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Continuing FATCA chaos impacts long term US expats in Canada
| Published: | 20 Oct at 6 PM |
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Problems with retaining bank accounts and complying with complicated regulations are hitting hard on all US expats, but those who emigrated to Canada many years ago are experiencing the worst effects.
Last February, the Canadian government finally signed on to co-operation with FATCA ruling as regards the disclosure of privately held offshore assets belonging to US expats resident north of the border. The steep penalties imposed on non-compliant foreign banks and the mass of paperwork required has led to many US and foreign banks cancelling US expat-held accounts.
Extreme steps are being taken by offshore financial institutions to limit their exposure to the IRS, leaving US expats in many world countries with limited or no banking services. The resulting chaos of closed accounts and the struggle to find local banks able to provide the usual services is spreading across the globe.
Patricia Moon, an American expat resident in Canada for some 32 years and with dual US/Canadian citizenship, finally gave up and renounced her US citizenship three years ago. When she became aware of the proposed introduction of FATCA, she back-filed years of returns as she was terrified she would lose all her savings.
As she began to understand the scheme's effect on honest US expatriates, she finally decided to renounce her US citizenship in protest. She wasn’t happy to give up her birthright, feeling devastated at first but angry and resentful later.
Moon is now one of the board members of the Alliance to Defend Canadian Sovereignty, a powerful protest group which has filed a lawsuit against the Canadian government. The lawsuit claims that signing up to FATCA is in breach of Canadian law protecting citizens’ financial privacy.
Canadian banks are forbidden to give clients’ financial information to the country’s tax agency, yet details of all assets held by US expats are now passed to the IRS. Even the formerly secretive Swiss banking industry is dumping its wealthy American expat clients, giving ‘regulatory issues’ as the excuse.
Last February, the Canadian government finally signed on to co-operation with FATCA ruling as regards the disclosure of privately held offshore assets belonging to US expats resident north of the border. The steep penalties imposed on non-compliant foreign banks and the mass of paperwork required has led to many US and foreign banks cancelling US expat-held accounts.
Extreme steps are being taken by offshore financial institutions to limit their exposure to the IRS, leaving US expats in many world countries with limited or no banking services. The resulting chaos of closed accounts and the struggle to find local banks able to provide the usual services is spreading across the globe.
Patricia Moon, an American expat resident in Canada for some 32 years and with dual US/Canadian citizenship, finally gave up and renounced her US citizenship three years ago. When she became aware of the proposed introduction of FATCA, she back-filed years of returns as she was terrified she would lose all her savings.
As she began to understand the scheme's effect on honest US expatriates, she finally decided to renounce her US citizenship in protest. She wasn’t happy to give up her birthright, feeling devastated at first but angry and resentful later.
Moon is now one of the board members of the Alliance to Defend Canadian Sovereignty, a powerful protest group which has filed a lawsuit against the Canadian government. The lawsuit claims that signing up to FATCA is in breach of Canadian law protecting citizens’ financial privacy.
Canadian banks are forbidden to give clients’ financial information to the country’s tax agency, yet details of all assets held by US expats are now passed to the IRS. Even the formerly secretive Swiss banking industry is dumping its wealthy American expat clients, giving ‘regulatory issues’ as the excuse.
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