Coming soon to a bank near you: FATCA
It would appear that the United States of America is going to be placing a hand and foot within our financial institutions.
Beginning next July, anyone opening a new account with a Canadian bank will be required to answer the question, “Are you now, or have you ever been, an American Person?”
The reason behind the questions is due to The Foreign Accounts Tax Compliance Act (FATCA), which was passed back in 2010 by the U.S. Congress. FATCA is designed to force other financial institutions to locate customers who have specific indicia or markers which may prove that the person is or was a former U.S. citizen who must file income tax returns no matter where they reside in the world.
Banks will be required, starting July 1, 2014 to search through their records in order to look for such indicators as place of birth, alternate addresses and phone numbers, and past residency in the United States. Meeting at least one of these criteria will mean the account is flagged under ‘U.S. Reportable Account.’
At the moment there is a great deal of concern with how this law infringes upon the Canadian Charter of Rights and Freedoms considering it breaches the privacy of its citizens.
Despite the fact that this is an American law, the financial institutions which are deputized by the IRS to find these American taxpayers will have to cover the cost themselves. It is estimated that FATCA will cost banks $100 million each to comply.
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