by Brian Mahany
Whether you agree with the new Foreign Account Tax Compliance Act (called FATCA) or not, it appears likely to stay. At least for the immediate future. While most financial services firms are gearing up for the new law, some naysayers still believe it is the end of the world. It’s no surprise that expat and privacy groups hate the new law. We were surprised, however, when we read on iExpats.com that Price Waterhouse believes that the new law will drive some wealth managers out of business.
According to the story on iExpat, PriceWaterhouse Coopers tax partner Teresa Owusu-Adjei was quoted as saying that “Many advisers don’t know this deluge will hit them and are ill-prepared.The advice business is clearly already under a lot of strain and cost; it could smaller advisers out of business.” PwC says that the cost of compliance could be $218 USD per investor.
New laws always bring uncertainty but already vendors are lining up to fill the information gap. One company, Finomial, is close to having software approved by the IRS. Once an automated solution exists, compliance costs should be greatly reduced.
Perhaps the bigger problem is finding lawyers and CPAs who understand the new law. We have seen some “silk stocking” firms billing tens of thousands of dollars to clients so the firm can learn the law. In the next few months we believe more information will be available for fund managers, banks and other financial businesses.
If you have questions about FATCA compliance and implementation, give us a call. As the legal services provider to CPAmerica for foreign tax reporting issues, we understand FATCA and offshore reporting requirements. We can quickly answer your questions and help you and your accounting / compliance staff understand your responsibilities under the new law. We can also help your clients with their FATCA and FBAR reporting requirements including amnesty if they have past compliance issues.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California (coming soon). IRS tax services available worldwide.