The @ACDSovereignty #FATCA appeal has started and in the early moments. The plaintiff/Appellant's lawyer Greg D. is off to a good start ...
Three arguments: 1. Standard Of Review 2. Confusing the S. 8 test of unreasonable search with S. 1 "reasonable limits" 3. Question of whether the Appeal court can conduct a hearing on the S. 1 issue.
Is the ITA of Canada a regulatory statute or a criminal statute? #FATCA info can be sent to the USA for the purposes of a criminal prosecution. Judge seems to be suggesting that the criminal aspect was not raised at trial ...
Judges asking about where a hypothetical criminal prosecution would/could be ... USA or Canada or both? Asking Greg B. to clarify which is country is relevant to his argument ...
Judges now focusing on whether it can be proven that a US prosecution is possible. Suggesting that this would need to be independently proven ... Seriously, ...
Can "judicial notice" not be taken of the reality that US tax law can trigger criminal prosecutions?
Greg B. is now talking about the fact that it is very difficult to "get rid" of US citizenship. This is good bc he is talking about the people who don't regard themselves as US citizens who are caught in this nightmare.
He is now discussing the difference between tax information requested under the treaty and automatic information exchange which is #FATCA. Argument is that FATCA is too broad bc it captures the info of tax compliant people and therefore violates Charter S 8. Similar to Jenny case
The Judges are focusing on the issue of Criminal prosecution - seem to be suggesting that this issue was not raised in the trial - and therefore can't be raised now. Greg B is doing a good job in response.
BTW there is not a single observer in the courtroom. Every participant is masked. Greg D. is now referencing where tax evasion was referenced in the MacTavish trial decision.
Greg D: "The court (trial) clearly had tax evasion in mind" ...
Judges now asking about MacTavish statement that the "privacy interest is minimal". Suggestion there is no privacy interest at stake. (Of course CDN law was changed by FATCA to overrule privacy rights ...)
Greg D. There is US law that can extract data from FATCA that can go to the USA for the purposes of criminal prosecution. Judge: Seems to be saying that the criminal aspect is not an issue in this case ...
Very problematic bc, if criminal prosecution is not an issue, then the Charter S. 8 argument is weakened ...
Judge: Evidence from Bryan Skarlato (US tax lawyer) says that criminal prosecution unlikely ... Appears that the court wants to avoid the issue of possible criminal prosecution ... Greg D: Unlikely does not mean impossible.
Continuing discussion around the question of whether possibility of criminal prosecution should be an issue in the appeal?
Now Greg D. turns to first issue which is "standard of review" of the trial decision - which he argues should be correctness ...
Argument is that Charters S. 8 and S. 1 were conflated by the trial judge and should be considered separately. By conflating the two sections, and all the balancing takes place in S. 8, the S. 1 is meaningless ...
Judge responds by saying that is how many S. 8 cases are decided (importing S. 1 reasonable test in S. 8 analysis), but Greg D. argues that it should depend on the context of the case ...
Although Greg D is working hard and doing a good job, it is clear that he is climbing a steep hill. He now argues that the international context of the facts should strengthen the claim that S. 8 and S. 1 should be analyzed separately.
I have always seen FATCA as he equivalent of an "extradition" of information. It would be interesting to see how the court would respond if this were an extradition of a person.
Could the US simply force Canada to send the criminal records of all Canadian residents to the USA for analysis?
Greg D. is arguing that the "harm to Canada" should be analyzed under S. 1 and not under S. 8 (which seems to make sense)
Judge suggesting that there is an exchange of information under #FATCA which is absolutely BS. Greg D. does NOT respond by saying that there is no exchange ...
Judges continue to focus on reciprocity of information. Again, Greg D. does NOT answer with the word "No". There is NO exchange of information under the FATCA IGSs. Pleas say it!! The answer is NO!!!!!
Judges still talking about this issue of reciprocity (suggest that Canada is getting something in exchange).
Court is ready to take a 15 minute break before Greg D. moves to argument 2 (the S. 8 argument).
Here we go after the break. Greg D. is talking about how "balancing the interests" under Charter S. 8. Is this a regulatory tax case? Or is it something more than regulation? What is the role of the purpose of US legislation?
Arguing that Income Tax law has multiple purposes. Some of which is regulatory and some of which is more ... Seems reasonable. Therefore, tax law is NOT as a whole regulatory. The specific provisions may have different purposes.
Judges now asking how the ITA should be interpreted in light of the decision of trial judge in paragraphs 88 and 89 of decision that the trial judge decided that the income tax laws are regulatory. Very very dangerous ...
Judge now suggesting that bc the FATCA IGA and legislation doesn't specifically reference a criminal purpose that this case should be decided in a regulatory context and nothing more (my paraphrase). (This is totally absurd. The US has started extraditing some people over tax.)
There is nothing about this discussion that sheds any light on how individual lives have been and continue to be destroyed over the @FATCA and @citienshiptax issues.
I am starting to get lost in the technical aspects of the discussion ...
Greg D. There is no case that draws a distinction between the "unreasonable language" in S. 8 and the "reasonable" language in S. 1
Greg D. is now citing early Charter cases including the S. 8 case of Hunter ... which says that where there is a criminal purpose a judicial authorization is required. But, he needs to establish this is criminal and not regulatory.
It seems to me that some of this #FATCA stuff is regulatory, some of it is criminal and that all of it is obscene. There is no reciprocity. It is overly broad. It enforces the immorality of US @citizenshiptax. It is destroying lives. It forces people to renounce US citizenship ..
Judge: Is oversight of the FATCA mechanism (sending information to the IRS) is feasible? Greg D does mention "dual Canada/US" citizens for the second time today ...
Greg D. suggesting that there needs to be some oversight. For example how does one prevent over reporting. He says it's easier for the banks to send anything/everything rather than be noncompliant. He is arguing that oversight is required by law.
Here we go ... Judge is talking about CRS. Suggestion seems to be (although not articulated) that this is already taking place in the context of CRS. But, FATCA is different from CRS ...
CRS: Info sent from country where the person doesn't live to country where does live. FATCA is he opposite: info goes from country where person does live to country where does not live. He needs to distinguish CRS from FATCA ...
Greg D. nows says he has about 14 minutes left ... and he is moving to Charter S. 1 Oakes test ... to explain how S. 1 operates differently from balancing test in S. 8 (I remember reading Oakes about 1000 times (it is one of the first Charter cases of Dickson court).
His point seems to be to reinforce that S. 8 is different from S. 1 and that harm to Canada should be considered under S. 1 and should not be part of the S. 8 analysis.
Greg D: 1. Draw a distinction between S. 1 and S. 8 including the purposes 2. Find that international negotiations are S. 1 considerations and not S. 8 considerations. (The trial judge considered all the threats of harm from the USA in the context of S. 8)
Greg D: Because there is no trial court ruling with respect to S. 1 the Appeal court does not have the right to do a S. 1 analysis. The judges are disagreeing with him asking where does the Federal Court Act say that?
Greg D: Stands by his argument that the appeal court has no jurisdiction to conduct a S. 1 hearing bc the trial judge never did. Alternatively, there is a breach of S. 8
Greg D concludes arguments. We have a 75 minute lunch break.
Gov lawyer begins his case with: Purpose of #FATCA IGA is to protect Canada and NOT as a fishing information ....
Claims that FATCA is somehow analagous to a CDN T4 information slip. Therefore, FATCA is simply compliance focused legislation. In any case, that isn't the issue. The issue is the CDN gov caving into the US FATCA demand.
Claims FATCA is basic regulatory, compliance focused legislation. But, the issue is NOT what this is from a US perspective. This issue is Canada's complicity in this scam. What does this have to do with Canada doing the US bidding?
Does the fact that there could be a criminal prosecution mean that Charter S. 8 is triggered? But, again the issue not the intent from a US perspective of the FATCA intent. The issue is Canada's going along with this.
Claims Greg D. is trying to bootstrap Charter S. 8 into tax legislation. But, again we are not analyzing how this would be evaluated if Canada did this to its own taxpayers ...
Gov - Standard of review of review is not correctness, but the standard applicable to mixed facts and law. Legal framework of S. 8 should be applied to the facts of the case. Arguing for the regular standard of review. If the application of S. 8 is correct, then deference ...
JR comment ... What's amazing about these FATCA lawsuits is that there is never any mention of the injustice and human suffering. It's like describing a war without describing the individual suffering and loss of life. I have said from day 1, that impact on people is the issue
Arguing that trial judge correctly applied the S. 8 analysis: 1. Was there a seizure and 2. Was the seizure reasonable?
Arguing a three part test for reasonable: 1. Was there a seizure? 2. Authorized by law 3. Law authorizing seizure reasonable?
Now arguing that the test in Thomson newspapers doesn't apply in all contexts. Basically he is saying that the seizure of account information is in a regulatory context with respect to information where there is no expectation of privacy ...
SCC has ruled that the standard for search and seizure is contextual and flexible. The trial judge didn't do anything wrong and employed an analysis consistent with the SCC case law ...
Conclusion: No error in fundamental legal framework the trial judge employed in analyzing S. 8. Basically, argument the trial court did nothing wrong. Four points:
Point 1: Nature of privay interest 2. PUrpose of scheme 3. Regulatory or criminal 4. Mechanism of seizure ... Trial judge looked at each of these and did what SCC says should be done in a S. 8 claim ...
Re 1: Limited expectation of privacy - therefore hard to make a S. 8 claim in relation to this information ...Taxpayers have a low expectation of privacy with respect to information relevant to tax compliance
Judge continues hammering away at whether there is an evidentiary basis to even consider that criminal liability should be discussed in this case at all. Taylor says that risk of prosecution is remote but possible under the law (not "zero risk")
Taylor continues with suggesting an analogy between CDN T4 and sending FATCA info to the CRA. I.e. nothing wrong with AEOI in principle. This is absolutely idiotic. We are NOT talking about Canadian internal matters. We are talking about sending the info of Canadians to the IRS.
Point 2 - Purpose of legislation: The purpose of the FATCA legislation improved the CDN economy and the situation of customers bc they are exempt from direct reporting to the IRS (plus the carveouts for registered accounts) So, his point is that the FATCA IGAs are good for banks
Right on!!! The #FATCA IGAs are good for Canada!!!!!!! But, the purpose of a Charter of Rights is to protect minorities from majorities
Also saying that if Canada did nothing the CDN banks would have complied with Canada anyway.
Point 3 - nature of legislation: Regulatory or criminal? Obviously arguing that tax enforcement is merely to enforce regulatory compliance.
Binding precedent from SCC says that tax legislation is regulatory.(JR: But, again this is not about CDN tax!!!)
Don't treat the income tax act as anything but regulatory!! But, again we aren't talking about tax legislation is general.
With respect to the "Dragnet - Overly Broad" argument - he says that trial judge dealt with this issue/question. He continues to make the analogy between the CDN T4 and #FATCA. He also says it helps USA find its citizens ...
The information being reported by the banks is information they already have. The banks are not creating more information ... Therefore, it's not intrusive. But the issue should be impact on individuals and not on the banks.
Continues on with the point that the judge just did her job and did it properly. Taylor is choosing to NOT speak to the Charter S. 1 issue ...
Taylor ends his submissions on that point and is taking questions from the judges.
Greg D - now in reply ...
Nothing new - the appeal has concluded. I will say that the whole process has been an exercise in obscuring the reality that principal effect of Canada signing the FATCA IGA was to assist the USA imposing it's full tax code on CDN citizens resident in Canada with @dualcitizenhip.
After having sat three all of the #FATCA Canada hearings during the whole journey I report there has been no discussion of #PFIC, #ForeignTrust #penalties #SubpartF #GILTI @Transitiontax, etc. Absolutely unbelievable!
How can this whole thing have played out over eight years with no evidence of how #FATCA and @citizenshiptax impact Canadian residents? It is truly truly incredible. In conclusion: Never confuse law with morality, but to not consider this in a Charter case?
But nevertheless, thanks to Greg D for doing his best after having been dealt a very bad hand from the trial court decision! Although I am angry, I do acknowledge the difficulties and the obstacles he needed to overcome.

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More from @ExpatriationLaw

Dec 11, 2024
Labor Rally Taking Place Now On Capital Hill To Support A Vote On The Social Security Fairness Act (WEP provision) youtube.com/live/gT5uZYesX… x.com/IRS_MEDIC/stat…
Interesting and motivating ... Frequent references to the fact that the fight to repeal WEP and GPO has been going in since 1983 (40 years). Adovacy is difficult! Image
Image
Image
Read 11 tweets
Nov 29, 2024
Principle 7 - understanding what the #endingdoubletaxation of #Americansabroad means:

It's critical to understand how US @citizenshiptax makes it harder and more expensive for U.S. companies to hire U.S. citizen employee/managers/executives. Nobody understands this better than Jim Gosart - @jgoshksk ...
@CitizenshipTax Wisdom of @jgoshksk -
@CitizenshipTax More wisdom from @jgoshksk -
Read 4 tweets
Nov 16, 2024
Principle 6 - understanding what the #endingdoubletaxation of #Americansabroad means:

The biggest obstacle to change to the US @citizenshiptax extra-territorial tax regime is NOT Congress or Treasury

The biggest obstacle to change is (amazingly) #Americansabroad as a group.

Because, @citizenshiptax affects different people very differently, it is hard to (1) define the problem (people understand it in how it affects them) and (2) willingness to actively campaign for change.

All #Americansabroad must come together to demand the severance of citizenship from @taxresidency.
Let's consider different groups and imagine how
@citizenshiptax affects members of those groups. Those with their financial center of gravity in the US might object to the compliance/filing requirements. But are not likely to experience the destructive affects of having a financial center of gravity outside the USA.

Least impacted: 1. Those who retired in the USA and moved abroad 2. Wealthy Americans who move abroad 3. Employed expats who are temporarily abroad.

Most impacted: 4. Emigrants living permanently abroad 5. Accidental Americans who file U.S. taxes

Could go either way: 6. Digital nomads (often use FEIE to avoid paying tax anywhere).
The key point is that because @citizenshiptax impacts people in different ways it is hard to get universal support for severing citizenship from @taxresidency.

Most people want their specific problem solved but are NOT supporters of completely ending the extra-territorial tax regime.

But, it's "All For One and One For All!"

Carveouts will NOT work!
Read 5 tweets
Nov 15, 2024
Principle 5 - understanding what the #endingdoubletaxation of #Americansabroad means:

Starting in "Principle 1" I explained that the problem of the #doubletaxation of #Americansabroad exists in relation to non-US income sources received by individuals who do NOT live in the USA (AKA #Americansabroad.

Key point: If @USCitizenAbroad does NOT have non-US income sources and assets, the US @citizenshiptax will be experienced mostly as filing a US tax return while living outside the USA. From that perspective it's easy to see why non-resident US citizens with US income sources and assets are not hugely impacted by US #citizenshiptaxation.
Let's be a bit more precise. Imagine you have a @USCitizenAbroad with an investment portfolio of US stocks, US Social Security or a US pension. Even if taxed by the non-US country, the US generally has first right of taxation (it's US source income). US will NOT impose punitive taxation bc it's US source income. (The other country will generally provde a credit for US tax paid.
Now let's consider a @USCitizenAbroad with a non-US investment portfolio (possibly including non-US mutual funds), non-US pension, small business corp located outside the USA the situation is the opposite of having all US based assets. The non-US country has first right of taxation. The US will then impose very punitive taxation, reporting and penalties because it is "foreign income and assets". #PFIC, #GILTI, #Form5471, #Form8938, #Form8621, etc. - denial of foreign tax credits ...

Clearly US @citizenshiptax allows those WITH US asset
Read 9 tweets
Nov 15, 2024
Principle 4 - understanding what the #endingdoubletaxation of #Americansabroad means:

Let's summarize "some" of the costs of the US @citizenshiptax regime to BOTH @USCitizenaboad and the countries where they live.

First, Costs of US @CitizenshipTax to #Americansabroad

- #Americansabroad are in effect subject to a separate and more punitive tax regime than Homeland Americans. On this point see:

citizenshipsolutions.ca/2019/03/12/the…
Second, the lost opportunity of not being able to participate in retirement and financial planning programs created by their country of actual residence:

citizenshipsolutions.ca/2017/08/04/the…

Third, the horrible fees to tax preparers to prepare (often incorrectly) US tax returns. It is obvious that compliance costs should be considered a separate tax on UScitizenship.
Fourth, the inability to have access to normal banking, brokerage and investment accounts. US Treasury denies this is happening. But, I have people all over the world #renounceuscitizenship in order to free them from this US @citizenshiptax imposed disability.

Fifth, who in their right mind would engage in business opportunities with a U.S. citizen partner. Would you want to have your banking info reported to the IRS
Read 7 tweets
Nov 15, 2024
Principle 3 - understanding what the #endingdoubletaxation of #Americansabroad means:

Because @doubletaxation of #Americansabroad is caused by US @citizenshiptax it is clear that ending the #doubletaxation of @USCitizenAbroad can be ended by ending #CBT - AKA separation citizenship from @taxresidency. This is the ONLY solution that solves the problems of all people, all the time and under all circumstances.

That said, other solutions have also been proposed.

These other solutions which RETAIN US #citizenshiptaxation and solve the problems of some but all include ...

-
Proposals that RETAIN US @citizenshiptax but provide relieving provisions for some of the effects of #CBT for some people but not for others. Examples include:

- the 2018 Holding Bill and the later Beyer bills which mostly exclude most non-US source income from US taxation but are aimed at limited forms of income and leave ALL reporting requirements in place (Form 5471, Form 8938, Form 3520, Form 3520A, Form 8621, FinCEN 114, etc.)

Note that although these might enddouble taxaion they are limitedin scope.
It's important to note that #endingdoubletaxation of #Americansabroad ...

- by severing US citizenship from @taxresidency ends all the compliance costs of being a @USCitizenAbroad

- by RETAINING US @citizenshiptax, but creating a "carve out" for foreign income means that the compliance cost, reporting obligations and opportunity cost (restrictions on investing/financial planning) likely continue.
Read 5 tweets

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