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IRS Finalizes FATCA Rules, Signs Model Agreement with Norway
By Colby Adams and Brian Monroe
printThe U.S. Treasury Department Thursday finalized rules for a controversial law intended to pressure foreign banks to name their American clients, and disclosed a related bilateral agreement with Norway. The final Foreign Account Tax Compliance Act (FATCA) regulations require participating, non-U.S. banks to annually report information on their American clients, including names, addresses, taxpayer identification numbers and account numbers and balances. When local law prevents such data-sharing and clients refuse to cooperate, the institutions must close the accounts or pay a 30 percent withholding tax. On a conference call Thursday afternoon, an IRS official characterized the 543-page regulation as relatively...
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The price tag financial institutions will face implementing a newly-endorsed intergovernmental plan to fight tax evasion will be high despite their recent investments to comply with similar American demands.
U.S. financial institutions Tuesday began withholding up to 30 percent from payments sent to foreign banks that have not agreed to turn over information on their wealthy American accountholders.
The regulatory burden of financial institutions complying with a U.S. tax law and related intergovernmental initiatives could largely depend on seemingly small details in know-your-customer profiles, compliance specialists said Thursday.
Credit Suisse is unlikely to turn over the names of some suspected tax cheats even if the United States adopts a pending bilateral tax agreement with Switzerland, bank representatives told lawmakers Wednesday.
The U.S. Treasury Department Thursday clarified and, in some cases, scaled back compliance duties under a law expected to require hundreds of foreign financial institutions to report on their American clients.
An IRS initiative granting state and municipal investigators access to a federal database of bank regulatory filings has helped law enforcement agencies reap hundreds of millions of dollars in forfeitures.
Financial trade groups are asking the U.S. Treasury Department for more time to comply with intergovernmental agreements intended to shine a light on bank accounts held by American tax dodgers.
The U.S. Treasury Department published a preview of upcoming guidance Tuesday for financial institutions that have agreed to report to the Internal Revenue Service on their American clients.
Foreign banks are delaying overhauls to their IT systems and customer onboarding procedures made necessary by a U.S. tax law until their home governments conclude client data-sharing agreements with the United States, according to U.S. officials.
With an American anti-tax evasion law set to take effect and plans for another European Union directive to fight money laundering, French banks will soon have to know their clients better, according to Carolina Ceballos, a professor at the University of Strasbourg.
A U.S. plan for greater financial transparency is unlikely to bypass opposition from the head of a senate panel who is opposed to requiring companies to identify their real owners.
A plan to require member-states of the European Union to automatically exchange tax-related data in an effort to boost government revenues is likely to face political and logistical challenges.
A "quantum leap" in efforts to improve global financial transparency, including the passage of a U.S. anti-tax evasion law, has mitigated the compliance risks of offshore banking centers in recent years, says Martin Livingston, a partner at the Cayman Islands branch of law firm Maples and Calder.
Banks in Switzerland will be the first to disclose their American accountholders directly to U.S. officials rather than their government under the terms of a bilateral tax cooperation agreement.
The U.S. Treasury Department will publish final rules this week on an anti-tax evasion law intended to compel foreign banks to disclose data on their high-value American clients, say sources.
Financial institutions concerned about a looming Foreign Account Tax Compliance Act implementation date can breathe easier, at least for another year, under a new U.S. Treasury Department timetable.
A plan by the United Kingdom's Parliament to make it obligatory for non-U.K. financial institutions to disclose data about their British clients is likely to face stiff resistance from the banking sector, say sources.
The U.S. Treasury Department disclosed model plans Thursday that will allow five nations to comply with American tax data-sharing requirements set to take effect early next year.
The United States disclosed a plan Thursday that would allow Switzerland and Japan to comply with a controversial U.S. anti-tax evasion law despite bank secrecy controls in the countries.