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Testimony: Businessman Abroad Affected By FATCA



John Richardson, Tax Advisor

To Whom It May Concern:

Thank you for the opportunity to comment to the Committee. Under normal circumstances I would introduce myself however, given present circumstances, I cannot as my status as a US Person, is being reviewed by the State Department at my request to validate my relinquishing acts in the early 1970’s.

I am a Canadian citizen, registered as a Canadian born abroad at birth, in the United States while my Canadian parents completed their post graduate education in the United States.

If you are unaware, with the exception of the United States, it is not a good thing to be considered a US Person (a newly coined status) for tax purposes, if you live outside the U.S. It is not a good thing to have any U.S. indicia at all. Who am I?

I’m a small business man that has owned and operated a small service company, successfully for 35 years. I attended elementary, middle school, high school and university in Canada.

I have never lived in the United States, have never voted in the United States and derive no US source income. I have never voted in a U.S. election, filed US tax returns, FBARS etc.

I have never been made aware of this responsibility nor to my knowledge was there any attempt by the United States to make her Diaspora aware of this. I live in a large, progressive urban area with easy access to communicate.

I’ve raised my family in Canada, coached high school football, rugby and hockey teams. I’ve raised funds for various community events, canvassed for Canadian Federal and Provincial politicians. In short, I think, contributed to Canadian society.

FATCA assumes I’m a tax cheat, a criminal under U.S. law. FATCA assumes my Canadian spouse and children, by virtue of our (former) joint accounts are reportable to the IRS under FATCA with no rights to financial privacy for any of us.

FATCA has harmed us and it is harming you, too. I used to take some small pride in my birthplace, Canada’s greatest friend, ally and trading partner. A country that has paid a great price to win independence and support equality and fairness for all. A country always willing to answer the call for help in a dangerous world. Now a country that must use coercion on the world to force its will to override indigenous constitutions and privacy laws by way of Inter Government Agreements, to deputize bankers to find people with the most tenuous and arbitrary ties to the U.S. Canada’s proudly inclusive society has been irresponsibly damaged by FATCA.

We now discriminate against certain Canadian citizens by place of birth. Canadian citizens, resident in Canada, paying taxes in Canada, have no rights to privacy in their most private affairs because of a foreign law. I no longer have a relationship with my bank of 35 years, as my accounts have been withdrawn.

I  no  longer  have  joint  accounts  with  my  wife  of  28  years.  This  is  problematic  and  has  created stresses  in  our relationship. I cannot maintain any significant bank accounts in my name. I cannot become compliant with U.S. tax law at this stage in my life without committing financial suicide due to the IRS penalty structures alone. It is doubtful that I owe any tax, until I die at least.

I am no longer a signing officer of my own company and have had to divest my shares to partners due to my U.S. Birthplace and onerous reporting requirements even though we conduct no business in the U.S. This has been extremely stressful.

I  no  longer  have  a  relationship  with  my  Member  of  Parliament,  who  has  quoted  the  party  line  throughout  this process  leading  up  to  signing  the  Inter  Government  Agreement  to  ratify  FATCA  in  Canada,  subordinating  our Charter  of  Rights and Freedoms  in  favor  of  the  banks.  He  has  not  responded  to  my  query  regarding  timing  of the U.S. promise of “symmetrical reciprocity” in the I.G.A. I have my doubts whether U.S. banks will comply.

I do not have access to the same retirement savings vehicles that my fellow Canadians do. A lifetime of prudent investing and savings gone for naught.

What I do have is empathy. Empathy for every person who has ever been persecuted due to their race, religion or the effects of Citizenship-Based Taxation or place of birth.

I am now such a person, because I was born in the United States of America. A newly minted second class Canadian because of FATCA and citizen ship based taxation.

Please consider carefully the very real harm this ill conceived law is doing to average citizens around the world.

Our financial matters are not “Foreign “or “Offshore” to us that live, work and raise families outside the United States.

It is time for the U.S. Congress to put this right and repeal FATCA, enough harm has been done.

If you distill it, a law that forces people to give up their citizenship and rights under great duress, cannot be fair by any measure.

Thank you for the opportunity to comment.

Name withheld -apologetically.

Original Statement Taken On February 10, 2015
United States Senate Finance Committee

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The Reality of U.S. Citizenship Abroad

My name is John Richardson. I am a dual citizen. I am a lawyer – member of the Bar of Ontario. This means that, any counselling session you have with me will be governed by the rules of “lawyer client” privilege. This means that:

“What’s said in my office, stays in my office.”

I am also a member of the American Citizens Abroad Professional Tax Advisory Council (PTAC). This is an advisory panel focused on assisting American Citizens Abroad in an FBAR and FATCA world.

The U.S. imposes complex rules and life restrictions on its citizens wherever they live. These restrictions are becoming more and more difficult for those U.S. citizens who choose to live outside the United States.

FATCA is the mechanism to enforce those “complex rules and life restrictions” on Americans abroad. As a result, many U.S. citizens abroad are renouncing their U.S. citizenship. Although this is very sad. It is also the reality.

3 comments

  1. BL says:

    If you are not performing any work inside the U.S. there is no issue. You may have extra paperwork to fill out if you don’t want to be taxed in the U.S.

  2. @BL

    That is not at all true. Americans abroad are liable for tax on all of their foreign income including instruments that are tax-deferred in their country of residence. They can be taxed for the sale of a principal residence, capital-gains tax free in Canada, the UK etc. They are taxed on “Obamacare” even though they are not eligible for it. If one chooses to renounce, there is the possibility of an Exit Tax on assets that are not at all connected to the United States.

  3. Nononymous says:

    Dual US-Canadian citizens resident in Canada, who have no US assets or business interests, should under no circumstances become compliant with US taxes. Period, full stop. Under the tax treaty they are protected from any attempt by the US government to collect taxes or penalties.

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