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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Dear U.S. government, 1984 was NOT an instruction manual.

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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Dear U.S. government, 1984 was NOT an instruction manual.

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

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

The only reply I received was "contact the IRS"

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.

[QUOTE=Cafreeb12;652953]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.

[quote=Chill Canadian;653130]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?

[quote=Chill Canadian;653130]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.