Anti-FATCA group hires U.S. lawyer
Here’s a quick update on the legal challenges to Canada’s agreement with the U.S. regarding the controversial FATCA law.
The group behind the suit, the Alliance for the Defence of Canadian Sovereignty, says it has retained U.S. legal counsel to challenge in Washington whether so-called “Accidental Americans” resident in Canada should be captured by the reach of FATCA.
The U.S. Foreign Account Tax Compliance Act requires non-financial institutions, including those in Canada, to provide U.S. tax authorities with financial information about so-called “U.S. persons.” In an international agreement that took effect on July 1, Canadian banks and financial institutions must provide the Canada Revenue Agency with details about accountholders who meet the definition of “U.S. person.” The CRA will then give this information to the U.S. Internal Revenue Service.
The anti-FATCA lawsuit claims that the definition of U.S. person is so broad that it would capture up to one million Canadians.
The Alliance has hired Washington-based attorney James Butera of Jones Walker LLP to advocate specifically for “Accidental Americans” — “those who are not U.S. citizens in any normal sense of the word” but who meet the technical, administrative definition of “U.S. person” but who have lived all their lives in Canada and feel no real connection to the United States.
“Growing numbers of Canadians dispute the right of the United States to impose U.S. citizenship on them without their express consent,” Mr. Butera says.
Some Canadians have been “renouncing” their U.S. citizenship, but U.S. State Department recently hiked the renunciation fee to US$2,350 from US$450. The Alliance has instructed Mr. Butera “to seek immediate relief for those affected by this fee.”
The Alliance says it has raised $200,000 in five months to fund its legal challenges.
