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…
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