The lawsuit was prepared by a group called Alliance for the Defence of Canadian Sovereignty, but was filed on behalf of two Canadian women, Gwen Deegan and Virginia Hillis.
Both Ontario women were born in the US but left there aged five to live in Canada. They never obtained a US passport or developed meaningful ties with the US.
The case centres on their claim that they are considered ‘tax cheats’ by the US because they are not ‘IRS compliant’.
Their statement of claim, filed in Vancouver earlier this week, specifically argued that FATCA violates the Canadian Charter of Rights.
Canada signed a FATCA agreement with the US in February this year, which gave exemptions to its Registered Retirement Savings Plans and Tax Free Savings Accounts.
Passed in 2010 by Barack Obama, FATCA requires foreign financial institutions to identify and report the financial details of their American clients, whose tax duties still apply when they move either themselves or their money from the US.
All foreign financial institutions now have to disclose US-related information about new and existing clients to the US Internal Revenue Service (IRS), or will risk a 30% tax being imposed by US authorities on withholdable payments when the reporting stage comes about in March 2015.
When deVere chief executive Nigel Green compared FATCA to communism and said American expatriates are “furious” at being discriminated against by the US government, one of the comments on his personal website highlighted the Alliance for the Defence of Canadian Sovereignty. To read more, click here.
