This week the National Post published an article about the possible effects (suggesting it could be damaging to Canadians) of the ADCS-ADSC.ca FATCA lawsuit. The article is a report on an interview that the author had with Calgary based U.S. tax laywer Roy Berg.
The above tweet references an article, published by Moody’s in which there is a suggestion that by participating in this lawsuit, that the plaintiffs would incur further tax liability to the IRS. The article states:
As an aside, we acknowledge that the two Canadian plaintiffs are exposing themselves to tremendous tax and other legal risks. Sticking to what we know, the plaintiffs seem to have admitted that they willfully did not file FBARs and US tax returns, both of which are criminal acts. In addition, there might be US tax exposure to them personally because a Canadian non-profit organization is raising funds and paying their legal fees to fund the litigation. Even the most casual observer has to applaud the bravery of the plaintiffs and the not-so-subtle parallel to original signatories to the Declaration of Independence.
Since this “aside” is irrelevant to the issue, we can assume that this is an attempt by Moody’s to somehow intimidate the plaintiffs. (Or at least that’s how I view it.). The simple reality is that the compliance industry is the sole beneficiary of FATCA.
But, that “aside” aside, the article generated a number of interesting comments. I suggest that the following stream of comments do a good job of framing the issues in the context of a broader FATCA debate.