephant to the south.

I also know of people having their children's disability savings funds penalized, education funds penalized and many other savings vehicles normal families here can have unless there is an American in the family. I know one person who was told his mortgage wasn't going to be renewed as the bank did not want American customers any longer. This person wasn't in Canada but, another country and he's not the only person this happened to. He's a vet and since he couldn't have his family lose their home and can't move back with no job he renounced to keep their home. Things like this just should not be happening to ordinary people all over the world.

Another woman I know has a son with severe disabilities and he'll be on the hook for all this form filing and costs including having his disability savings taxed because it isn't taxed here. She was afraid after her death he won't be able to comply with all this and so sought to renounce him. She was told she cannot renounce him as he doesn't have the capacity to understand such so now he'll be out of compliance and fined if his information is "exchanged" by the bank due to his U.S. "indicia" even though he was born in Canada. He is considered a "U.S. person" because he has one U.S. parent even though never registered as such. You do not have to register a foreign child for the U.S. to claim them for tax purposes and all that, that implies.

FATCA has many, many complications for millions of people most of whom are not rich and most of whom would never owe a dime in taxes. It's not about taxes as you so aptly pointed out.

My main problem with it is that low and middle income people are indeed being harmed by it as it is now written. It needs amending. And it would have been nice if the U.S. could set the tone by starting at home first before threatening other nations if they don't go along they will be penalized. For instance Delaware has huge tax haven issues with shell corporations, Utah has issues, so does Nevada. Could they not have gone after those at home actually "Off shoring" before being a bit of a bully about this in high tax nations against most expats who would owe not tax?

Then there is the cost of compliance. I see you stated something about turbo tax? That won't work for long term expats who have savings accounts and other situations. You need a professional and they are expensive outside the U.S. The one you saw that was 300 dollars? You mean H and R Block?? There was a sign up in the Ottawa embassy saying not to use them as they do not know what they are doing. To get anyone who really understands the forms you may need you will have to pay upwards of two to three thousand a year taxes owed or not and in most cases not. MANY families cannot afford this and can't justify the cost. The U.S. person in the family becomes a financial burden and a burden otherwise due causing their family member to be treated differently than every other citizen of their home country for banking and savings purposes. So then the U.S. person gets to choose to take their name off everything so the foreign family isn't penalized. That presents a lot of issues for those households where the U.S. person doesn't make the income. It makes a pauper out of them. OR they can renounce in such cases but, that means you are being made to choose between your country of birth or your foreign family. For some that's quite an ordeal. If that's the way the U.S. wants it though then that's the way it is. I hardly think it's reasonable and most people here find it outrageous since Canada doesn't attempt things like this on non residence and is actually appreciative of their expat community so most here just don't get the extremes the U.S. is going to.

This is quite too long really. FATCA however is not all it appears on the surface and is complicated. I've had two years of reading about it and seeing it up close here to realize it's not the best way to accomplish attacking tax havens. The fall out for innocent people especially the elderly affected is far too great. It CAN work but, with amendments.

There are ways to go after tax cheats and there are ways to address tax haven issues without all the fall out FATCA is causing. It's gone over like a lead balloon here for many reasons and not just with those families who have an American in them.