With 2014 just days away, the U.S. Treasury Department is working overtime to sign up more countries for its anti tax evasion program targeting unreported foreign bank accounts. Within the last week, Treasury officials inked deals with the Netherlands, Bermuda, Malta, Jersey, Guernsey and the Isle of Man. The latter three are semi autonomous United Kingdom Crown dependencies.
The Foreign Account Tax Compliance Act – FATCA – will soon require foreign banks to cull through their account records and identify and report accounts owned by U.S. taxpayers. Accounts in which Americans have signature authority will also be flagged.
The purpose of FATCA is to identify the millions of Americans with unreported offshore accounts. The law isn’t limited to bank accounts; brokerage accounts, certain annuities, precious metal accounts and even some foreign life insurance policies are affected.
We have found that most people with unreported accounts are not tax evaders. Instead they are dual nationals, foreign born Americans and expats who retired overseas. Unfortunately most will be picked up when FATCA fully kicks in later in 2014. Although having a foreign account is completely legal, not reporting that account to the IRS carries huge civil penalties. (Willful violations could even lead to prison.)
The 6 countries that recently signed have all been previously considered “tax havens” meaning they were popular spots for Americans seeking to hide money. Even the Netherlands has been considered by some as a tax haven, although more so for corporations and not individuals.
Once again, the IRS’ press room was busy getting the word out. A spokesperson for the Treasury Departments said of the new agreements, “This large number of signings in one week alone sends a strong signal to tax evaders everywhere: International support for FATCA is growing.”
With the six new agreements, the IRS has 18 signed and several dozen more under negotiation.
If you have an unreported foreign bank or financial account, time is running out. With FATCA just months away, coming into compliance before getting caught is critical. We can help explain your rights and responsibilities under the new FATCA law and help you avoid the serious penalties associated with FBAR violations (FBAR is the Report of Foreign Bank and Financial Accounts). We also help foreign banks, credit unions, brokerage firms and other financial institutions with FATCA compliance issues.
Have questions about FATCA, FBARs and foreign reporting issues? Give us a call. Let an experienced FBAR attorney give you the peace of mind you need. Most services can be provided for a reasonable flat fee.
Taxpayers with questions should contact attorney Bethany Canfield at or by telephone at (414) 223-0464. Institutional clients should contact the author, Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept in strict confidence. IRS tax services available worldwide.
Need more information? Our Due Diligence blog has hundreds of articles on FATCA and FBARs.
Post by Brian Mahany, Esq.
Tagged as: FATCA – FBAR lawyers – FATCA attorneys – Offshore Voluntary Disclosure Program – IRS attorneys