# FATCA reporting deadlines - for the banks



## FilingLate

Nonomous do you know if CRA will provide the bank info to US by July 1st? or is July 1st the deadline for the Banks to provide this info to CRA?


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## Nononymous

FilingLate said:


> Nonomous do you know if CRA will provide the bank info to US by July 1st? or is July 1st the deadline for the Banks to provide this info to CRA?


No idea. I suspect that 1 July is the deadline for banks to actually begin collecting or gathering this information, rather than to report anything. Given that we're about seven weeks away and there has been absolutely zero publicity of any sort, I'm expecting a quiet rollout.

As far as I know, Canadian banks are only reporting to CRA, not directly to the US. That was the point of the IGA. And I suppose it's also to make it more palatable from a PR perspective (good luck with that).


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## Bevdeforges

Have not read through the Canadian Bilateral Agreement, but in the French one, July 1st is the date the data collection is to begin. There was something in there about how the original date was supposed to be 1 January 2014, but the French claimed they couldn't meet that date for the start of the data collection (and I heard that the US wasn't really ready to receive information, either).

I suspect the same is true for the Canadian agreement. 
Cheers,
Bev


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## Pacifica

@ FilingLate,

I agree with Nononymous and Bev. I don’t think they could possibly start reporting to the US on July 1st. As I understand it, it’s being phased in, first phase being the banks have to identify the US persons' accounts first.

I haven’t followed FATCA all that closely – so take what I say with a grain of salt – but as I understand it, July 1st is when the financial institutions in Canada are to begin checking for US indicia when onboarding clients. They will also have to search their records for US indicia on existing accounts, as you probably know as well (which I guess is what relevant to you as I see you are from Canada but in the US). I think the actual reporting to the US is to start in 2015 (not sure of that date though).

There may be some concrete information about this in these links from the Ministry of Finance website:

Text of the Canada-US FATCA IGA


Frequently Asked Questions

The Alliance for the Defence of Canadian Sovereignty is commencing _Charter _litigation again the imposition of FATCA in Canada. Should be interesting and I wish them well!


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## Nononymous

It's an open question how hard the banks will work on this. They will search for US mailing addresses, obviously. But there's no citizenship information kept currently, so anyone with a Canadian address likely won't hear from their bank unless they have a very high balance.

On 2 July I will try opening a new account somewhere, out of curiosity. It might be as simple yes/no question (which one might choose to answer untruthfully) or they may want to see some paperwork.


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## BBCWatcher

Frequent online or mobile banking access from the United States? Frequent ATM, debit, or credit card usage within the United States? Caller ID from a U.S. area code when calling your bank? Multiple U.S. postmarks on correspondence sent to your bank?

Large and/or frequent funds transfers to/from the United States? Receipt of payments from indicative parties, notably direct deposit of a tax refund from the IRS or of U.S. Social Security benefits? Frequent and/or large financial transactions with previously identified U.S. citizens, especially those sharing the same surname? Payments/charges from your account for products and services likely tied to U.S. citizenship, such as payments to the U.S. State Department in the exact amount (or in an exact multiple) of U.S. passport fees?

Those are a few examples of indicators if one were performing a reasonably diligent search. Yes, it's a bit scary how many statistically relevant inferences one can draw from otherwise "ordinary" data if one wishes to look. Governments and financial institutions already look for patterns of concern for other purposes, such as anti-money laundering, fighting tax evasion, and combatting ATM/debit/credit card fraud, as examples.

I have no idea whether Canadian financial institutions will perform these types of searches. I'm only presenting some of what's possible.


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## Nononymous

The example above doesn't really apply to the off-the-radar dual citizens in Canada, who more than likely have minimal financial ties to the US. 

What that search would find, funnily enough, is Canadian citizen snowbirds who spend five months of the year at the condo they bought in Arizona.

To the broader point, yes, banks could determine all sorts of things. The question is, do they want to? Doing so would cost them money, and piss customers off. I have a feeling they will do the bare minimum to satisfy the terms of the IGA. (Even the Canadian authorities appear to be on board with that.)

PS Dammit, I should have paid cash to renew my US passport. What was I thinking?


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## BBCWatcher

Nononymous said:


> The example above doesn't really apply to the off-the-radar dual citizens in Canada, who more than likely have minimal financial ties to the US....
> PS Dammit, I should have paid cash to renew my US passport. What was I thinking?


I gave examples that raise yellow flags only. One cannot draw firm conclusions from most of the examples I gave, especially if considered separately, although that passport payment example is a strong one as you've now realized.  (Who else would be paying a U.S. embassy or consulate that particular amount of money except a U.S. citizen?)

The fact is that it's at least extremely inconvenient to avoid detection if someone is determined enough to find you and focused enough to make reasonably accurate preliminary assessments about you. For example, a non-citizen Canadian snowbird will display certain revealed patterns that are very possibly different than an otherwise similar U.S. citizen would. Data mining is about starting to paint a picture, not simple "IF THEN" queries. Data mining is not at all new, but it continues to improve.

To reiterate, these are theoretical examples only. We don't know yet exactly what reality will hold.


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## Nononymous

I'm pretty sure I paid for that passport with my German credit card, come to think of it.


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## Bevdeforges

If France is any indication, the banks will be doing strictly what they are asked to do. No more, no less. The terms of the Bilateral Agreement seem to indicate that the US authorities aren't all that interested in the standard sorts of tax-free savings accounts, nor in nickle and dime standard sorts of investments that aren't normally indicators of "tax evasion" activities.

US place of birth - maybe. But small change transactions, such as the $100 or so it costs to renew a passport - I don't think so. The banks might notice large transfers from tax haven countries. But as long as any other transfers are properly reported and come from countries with some form of tax reporting controls, I don't think they are going to get overly excited about digging deeper.
Cheers,
Bev


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## Pacifica

The US indicia, which Canadian banks are to search for, are found in Annex 1 of the Canada-US IGA 

This example is for pre-existing individual accounts with a balance that exceeds $50,000 but do not exceed $1,000,000:

Annex I, s. B(1) Electronic Record Search

(a) Identification of the Account Holder as a US citizen or resident
(b) Unambiguous indication of a US place of birth
(c) Current US mailing or residence address (including a US post office box).
(d) Current US telephone number
(e) Standing instructions to transfer funds to an account maintained in the US
(f) Currently effective power of attorney or signatory authority granted to a person with a US address
(g) An “in-care-of” or “hold-mail” address that is the sole address the Reporting Financial Institution has on file for the Account Holder. In the case of a Preexisting Individual Account that is a Lower Value Account [under $1 million]. an “in-care-of” address outside the United States or “hold mail” address shall not be treated as US indicia. 

I also doubt that the banks will search for anything more than they’re required to by law, and am also getting the feeling, from the CRA’s draft Guidance Notes (link below) and the article which Maz57 pointed out, that the Canadian government is somewhat more tepid about FATCA implementation than some other countries may be. (Still want to see it defeated though.)

I just realised that the Department of Finance links I posted in my comment last night don’t work, so I’ll post the urls here, and if the links don’t work, you could cut-and-paste them into your browser

*Dept of Finance: Canada-US IGA:*
http://www.fin.gc.ca/treaties-conventions/pdf/FATCA-eng.pdf

*Dept of Finance Frequently Asked Questions about the IGA:*
Frequently Asked Questions: Foreign Account Tax Compliance Act (FATCA) and the Intergovernmental Agreement for the Enhanced Exchange of Tax Information under the Canada-U.S. Tax Convention

*Canada Revenue Agency: Draft Guidance Notes on financial institution information reporting*
I can't get this URL to show up at all. But if you go to the Isaac Brock Society site, and then add:
/wp-content/uploads/2014/03/CRA-Draft-Guidance-for-Financial-Institutions-March-06-2014-2.pdf
that will bring you to it.


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## Nononymous

Pacifica said:


> (a) Identification of the Account Holder as a US citizen or resident
> (b) Unambiguous indication of a US place of birth


Note that in the past, neither of these pieces of information would typically have been collected by a financial institution. So there is would be very little data.

To summarize:

- Most tax-exempt vehicles (RRSP, RESP etc.) completely excluded from reporting requirements.

- Existing accounts under $50k not looked at whatsoever. 

- Record check for US addresses or other indicia for existing accounts between $50k and $1 million.

- Proactive investigation for any existing accounts over $1 million.

Under those rules, I'm safe.


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## BBCWatcher

Pacifica said:


> (b) Unambiguous indication of a US place of birth


Purchase of one's U.S. birth certificate with a Canadian bank's debit or credit card I suppose would count. 

Nononymous, a German credit card to pay a U.S. passport renewal fee, well, that's OK then. Germany doesn't have a FATCA agreement...oh, wait. 

Yes, I'm (mostly) joking.


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## Nononymous

Ultimately we are all findable. 

I checked, oddly enough. The transaction is described as DEP US EMBASSY BERLIN - nothing more. I'm not sure that counts as US indicia - I could be a German (or Canadian) paying for some sort of visa.


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## Bevdeforges

I think the point here is that, just as the banks are being asked to "know your customer" it may be a good idea for Americans living overseas to "know your bank."

That involves reading the Bilateral Agreement that applies - to see which banks and what sorts of accounts are exempt from reporting, and to know what information is and isn't on file at your bank. 

In France, for example, your place of birth is part of the normal identification information and is held in your records. It's also SOP for the banks to report "unusual transactions" to the Banque de France (which is also the entity to which they will be reporting FATCA information) - but for the banks here, that has a very specific meaning. I was asked about a deposit coming from my employer after I had started getting unemployment payments, but only had to confirm that my severance was being paid out in installments. Payments running through my credit card aren't questioned as long as they are under the various daily and monthly transaction limits (which any charges for birth certificates or passport renewals would certainly be). And, the cherry on the cake is that my bank clearly falls within the definition of a financial institution that is exempt from FATCA reporting anyhow.

You need to assess your own potential risk and then manage your affairs accordingly. The IRS clearly isn't going to track down small time overseas residents with dead-normal day-to-day types of savings accounts that won't yield much, if anything, in back taxes.
Cheers,
Bev


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## BBCWatcher

Nononymous said:


> The transaction is described as DEP US EMBASSY BERLIN - nothing more. I'm not sure that counts as US indicia - I could be a German (or Canadian) paying for some sort of visa.


You could be...until one checks the amount. I haven't checked, but I assume that visa fees and the passport renewal fee are different monetary values.

Moreover, would the typical non-citizen be paying the passport fee amount every ~9 years?

Again, we're dealing in the theoretical only, but none of this stuff is rocket science if someone is looking. Keep in mind also that the banks aren't required to establish "beyond a reasonable doubt" whether the individuals they report are U.S. persons. This isn't a court of law. It's just a "let's look into this one a bit more" screen, along the lines Bev describes.


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## Nononymous

Sigh. If someone is looking...

The German bank could also dig out the photocopy of my Canadian passport that it has on file and see the US birthplace.

What we're trying to establish here isn't whether I or anyone else is findable - they are, once someone starts looking hard enough. We're trying to establish is what might routinely happen with FATCA. And as far as I can tell, unless you have $1 million in non-registered accounts or investments (i.e. not tax exempt and excluded) then you won't be flagged by a Canadian bank's record search if you don't have some species of US address on file or make *regular* transfers to the US. And if you have less than $50k in non-registered accounts they won't look at all.

I may be dead wrong here, but given my understanding of human nature (torn between greed and laziness) I would expect banks to do the *minimum* needed to meet the terms of the IGA, not go ferreting about hunting down Americans by following leads and making assumptions. They want to avoid penalties; they're not earning commission by finking on their own customers.

One anecdotal example, for what it's worth. Earlier this year the family broker, with whom I have a piddling RRSP, asked if I was a US citizen, due to "new compliance requirements." I said that my official answer was that I refused to answer the question. A few days later the IGA was announced, with RRSPs being exempt from reporting. At this point he told me that he does not need to ask. He knows full well I'm dual but it's no longer a concern.

I've probably left enough of a paper trail just posting here. For all I know it would take someone skilled about ten seconds to crack the membership database here (where even is this thing hosted anyway?) and run down my IP. Do I care? No.


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## jbr439

Pacifica said:


> The US indicia, which Canadian banks are to search for, are found in Annex 1 of the Canada-US IGA
> ...
> (a) Identification of the Account Holder as a US citizen or resident
> (b) Unambiguous indication of a US place of birth
> ...


Are the banks required to inform the customer:
1) they've been flagged
2) the reason they've been flagged.

It would seem that (b), and maybe (a), would run into Charter issues.


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## Nononymous

Good question, and no idea. Someone ought to call up customer service and ask (not that they'd receive an answer). I guess we'll find out in the coming months. I expect that might be part of the upcoming challenge.


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## Nononymous

Nononymous said:


> Good question, and no idea. Someone ought to call up customer service and ask (not that they'd receive an answer). I guess we'll find out in the coming months. I expect that might be part of the upcoming challenge.


Also, for both (a) and (b) it's hard to imagine what that would be for the vast majority of cases, since that information was not typically collected when accounts were opened.


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## BBCWatcher

Perhaps relatedly, I very recently received a demand from a financial institution to sign a statement swearing that I am tax compliant. According to the letter, effective July 1, 2013, Singapore criminalized tax offenses (offences), whether domestic or international, as a crime of money laundering. That is, if you deposit funds in a Singapore-based or Singapore-associated financial institution that you didn't (or don't) pay taxes on, no matter where the taxes are legally owed, that's considered a domestic money laundering crime in Singapore. Clever!

So, the financial institution wants me to sign a statement swearing that I'm not doing that. No problem in my case, but presumably some would have problems signing such a statement. Singapore and the U.S. have a FATCA agreement in place, so perhaps this letter was inspired by the introduction of that U.S.-Singapore agreement. However, this international tax evasion criminalized as money laundering law is not specific to U.S. taxation.


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## hawknest

If you've paid your taxes, before you left the USA, like we did 22 yrs ago - why would the banks want to give up that information?


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## Nononymous

Because the US government will threaten to hit the foreign banks with 30 percent withholding on all their US transaction if they don't cooperate.


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## Bevdeforges

It's also worth noting that Singapore is one of those countries that is considered to be a "tax haven" - though oddly enough, the US (or certainly the state of Delaware) is another notorious international tax haven.

Those with investments in recognized tax havens are going to have to jump through a few additional hoops.
Cheers,
Bev


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## BBCWatcher

Bevdeforges said:


> It's also worth noting that Singapore is one of those countries that is considered to be a "tax haven"....


Singapore is considered a comparatively low tax jurisdiction for interest, dividends, and capital gains. It has never been considered an uncooperative tax haven, and it is one of the 122 members of the OECD's Global Forum on tax transparency. It may be the only one, or at least one of the few, that treats funds held domestically as the fruits of foreign tax evasion to be a domestic felony of money laundering.

The days of Asian despots and crooks depositing suitcases stuffed with cash in Singaporean banks are long, long gone.


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## Bevdeforges

It's apparently still on someone's watch list - at least according to some recent articles I've read. Reputations can be difficult to shake off.
Cheers,
Bev


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## BBCWatcher

Which watch list?


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## hawknest

Nononymous said:


> Because the US government will threaten to hit the foreign banks with 30 percent withholding on all their US transaction if they don't cooperate.


They tried that with Mauritius and Seychelles who essentially told them to pound sand. Even Switzerland, tho having paid UBS penalties, is still a safe haven.


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## hawknest

Bevdeforges said:


> though oddly enough, the US (or certainly the state of Delaware) is another notorious international tax haven.Those with investments in recognized tax havens are going to have to jump through a few additional hoops.
> Cheers,
> Bev


Bev - the Feds know who's who in Delaware. However Wyoming, Nevada and South Dakota have insulated themselves with LLc's.


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## Bevdeforges

hawknest said:


> Bev - the Feds know who's who in Delaware. However Wyoming, Nevada and South Dakota have insulated themselves with LLc's.


The US Feds do, sure. But this reporting thing is going international (via the OECD) and part of the international agreements is that the US Feds are going to give up some of that Delaware information to France and the UK and other countries who think their residents may be hiding something there.
Cheers,
Bev


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## maz57

Bevdeforges said:


> It's also worth noting that Singapore is one of those countries that is considered to be a "tax haven" - though oddly enough, the US (or certainly the state of Delaware) is another notorious international tax haven.
> 
> Those with investments in recognized tax havens are going to have to jump through a few additional hoops.
> Cheers,
> Bev


Is that not the basic premise of FATCA? The assumption from the US government perspective is that every other country in the world is a potential tax haven and US persons who have assets in those other countries must be punished for having those "offshore" accounts. 

The financial institutions of these non-US countries are assumed to be complicit in this tax evading offshoring and must comply with FATCA mandated reporting, either directly or indirectly via IGAs. US persons living in those countries must also comply with FATCA mandated reporting that no homelander is subjected to.

At the end of the day, the CBT of the US is fundamentally unenforceable so the US is attempting via FATCA to force every other government and financial institution in the world to assist in that enforcement.


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## hawknest

I hope no one here has accounts in Panama!


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## BBCWatcher

maz57 said:


> At the end of the day, the CBT of the US is fundamentally unenforceable so the US is attempting via FATCA to force every other government and financial institution in the world to assist in that enforcement.


FATCA has very little to do with citizenship-based taxation. It'd still be relevant and useful otherwise.

Italy, to pick an example, has much more onerous financial reporting requirements than the U.S. has ever had. They have the infamous Form RW. The tax authorities there are _delighted_ to get financial data from the U.S. and elsewhere.


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## Bevdeforges

maz57 said:


> Is that not the basic premise of FATCA? The assumption from the US government perspective is that every other country in the world is a potential tax haven and US persons who have assets in those other countries must be punished for having those "offshore" accounts.
> 
> The financial institutions of these non-US countries are assumed to be complicit in this tax evading offshoring and must comply with FATCA mandated reporting, either directly or indirectly via IGAs. US persons living in those countries must also comply with FATCA mandated reporting that no homelander is subjected to.
> 
> At the end of the day, the CBT of the US is fundamentally unenforceable so the US is attempting via FATCA to force every other government and financial institution in the world to assist in that enforcement.


I wouldn't put it that way. We have a similar reporting obligation here in France - though it's much simpler: your list your foreign bank accounts (no matter the balance) and foreign "assurance vie" accounts as part of your individual income tax filing each year. I list my US retirement accounts as "assurance vie" though I suspect they really might qualify as "bank accounts." In any event, I've disclosed the information and if they have questions, they can always ask. 

I still think it's very interesting which accounts and banks they have exempted from the FATCA requirements - and I think that gives us an interesting perspective on what it is they are "really" trying to find out.

To my mind, it's one of those "render unto Caesar" situations. 
Cheers,
Bev


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## hawknest

The UK started all this and the USofA climbed onboard the train. 
http://www.withholdingtaxcongress.com/us-treasury-releases-model-2-iga-fatca/


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## hawknest

found it


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## someNri

Nononymous said:


> ...
> ...
> And if you have less than $50k in non-registered accounts they won't look at all.


New to this forum and glad to find it! 
So with this reporting coming into effect, does it make sense to reduce / try to maintain individual account balance in overseas account to under $50K before July 1.


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## Bevdeforges

It depends on which country you have your accounts. Some of the bilateral agreements with the US start with account information as of 31 December 2013. Others have been put off until July 1st of this year.
Cheers,
Bev


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## BBCWatcher

And the answer is no if you're complying with the law, including reporting obligations. Live your life, including your (legal) financial life.


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## Nononymous

someNri said:


> New to this forum and glad to find it!
> So with this reporting coming into effect, does it make sense to reduce / try to maintain individual account balance in overseas account to under $50K before July 1.


It might, if you wished to conceal the existence of those accounts. You should be reporting them through FBAR. If you are not, and don't wish this fact to be discovered via FATCA, then you might want to look at the IGA for your home country and determine what the reporting thresholds are and see if there's a way you can prevent any reporting of your accounts (balance below $50k, removal of US mailing addresses, etc.).

Judging by the flags, I'm guessing that you are an Indian living in the US, with accounts in India. You might want to be careful here. I would certainly be more careful in your case than in mine, a Canadian who happens to be dual living in Canada. I can essentially put up a billboard just south of the border saying "**** You Uncle Sam" followed by my name and address, and the US can't currently touch a penny.


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## maz57

Nononymous said:


> I can essentially put up a billboard just south of the border saying "**** You Uncle Sam" followed by my name and address, and the US can't currently touch a penny.


While you and I are pretty much on the same page most of the time, Nononymous, in this case I think I'd put that billboard on the Canadian side of the border!


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## Nononymous

maz57 said:


> While you and I are pretty much on the same page most of the time, Nononymous, in this case I think I'd put that billboard on the Canadian side of the border!


Fair enough, but facing south!


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