# Jacobson, "Sit Tight" Grandmas are Waiting for a reply



## Cafreeb12

Well? It's been a month since Jacobson said "Sit Tight" Are there any new and more fair developments for Canadians and their families with regard to FBAR and FATCA? Some of us don't have months and months to "Sit Tight" sir. If you have heard anything new we were supposed to be sitting tight for can you please post it here. Has anyone got a response when writing to Jacobson? Perhaps a letter writing campaign for clarification on the "Sit Tight" remark is needed. What are we sitting tight for? I mean while people line up to renounce or spend thousands on accountants and lawyers.


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## Guest

Cafreeb12 said:


> Well? It's been a month since Jacobson said "Sit Tight" Are there any new and more fair developments for Canadians and their families with regard to FBAR and FATCA? Some of us don't have months and months to "Sit Tight" sir. If you have heard anything new we were supposed to be sitting tight for can you please post it here. Has anyone got a response when writing to Jacobson? Perhaps a letter writing campaign for clarification on the "Sit Tight" remark is needed. What are we sitting tight for? I mean while people line up to renounce or spend thousands on accountants and lawyers.


Maybe if there are US govt trolls monitoring this website they might pass the message along to their boss/colleague.


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## Cafreeb12

Schubert said:


> Maybe if there are US govt trolls monitoring this website they might pass the message along to their boss/colleague.


I drafted a letter to him today. Sit tight when the situation is so pressing for so many of us isn't something we have the luxury of doing so I wondered if he had anymore information as to what we are sitting tight for?


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## Peg

Article about Jacobson's Sit Tight speech: Ottawa seeks leniency for Canadians in U.S. tax hunt - The Globe and Mail

Actual text of the speech: 18 October 2011: Ambassador Jacobson's Remarks To The Canadian Club | Embassy of the United States Ottawa, Canada


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## Guest

i emailed the Ambassodor following his 'sit tight and wait' address.

The only reply I received was "contact the IRS"


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## Baird68

Peg said:


> Article about Jacobson's Sit Tight speech: Ottawa seeks leniency for Canadians in U.S. tax hunt - The Globe and Mail
> 
> Actual text of the speech: 18 October 2011: Ambassador Jacobson's Remarks To The Canadian Club | Embassy of the United States Ottawa, Canada


Thanks for the link, Peg. I'm going to the Consulate tomorrow, and I will take a copy of the speech in case I need support. I'm in the " I wish I were a gramma" age group Jacobson describes in his speech.


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## 416

Baird68 said:


> Thanks for the link, Peg. I'm going to the Consulate tomorrow, and I will take a copy of the speech in case I need support. I'm in the " I wish I were a gramma" age group Jacobson describes in his speech.


nelsona seems to think there's an unspecified something about to happen, for what that's worth.


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## Chill Canadian

*Consider Article XXV of Canada-US Treaty*



Cafreeb12 said:


> Well? It's been a month since.........
> 
> Has anyone here explored potential protection under Article XXV of the Canada-US Tax Treaty? PwC has blogged about this recently. [Google PwC Tax Blog FBAR], I cannot seem to post a URL link.
> 
> FBAR is not a tax under the treaty, and that is why Canada does not have to help collect it under the treaty. But FBAR is potentially a "requirement connected with taxation" and therefore, for taxpayers eligible to invoke the non-discrimination article of the treaty, would not need to worry about FBAR and could simply file their non-taxable 1040.
> 
> This is complicated stuff, not sure how regular folk are expected to figure all of this out, but it is something to think about for sure so stay tuned.
> 
> 
> The blog eludes to the possibility of using the non-discrimination provisions of the Treaty as a shield from either FBAR or FBAR penalties.
> There are many more angles and issues (US treaty overrides, congress supremacy etc) but we have to start somewhere with an existing statutory instrument. The argument would go like this:
> 
> Paragraph 1 of Article XXV to the Canada-US Income Tax Treaty reads as follows:
> 
> "Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith that is more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, particularly with respect to taxation on worldwide income, are or may be subjected. This provision shall also apply to individuals who are not residents of one or both of the Contracting States."
> 
> Paraphrasing the rule in the context of the PwC blog, the rule would be read as follows:
> 
> "Canadian citizens shall not be subjected in the US to any requirement connected with taxation that is more burdensome than the taxation and connected requirements to which Citizens of the US in the same circumstances, particularly with respect to taxation on worldwide income, are or may be subjected."
> 
> There are a number of questions that need to be asked in the context of FBAR filings and penalties.
> 
> 1. What is the connected requirement to be evaluated;
> 2. Is the Canadian citizen and the US citizen in the same circumstances with respect to worldwide taxation; and
> 3. Is the connected requirement more burdensome.
> 
> Take the requirement to file FBAR forms as a requirement connected with taxation. Can the US require Canadians to file such forms for accounts that they have in Canada? Then for failing to file such forms, can the US assess a penalty of up to 50% of the balance in the account on a Canadian citizen. The US domestic law would require forms to be filed, so would the treaty provide the Canadian relief?
> 
> In evaluating the Canadian citizen and the US citizen assuming each are subject to worldwide taxation in their respective jurisdictions, then it should be evident that they are in the same circumstances with respect to worldwide taxation. That is both are subject to worldwide taxation. There are some very unique aspects of the OECD, US Model and Fifth Protocol to the Canada-US treaty that are helpful in this regard.
> 
> Going back to the "requirement" then, is that requirement on the Canadian more burdensome, directly or indirectly, than the requirement on the American. Where both the Canadian and the American have bank accounts where they are resident, what one would call "home country" bank accounts, then one should be able to conclude that it is more burdensome on the Canadian since they would be required to file and be exposed to penalties in connection with the FBAR on home country accounts, whereas the American would not since they are not required to file FBAR forms for their home country accounts.


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## Baird68

Chill Canadian said:


> Cafreeb12 said:
> 
> 
> 
> Well? It's been a month since.........
> 
> Has anyone here explored potential protection under Article XXV of the Canada-US Tax Treaty? PwC has blogged about this recently. [Google PwC Tax Blog FBAR], I cannot seem to post a URL link.
> 
> FBAR is not a tax under the treaty, and that is why Canada does not have to help collect it under the treaty. But FBAR is potentially a "requirement connected with taxation" and therefore, for taxpayers eligible to invoke the non-discrimination article of the treaty, would not need to worry about FBAR and could simply file their non-taxable 1040.
> 
> This is complicated stuff, not sure how regular folk are expected to figure all of this out, but it is something to think about for sure so stay tuned.
> 
> 
> The blog eludes to the possibility of using the non-discrimination provisions of the Treaty as a shield from either FBAR or FBAR penalties.
> There are many more angles and issues (US treaty overrides, congress supremacy etc) but we have to start somewhere with an existing statutory instrument. The argument would go like this:
> 
> Paragraph 1 of Article XXV to the Canada-US Income Tax Treaty reads as follows:
> 
> "Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith that is more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, particularly with respect to taxation on worldwide income, are or may be subjected. This provision shall also apply to individuals who are not residents of one or both of the Contracting States."
> 
> Paraphrasing the rule in the context of the PwC blog, the rule would be read as follows:
> 
> "Canadian citizens shall not be subjected in the US to any requirement connected with taxation that is more burdensome than the taxation and connected requirements to which Citizens of the US in the same circumstances, particularly with respect to taxation on worldwide income, are or may be subjected."
> 
> There are a number of questions that need to be asked in the context of FBAR filings and penalties.
> 
> 1. What is the connected requirement to be evaluated;
> 2. Is the Canadian citizen and the US citizen in the same circumstances with respect to worldwide taxation; and
> 3. Is the connected requirement more burdensome.
> 
> Take the requirement to file FBAR forms as a requirement connected with taxation. Can the US require Canadians to file such forms for accounts that they have in Canada? Then for failing to file such forms, can the US assess a penalty of up to 50% of the balance in the account on a Canadian citizen. The US domestic law would require forms to be filed, so would the treaty provide the Canadian relief?
> 
> In evaluating the Canadian citizen and the US citizen assuming each are subject to worldwide taxation in their respective jurisdictions, then it should be evident that they are in the same circumstances with respect to worldwide taxation. That is both are subject to worldwide taxation. There are some very unique aspects of the OECD, US Model and Fifth Protocol to the Canada-US treaty that are helpful in this regard.
> 
> Going back to the "requirement" then, is that requirement on the Canadian more burdensome, directly or indirectly, than the requirement on the American. Where both the Canadian and the American have bank accounts where they are resident, what one would call "home country" bank accounts, then one should be able to conclude that it is more burdensome on the Canadian since they would be required to file and be exposed to penalties in connection with the FBAR on home country accounts, whereas the American would not since they are not required to file FBAR forms for their home country accounts.
> 
> 
> 
> I thought that Americans were not required to fill out FBAR forms on their home country accounts because their banks are reporting that already to the IRS. Am I mistaken?
Click to expand...


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## pwdunn

Chill Canadian said:


> Cafreeb12 said:
> 
> 
> 
> Well? It's been a month since.........
> 
> Has anyone here explored potential protection under Article XXV of the Canada-US Tax Treaty? PwC has blogged about this recently. [Google PwC Tax Blog FBAR], I cannot seem to post a URL link.
> 
> 
> 
> Please post the link with the following formula: www dot website dot com /filename.ext
> 
> You can fake out the computer, which doesn't allow Newbies to post urls. The search parameters that you give are not sufficiently refined.
Click to expand...


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## Chill Canadian

PetrosResearch said:


> Chill Canadian said:
> 
> 
> 
> pwc DOT typepad DOT com/tax_exchange/2011/11/americans-making-it-tough-on-canadians.html
Click to expand...


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## Stargazer

Baird68 said:


> Chill Canadian said:
> 
> 
> 
> I thought that Americans were not required to fill out FBAR forms on their home country accounts because their banks are reporting that already to the IRS. Am I mistaken?
> 
> 
> 
> I think "home country" is being used to describe the place where the person actually lives. So as an American in Canada, I report Canadian bank accounts on the FBAR. Not my American bank accounts.
Click to expand...


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## Baird68

Stargazer said:


> Baird68 said:
> 
> 
> 
> I think "home country" is being used to describe the place where the person actually lives. So as an American in Canada, I report Canadian bank accounts on the FBAR. Not my American bank accounts.
> 
> 
> 
> Yes, I understand that. But U.S. citizens don't have to fill out FBARs in the U.S. on their U.S. holdings because the information is linked from their financial institutions to the IRS anyway. And if FATCA is fully implemented, U.S. citizens in Canada won't be filling out FBARs because FFI will be doing that anyway. Or will USC have to file FBARs - a double tracking system. I could be wrong about this, and I hope I am. The more I read, the more I realize that big brother assumes you're guilty until proven innocent.
Click to expand...


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## pwdunn

Chill Canadian said:


> PetrosResearch said:
> 
> 
> 
> 
> 
> Chill Canadian said:
> 
> 
> 
> pwc DOT typepad DOT com/tax_exchange/2011/11/americans-making-it-tough-on-canadians.html
> 
> 
> 
> Here is the actual link, but the discussion about which you are talking must be in the comments:
> 
> "Americans making it tough on Canadians"
> 
> Click to expand...
Click to expand...


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## quincy

deleted


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## Cafreeb12

Mach7 said:


> i emailed the Ambassodor following his 'sit tight and wait' address.
> 
> The only reply I received was "contact the IRS"


Well his You Tube page allows comments.


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## Chill Canadian

Baird68 said:


> Chill Canadian said:
> 
> 
> 
> I thought that Americans were not required to fill out FBAR forms on their home country accounts because their banks are reporting that already to the IRS. Am I mistaken?
> 
> 
> 
> Well that is exactly the point. The treaty is an agreement between two countries on how they will apply their tax regimes to national of the other country. The theory here is that since americans don't have to file their bank account information to the IRS, Canadians should not have to file their Canadian accounts, if they live in Canada. It get quite complex, but when seeking professional advice, ask about whether and how the treaty could be applied to your situations. It would be better if the governments would simply agree a practice for home country accounts and the treaty provides the authority for them to do so.
> 
> I hope that helps.
Click to expand...


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## Guest

Baird68 said:


> Thanks for the link, Peg. I'm going to the Consulate tomorrow, and I will take a copy of the speech in case I need support. I'm in the " I wish I were a gramma" age group Jacobson describes in his speech.


Good luck on your appointment tomorrow! Hope you can get it done all in one meeting!


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## Guest

Baird68 said:


> Stargazer said:
> 
> 
> 
> Yes, I understand that. But U.S. citizens don't have to fill out FBARs in the U.S. on their U.S. holdings because the information is linked from their financial institutions to the IRS anyway. And if FATCA is fully implemented, U.S. citizens in Canada won't be filling out FBARs because FFI will be doing that anyway. Or will USC have to file FBARs - a double tracking system. I could be wrong about this, and I hope I am. The more I read, the more I realize that big brother assumes you're guilty until proven innocent.
> 
> 
> 
> My understanding is that US citizens in Canada will have to fill out FBARS as always.....The FFI is expected to help out root out anyone who is not paying. There is no escaping these people, they are out for every dime they can get.
Click to expand...


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## Cafreeb12

Mach7 said:


> i emailed the Ambassodor following his 'sit tight and wait' address.
> 
> The only reply I received was "contact the IRS"


That is utterly unacceptable. You should post the response you got on the newspaper article that highlighted Jacobson's comments to Canadians and dual citizens here in the comment section.


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## Peg

Baird68 said:


> Thanks for the link, Peg. I'm going to the Consulate tomorrow, and I will take a copy of the speech in case I need support. I'm in the " I wish I were a gramma" age group Jacobson describes in his speech.


Good luck Baird! Please let us know how your appointment with the Consulate went.


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## Guest

Mach7 said:


> i emailed the Ambassodor following his 'sit tight and wait' address.
> 
> The only reply I received was "contact the IRS"


Further to Cafreeb12's suggestion, I too think it would be very helpful if you could post a copy of the wording of the question you asking the Ambassador and the exact wording of his reply, of course after removing anything that might identify you personally.

I have been skeptical from the very beginning that the Ambassador's statement "sit tight" had any real meaning for us, it was glib and demeaning IMO. However, "contact the IRS" is a very different reply from "it's still under discussion," which he could have said without divulging any confidences about the specifics under discussion. Hence I think the exact wording would be useful (assuming of course that whoever wrote the reply for his signature actually thought it through carefully and had it vetted correctly -- if this were the Canadian government, I'd be pretty comfortable assuming that; with the US government I have no confidence that many of the people who work there have any concept of procedure, process etc.)

There are people who are in fact "sitting tight" before deciding whether a) to do the unthinkable and file back returns to a country they don't belong to and haven't for decades, just to get a $450 piece of paper to prove what they've lived and known for decades, or b) to cut all remaining ties with the US, ignore the demands of the IRS, never cross the border again, and be prepared to fight tooth-and-claw in the Canadian legal and political system against any thievery from their Canadian financial accounts by the IRS or anyone else.

Knowing exactly what the reply said, and the context of the reply (the original question), might help some of those people to make a decision and get on with their lives.

Thanks.


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## Guest

Further to Cafreeb12's suggestion, I too think it would be very helpful if you could post a copy of the wording of the question you asking the Ambassador and the exact wording of his reply, of course after removing anything that might identify you personally.

I have been skeptical from the very beginning that the Ambassador's statement "sit tight" had any real meaning for us, it was glib and demeaning IMO. However, "contact the IRS" is a very different reply from "it's still under discussion," which he could have said without divulging any confidences about the specifics under discussion. Hence I think the exact wording would be useful (assuming of course that whoever wrote the reply for his signature actually thought it through carefully and had it vetted correctly -- if this were the Canadian government, I'd be pretty comfortable assuming that; with the US government I have no confidence that many of the people who work there have any concept of procedure, process etc.)

There are people who are in fact "sitting tight" before deciding whether a) to do the unthinkable and file back returns to a country they don't belong to and haven't for decades, just to get a $450 piece of paper to prove what they've lived and known for decades, or b) to cut all remaining ties with the US, ignore the demands of the IRS, never cross the border again, and be prepared to fight tooth-and-claw in the Canadian legal and political system against any thievery from their Canadian financial accounts by the IRS or anyone else.

Knowing exactly what the reply said, and the context of the reply (the original question), might help some of those people to make a decision and get on with their lives.

Thanks. 

In response to the above post...my letter to Jacobson was aynonomous, but basically very professional in text outlining my particular situation and the stress and frustratin that a lot of us are going through right now....

I believe he did not reply personally to the letter with that response of 'contact the IRS'


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## Guest

*I, too, am more than tired of sitting tight!*



Cafreeb12 said:


> Well? It's been a month since Jacobson said "Sit Tight" Are there any new and more fair developments for Canadians and their families with regard to FBAR and FATCA? Some of us don't have months and months to "Sit Tight" sir. If you have heard anything new we were supposed to be sitting tight for can you please post it here. Has anyone got a response when writing to Jacobson? Perhaps a letter writing campaign for clarification on the "Sit Tight" remark is needed. What are we sitting tight for? I mean while people line up to renounce or spend thousands on accountants and lawyers.


Thanks, once again, Careeb, for your leadership in another initiative to move this along.

I'm on this today. After all, I almost fit the age description, although I am not a grandma. I was insulted by the patronizing attitude to all of us by the U.S. Ambassador to Canada and hence by our Finance Minister and MPs that represent us. 

I have yet to hear from Minister Flaherty or anyone in his office from an email sent on October 12th, with a follow-up email last week. I did hear from my MP's office but not personally from by my MP, Michelle Rempel. I was essentially told that it all had to go through the proper channels and that it would take time. What I expected was what steps my MP was personally taking on this issue in representation of her constituents.

It is not acceptable to me, for myself and so many others, that we are not part of the conversation regarding what this process is, its progress and if, in fact, anything at all is really being done on our behalf. Hello, anyone hear us?

In the meantime, I am engaging professionals to help in my family's situation. For me, this is cruel and unusual punishment.

No matter what the process or what the result will be for U.S. expats, I personally want to properly renounce my U.S. citizenship once and for all to rid myself and my family of the continuing insanity. 

Just why was I not asked to make a choice (opt in or out?) when the U.S. passed new legislation to give me back my U.S. citizenship after I had relinquished it in the mid-70's? Based on my history alone, I do not trust what the U.S. will do for us now or in the future. 

Please prove me wrong, land of my birth!


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## pwdunn

Chill Canadian said:


> Has anyone here explored potential protection under Article XXV of the Canada-US Tax Treaty? PwC has blogged about this recently..
> 
> FBAR is not a tax under the treaty, and that is why Canada does not have to help collect it under the treaty. But FBAR is potentially a "requirement connected with taxation" and therefore, for taxpayers eligible to invoke the non-discrimination article of the treaty, would not need to worry about FBAR and could simply file their non-taxable 1040.​
> This is complicated stuff, not sure how regular folk are expected to figure all of this out, but it is something to think about for sure so stay tuned.


Chill: I wrote a response to PWC as to why I think this particular question is an unnecessary point:

Hi, I think that the situation is very complicated because FBAR is actually not a requirement “requirement connected” with taxation, except that there is a inter-agency agreement between Treasury and IRS that gives the IRS enforcement abilities, to require filing, to assess civil penalties, and to collect fines. The Treasury Department has delegated this authority to the IRS. If criminal penalties are warranted, the IRS must refer the case to the Department of Justice, but the IRS cannot bring the matter up in criminal court.

Thus, the IRS is hamstringed with regard to Canadian residents. It is not a tax and therefore cannot be collected through the CRA under the tax treaty. Furthermore, criminal FBAR is not covered under the US/Canada Extradition treaty (at least not as I read it).

This is why the Canadian government's official position is that it will not collect FBAR. Just leave it at that. Canadian accounts are off the hook, unless you happen to be travelling in the states and they decide for some reason to arrest you.​
The rest of your question is as follows; I shall fisk in blue:

The blog eludes to the possibility of using the non-discrimination provisions of the Treaty as a shield from either FBAR or FBAR penalties. There are many more angles and issues (US treaty overrides, congress supremacy etc) but we have to start somewhere with an existing statutory instrument. ​I agree that it is necessary to look at this question from many more angles. I'm sure there are so many ways that FBAR is wrong, that it doesn't at all hurt to look at each way!


The argument would go like this:

Paragraph 1 of Article XXV to the Canada-US Income Tax Treaty reads as follows:

"Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith that is more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, particularly with respect to taxation on worldwide income, are or may be subjected. This provision shall also apply to individuals who are not residents of one or both of the Contracting States."

Paraphrasing the rule in the context of the PwC blog, the rule would be read as follows:

"Canadian citizens shall not be subjected in the US to any requirement connected with taxation that is more burdensome than the taxation and connected requirements to which Citizens of the US in the same circumstances, particularly with respect to taxation on worldwide income, are or may be subjected."

There are a number of questions that need to be asked in the context of FBAR filings and penalties.

1. What is the connected requirement to be evaluated;
2. Is the Canadian citizen and the US citizen in the same circumstances with respect to worldwide taxation; and
3. Is the connected requirement more burdensome.

Take the requirement to file FBAR forms as a requirement connected with taxation. Can the US require Canadians to file such forms for accounts that they have in Canada? Then for failing to file such forms, can the US assess a penalty of up to 50% of the balance in the account on a Canadian citizen. The US domestic law would require forms to be filed, so would the treaty provide the Canadian relief?​The tax treaty is irrelevant for FBAR. What is relevant is the extradition treaty between US and Canada (see the "Schedule" on p. 18 which list crimes for which a person may be extradited under the treaty). It does not FBAR-type crimes, for the activity which is being criminalized by FBAR didn't take place in the United States but in Canada. I.e., the United States can't expect Canada to penalize a resident of Canada (whether citizen or not, for an activity which is legal and encouraged in Canada--such as opening an RRSP).


In evaluating the Canadian citizen and the US citizen assuming each are subject to worldwide taxation in their respective jurisdictions, then it should be evident that they are in the same circumstances with respect to worldwide taxation. That is both are subject to worldwide taxation. There are some very unique aspects of the OECD, US Model and Fifth Protocol to the Canada-US treaty that are helpful in this regard.

Going back to the "requirement" then, is that requirement on the Canadian more burdensome, directly or indirectly, than the requirement on the American. Where both the Canadian and the American have bank accounts where they are resident, what one would call "home country" bank accounts, then one should be able to conclude that it is more burdensome on the Canadian since they would be required to file and be exposed to penalties in connection with the FBAR on home country accounts, whereas the American would not since they are not required to file FBAR forms for their home country accounts.​
I think you would have a case if FBAR civil or criminal penalties were a tax. But since they are not a tax, they are not at all covered by the treaty. Therefore, I would suggest just simply accepting that Canada isn't gonna do nothin' to help the Americans on this one. Thank God! But if a Canadian is later arrested and charged with an FBAR crime, I wonder now what our Canadian government would do? Demand the release of that person? This remains to be seen, whether the US DOJ would be so stupid as to charge with criminal FBAR a resident of Canada who owns perfectly legal accounts. Now that I am a Canadian citizen, I would hope that my government would registered a serious protest and that it would become a diplomatic incident.


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## Guest

*This Grandma is still sitting tight...*

Just wondering -- 


​Is this it, the final chapter on further guidance promised to US Persons in Canada, mostly a rehash of what already existed?

​Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
​


Have I missed a news release about the OVDI people getting information on reimbursement for their exhorbinant penalties?

Has anyone actually heard back from the letters written to the US Ambassador to Canada -- my three letters or the replies to them are somewhere in cyberspace I presume.


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## Guest

Calgary411 said:


> Just wondering --
> 
> 
> ​Is this it, the final chapter on further guidance promised to US Persons in Canada, mostly a rehash of what already existed?
> 
> ​Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
> ​
> 
> 
> Have I missed a news release about the OVDI people getting information on reimbursement for their exhorbinant penalties?
> 
> Has anyone actually heard back from the letters written to the US Ambassador to Canada -- my three letters or the replies to them are somewhere in cyberspace I presume.


I have heard several comments that it is "it" in spite of the fact it does not mention any relief for the OVDI people who were punished with outrageous fines.....and I have not seen/nor heard of any news releases about it....


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## Guest

*The Ambassador Would Like Our Email -- Don't Know What He Does With It*



nobledreamer said:


> I have heard several comments that it is "it" in spite of the fact it does not mention any relief for the OVDI people who were punished with outrageous fines.....and I have not seen/nor heard of any news releases about it....



OK, will have someone help me up now. 

And, bloody amazing, the good Ambassador has nothing on his site to inform us, but if anyone would like, he is looking forward to our email.

http://blogs.ottawa.usembassy.gov/ambassador/


_"Welcome to my blog. I hope to use this space to share my experiences in Canada and give you a sense of the views of my government and our work here. 

I also look forward to hearing from you and encourage you to contact me via email.

David Jacobson
Ambassador of the United States of America"​_


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## Guest

Calgary411 said:


> OK, will have someone help me up now.
> 
> And, bloody amazing, the good Ambassador has nothing on his site to inform us, but if anyone would like, he is looking forward to our email.
> 
> sorry about that. :tape2:
> 
> Ho Ho Ho!They've probably all disappeared down the Rabbit Hole. :wink:


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## AmTaker

Calgary411 said:


> Just wondering --
> 
> 
> ​Is this it, the final chapter on further guidance promised to US Persons in Canada, mostly a rehash of what already existed?
> 
> ​Information for U.S. Citizens or Dual Citizens Residing Outside the U.S.
> ​
> 
> Have I missed a news release about the OVDI people getting information on reimbursement for their exhorbinant penalties?
> 
> Has anyone actually heard back from the letters written to the US Ambassador to Canada -- my three letters or the replies to them are somewhere in cyberspace I presume.


I believe the OVDI people would need to write a letter to the IRS informing them that they meet the conditions described in the release, and ask for a refund (if already paid) or a waiver. I'm sure several are doing so on their own. 

There does seem to be some indication (from a couple of people who posted on other sites) that the IRS did waive OVDP penalties (even before the recent announcement) for people who meet the conditions in the release and opted out.


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## pwdunn

AmTaker said:


> I believe the OVDI people would need to write a letter to the IRS informing them that they meet the conditions described in the release, and ask for a refund (if already paid) or a waiver. I'm sure several are doing so on their own.
> 
> There does seem to be some indication (from a couple of people who posted on other sites) that the IRS did waive OVDP penalties (even before the recent announcement) for people who meet the conditions in the release and opted out.


The IRS says that people who want a refunds, must opt out of the program. Yeah right, and risk a steeper penalty and criminal charges. The IRS is dishonest and not to be trusted. They have proven this. So in order to make good on the word of Jacobson, they've done a bit of a bait and switch. Typical. You get your money back but you have to take a extreme risk to do so. A bit like gambling the house to win a $1000 in a poker game. Those in the OVDI are not extreme risk takers, but those who want to play it safe who thought that a 5%, 20% or 25% penalty hurts, but that's better than risking everything and a prison sentence. So the US Feds are playing a game with Canadian government--oh, we are not out to steal from grandmas, but they are, they are, they are. Why don't they just exempt registered savings accounts (they can), if they aren't out to get grandmas? Because they are out to get your retirement, grandma's RRIF and the disabled's RDSP and childrens' future education (RESP)--and your TFSA. There is one word for this: "evil". The sooner we figure that out, the sooner we can find the right way to cope with it. Since the ambassador lied in a public statement to the Canadian people, the United States is guilty of bad faith negotiations with our government, and we are all the victims.


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## AmTaker

PetrosResearch said:


> The IRS says that people who want a refunds, must opt out of the program. Yeah right, and risk a steeper penalty and criminal charges. The IRS is dishonest and not to be trusted. They have proven this.


I'm not in the program, so I'm not really familiar with the internals. However, I understand that even on opt out, assuming the disclosure was complete, one is still in Voluntary Disclosure, so the near guarantee of no criminal prosecution holds. 

I understand there have not been many opt-outs processed yet, but the limited feedback I've read indicates that the IRS is not being unreasonable on opt outs (unlike within the programs, where there is no discretion). So far, I have not heard a single confirmed case of an unreasonable penalty on opt out. And since the IRS/Justice would have to go to court to collect, such penalties would normally have been disclosed. 

Now there may be some statistical bias here -- the people who opt out may be the ones who have the best cases for reasonable cause, but when there has not been a single confirmed case of large civil penalties (let alone criminal penalties) against a long term expat, it doesn't seem that opting out is prone to peril for someone with a good case. 


Like I said, I'm not in the program, so I don't really care that much. But I think some of your dire predictions are ... well too dire.


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## pwdunn

AmTaker said:


> I'm not in the program, so I'm not really familiar with the internals. However, I understand that even on opt out, assuming the disclosure was complete, one is still in Voluntary Disclosure, so the near guarantee of no criminal prosecution holds.
> 
> I understand there have not been many opt-outs processed yet, but the limited feedback I've read indicates that the IRS is not being unreasonable on opt outs (unlike within the programs, where there is no discretion). So far, I have not heard a single confirmed case of an unreasonable penalty on opt out. And since the IRS/Justice would have to go to court to collect, such penalties would normally have been disclosed.
> 
> Now there may be some statistical bias here -- the people who opt out may be the ones who have the best cases for reasonable cause, but when there has not been a single confirmed case of large civil penalties (let alone criminal penalties) against a long term expat, it doesn't seem that opting out is prone to peril for someone with a good case.
> 
> Like I said, I'm not in the program, so I don't really care that much. But I think some of your dire predictions are ... well too dire.


The opt-out exposes the person to the full possibility of criminal charges just as would a Quiet Disclosure. That is why the innocent have not left _en bloc_ from the program.

I'm not being dire, just realistic. Realistically a government that borrows now 43 cents for every dollar it spends is committing criminal mismanagement of the country and is in dire need of revenue. FBAR has become revenue program with a mentality of let's congratulate ourselves for how much money we are bringing in! (news article after article). A great Canadian scholar once said the Medium is the Message. If the OVDI is as you say, an inflexible medium, then the message is "we need your money, we don't care how unfair it is and how many of your constitutional rights we are going to tread upon!" The OVDI was only inflexible because Shulman and Geithner (Obama's minions) decided that it should be--anyone who says it is the law itself that is inflexible (Jacobson) has either not read the Bank Secrecy Act or is lying. The problem is that there are still a lot of Canadians and others who don't know how to read these messages coming from the US authorities. When FATCA comes down, they will assign wilful penalties to the people that have undisclosed accounts. You had your chance to enter the OVDI, so now the penalities will be wilful 50-300%. So, outside of the amnesty program, beware. Otherwise, why do they want the information? 

If you still think the IRS and the United States government is a benevolent program, see this post: Ambassador Jacobson’s words as bad faith negotiation | The Isaac Brock Society All they have to do to show their good faith is to exempt RRSP, RDSP, RESP, RRIF, and TFSAs, and the nation of Canada from the reporting requirements. But they are not negotiating with the Canadian government in good faith.


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## Peg

I opted out of OVDI two months ago and have not heard anything yet. I'm not expecting to hear for a while but will definitely update when I do have any info!


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## Peg

PetrosResearch said:


> All they have to do to show their good faith is to exempt RRSP, RDSP, RESP, RRIF, and TFSAs, and the nation of Canada from the reporting requirements. But they are not negotiating with the Canadian government in good faith.


:clap2: Exactly --- all of those are already registered with the Canadian government!!!

:canada:


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## AmTaker

> The opt-out exposes the person to the full possibility of criminal charges just as would a Quiet Disclosure.


I'm not in the program, so it doesn't impact me, but the FAQ says that anyone who opts out falls back into the IRS's traditional VD practice. And AFAIK (based on Jack Townsend's comments), there has not been a case in at least 30 years where someone who joined the IRS's traditional VD practice in a timely and complete manner has been prosecuted. 



> If you still think the IRS and the United States government is a benevolent program, s.


There is a vast gap between being 'benevolent' and between believing that 
1) A DOJ tax that brings < 1000 criminal tax cases (most domestic) a year (most in cases where large amounts of tax is due, many in cases where illegal source income is involved, many targeted specifically at celebrities or visible tax protesters)is suddenly going to gear up, and bring criminal cases against several million expats, many of whom owe little to tax. 
2) Given how hard wilfulness is to prove beyond obvious badges of fraud, and given the difficulty of collecting even from US residents, and the near impossibility of collection from expats with few US assets, it would be very hard to see the willful penalty being asserted except against outright tax cheats (and even in such cases, the US government has normally asked for 'only' 1 year's penalty). 
3) I think the possibility of a non-willful penalty of around 10 per year is not an impossibility, although even those have been rare even for US residents, and again I have not heard a single case of a genuine expat being targeted with 
such penalties. 

The IRS's main remit is to collect money, and there are far lower hanging fruit that they could collect from rather than doing millions of court cases or even millions of audits of reluctant overseas citizens with few US assets. I'm not too concerned and having lived in and dealt with tax (excise and custom) authorities in third world countries with truly dysfunctional and corrupt revenue departments, I'm fully prepared to deal with the IRS if the necessity arises (which I doubt).


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## pwdunn

AmTaker said:


> I'm not in the program, so it doesn't impact me, but the FAQ says that anyone who opts out falls back into the IRS's traditional VD practice. ...


I agree with most of what you say. I am saying however that the United States has negotiated with the Canada in bad faith. They make promises that are not kept. With regard to the OVDI, the promise was a refund for those who reapply. But now apparently it comes with a threat. See IRS Says No New Relief Planned For Canadians

Penalty abatement for Canadian residents participating in the OVDI is available only if the taxpayer “opts out” of the program and successfully argues that he had “reasonable cause” for failing to file the returns. ... The IRS is on the lookout for taxpayers who attempt to bring their unfiled returns current by using “quiet disclosure” and those who attempt to resolve their filing obligations in this way will face harsh penalties.​
This is a threat. If you want a refund or relief from OVDI penalties, you must opt out. But if you opt out, you are now exposed to the harsher penalties and criminal charges. The IRS hopes that this option will not appeal to the risk adverse and that it is why it came with a severe threat of harsh penalties. those who are risk adverse did not want to do a quiet disclosure for fear of the risk of harsher penalties outside the program. Thus, the Ambassador's promise of relief came as bad faith negotiations with the government of Canada.

Your comparison of the United States with a third world country is apt. It is true. The tax practices and threats of United States persons abroad is really very similar only to Eritrea.

You also said: "The IRS's main remit is to collect money, and there are far lower hanging fruit that they could collect from rather than doing millions of court cases or even millions of audits of reluctant overseas citizens with few US assets." This is the questions then: why gather all that information? The easiest way to get revenue is to threaten with a big stick (mafia style) millions and hope that a few will pay up big time out of fright. This is the OVDI. This is the modus operandi. And this is why the Canadian Government has to take these bad faith negotiators back to the negotiation table. The reason why the IRS is taking this approach is exactly as you say: they will probably lose if they go to court. Easier just to threaten folks into compliance.


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## Mona Lisa76

I agree that the IRS used the OVDI to threaten expats into compliance. It scared me into a sheeple,  lol


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