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.
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.
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 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.
Set to take effect in a little more than a year, a U.S. plan to shine a light on American tax evaders holding accounts abroad is spurring detractors and imitators alike.
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.