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

May 17
From @HelenBurggraf - taken to it's conclusion means that US citizens should renounce in order to avail themselves of the benefits of being a #nonresidentalien which include parking money in the USA away from the prying eyes of the rest of #CRS world. americanexpatfinance.com/news/item/971-…
Q. How can nonresident aliens (not US citizens or residents) use the USA as a privacy jurisdiction? Why does @TaxHavenUSA exist? A. Because, as noted by @TaxJusticNet, the USA as refused to join the Common Reporting Standard which requires reciprocal exchange of information.
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May 5
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