A lawsuit was filed in Federal Court in Vancouver, British Columbia, challenging Canada’s complying with the US Foreign Account Tax Compliance Act (FATCA). This is the law that spawned Form 8938 (the “Son of FBAR”). This law, passed in 2010, mandates that account information on Americans be shared with the IRS from foreign bank accounts or there will be mandatory 30% withholding on any US payments to those accounts.
The lawsuit alleges that disclosing information on Canadian account holder is a violation of privacy and property rights of the account holders in violation of the Canadian constitution.
I have no idea how slow the Canadian tax system works, but I suspect this lawsuit will take years to work its way through the court system.
