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US expats mount legal challenge over Canada FATCA declarations
| Published: | 4 Sep at 6 PM |
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As the dreaded FATCA financial declaration requirements get under way, angry US expats living in Canada are legally challenging the Canadian government under the Rights and Freedoms Charter.
Canada was a later signatory to the US’s controversial scheme which forces foreign financial institutions to report all expat US citizens’ private investments and bank account details to the IRS. The expat group, after losing out on their anti-FATCA campaign, has now filed a lawsuit against the Canadian government, citing the country’s constitution and the 1982 Charter of Rights and Freedoms.
A leading plaintiff, Gwendolyn Deegan, alleges that the disclosure of her confidential financial arrangements is a serious breach of her right to privacy under Canadian law. However, according to a government spokesperson, the legal challenge is almost certain to fail as laws were passed allowing the legal exchange of information with the IRS before FATCA came into being.
The USA and one other state are the only two countries in the world which require annual tax returns from non-tax-resident citizens. Those who failed to report offshore earnings, investments and other sources of income in the past will face an IRS enquiry based on a comparison of their returns with information provided by financial institutions overseas.
Canada was a later signatory to the US’s controversial scheme which forces foreign financial institutions to report all expat US citizens’ private investments and bank account details to the IRS. The expat group, after losing out on their anti-FATCA campaign, has now filed a lawsuit against the Canadian government, citing the country’s constitution and the 1982 Charter of Rights and Freedoms.
A leading plaintiff, Gwendolyn Deegan, alleges that the disclosure of her confidential financial arrangements is a serious breach of her right to privacy under Canadian law. However, according to a government spokesperson, the legal challenge is almost certain to fail as laws were passed allowing the legal exchange of information with the IRS before FATCA came into being.
The USA and one other state are the only two countries in the world which require annual tax returns from non-tax-resident citizens. Those who failed to report offshore earnings, investments and other sources of income in the past will face an IRS enquiry based on a comparison of their returns with information provided by financial institutions overseas.
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