Archives: FATCA

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IRS and DOJ Use a New Method to Defeat Taxpayers’ Fifth Amendment Argument Against Turning Over Foreign Account Records

At virtually every turn, courts have ruled against taxpayers who have asserted their Fifth Amendment privilege against self-incrimination to avoid turning over foreign account records to the government, citing the “Required Records Doctrine.” In a recent enforcement action in the U.S. District Court for the District of Oregon, the taxpayers tacked differently. In Cheri LaRue … Continue Reading

Taxpayer Advocate Recommends Ways for IRS to Simplify Foreign Asset Reporting

The National Taxpayer Advocate made three specific recommendations to the IRS to try to simplify the process for reporting foreign assets. For several years the National Taxpayer Advocate has complained that the disclosure requirements for FBAR (Report of Foreign Bank and Financial Accounts) and Form 8938 (Statement of Specified Foreign Financial Assets) are duplicative and excessive. Moreover, citing … Continue Reading

Singapore Signs FATCA IGA

On December 9, 2014, Singapore’s Inland Revenue Authority announced that Singapore and the United States had on that day entered into a Model 1 FATCA IGA.  This means that Singaporean financial institutions will report information on certain U.S. accounts to the Inland Revenue Authority, which will then send the information to the IRS. The text … Continue Reading

Treasury Announces Relief for Countries with In-Substance FATCA IGAs

On December 1, 2014, the U.S. Treasury Department announced that countries that have reached FATCA inter-governmental agreements (IGAs) in substance but have not signed the agreements by the December 31 deadline will, under some conditions, still be treated as having intergovernmental agreements in effect. Treasury said that to be treated this way, the jurisdictions must … Continue Reading

Hong Kong Signs FATCA IGA

On November 13, 2014, Hong Kong announced that it had signed a Model 2 FATCA IGA.  Under the agreement Hong Kong financial institutions will enter into separate FFI agreements with the IRS and will report information on U.S. account holders directly to the IRS.  Hong Kong indicated its intention to sign a Model 2 IGA … Continue Reading

Brazil Signs Reciprocal Model 1 FATCA IGA

On September 23, 2014, Brazil signed a FATCA IGA. The agreement is a Model 1 agreement, meaning that Brazilian financial institutions will report information about U.S. customers’ accounts to the Secretariat of the Federal Revenue of Brazil, which will then send that information to the IRS.  The agreement is reciprocal, meaning that the IRS will … Continue Reading

Treasury’s FinCEN Proposes Rules Forcing U.S. Financial Institutions to Collect Data for FATCA Reciprocity

On July 30, 2014, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) proposed rules requiring U.S. financial institutions to collect “Customer Due Diligence” information, including identifying the true beneficial owners of accounts.  The Treasury’s announcement can be located here.  One of the primary uses of the information will be to comply with the U.S. government’s obligations to … Continue Reading

Singapore Agrees in Substance to FATCA IGA

On May 6, 2014, the Ministry of Finance of Singapore announced that Singapore had agreed in substance on a Model 1 FATCA IGA.  Under the  IGA, Singapore-based financial institutions will report information on financial accounts held by U.S. persons to the Inland Revenue Authority of Singapore (IRAS), which will in turn provide the information to … Continue Reading

India Agrees “In Substance” to Model 1 FATCA IGA

The U.S. Treasury announced that on April 11, 2014, India agreed “in substance” to sign a Model 1 FATCA IGA with the US. The IGA would therefore require Indian financial institutions to report information on U.S. account holders to India’s Central Board of Direct Taxes, which would then share the information with the IRS.  There is … Continue Reading

U.S. Signs FATCA IGA with Luxembourg

On March 28, 2014, the U.S. signed a FATCA IGA with Luxembourg.  Under the IGA, banks and other financial institutions in Luxembourg will report information about eligible U.S. customers’ offshore accounts to the Luxembourg tax authorities, who will then send that information to the IRS. The IGA is reciprocal, requiring the IRS to send Luxembourg … Continue Reading

U.S. Signs Four More FATCA IGA’s

On February 5, 2014, the Treasury Department announced that it had recently concluded FATCA IGA’s with Canada, Hungary, Italy, and Mauritius.  All four agreements were reciprocal Model 1 agreements.  In other words, FFI’s in those countries will report information on U.S. account holders to their own governments for transfer to the IRS.  The IRS will … Continue Reading

Cayman Islands and U.S. Sign FATCA IGA

On November 29, 2013, the Cayman Islands and the U.S. Signed a FATCA IGA.  The Cayman Islands IGA is a Model 1B agreement, meaning that FFIs in the Cayman Islands will be required to report tax information about U.S. account holders directly to the Cayman Islands Tax Information Authority.  The Cayman Islands Tax Information Authority … Continue Reading

U.S. Signs FATCA IGA With France

Bloomberg BNA reports that the Treasury Department announced on November 14, 2013, that the U.S. and France have signed a Model 1 FATCA IGA.  In other words, the IGA will require banks in France to report tax information about U.S. account holders to the French government instead of to the IRS.  The French government will … Continue Reading

Taxpayer Advocate Continues to Criticize Offshore Voluntary Disclosure Programs

In an update to her December 2012 report, the Taxpayer Advocate has noted that the IRS still has not provided reasonable options for “benign actors”, or taxpayers who inadvertently violated the rules for reporting foreign accounts.  The Taxpayer Advocate noted that the IRS revocation of pre-clearance letters had damaged IRS credibility and might lead to … Continue Reading

IRS Releases New Timeline for FATCA Implementation

The IRS released Announcement 2012-42 today, delaying the deadlines for certain steps in FATCA implementation, and better aligning the deadlines in regulations with those under the model intergovernmental agreements.  Announcement 2012-42 was issued in response to numerous comments received from financial institutions, trade associations, and foreign governments regarding the proposed regulations for implementing FATCA (see … Continue Reading

IRS Issues Updated Guidance for 2012 Offshore Voluntary Disclosure Program

On June 26, 2012, the Internal Revenue Service (“IRS”) released new FAQ’s on the current Offshore Voluntary Disclosure Program (“OVDP”) . The IRS opened the current OVDP on January 9, 2012, but, other than announcing the new FBAR penalty of 27.5%, had not issued updated guidance, leaving practitioners and taxpayers to rely on the 2011 … Continue Reading

U.S. Treasury Releases Joint Statements with Switzerland and Japan Announcing Intent to Cooperate on FATCA Enforcement

The U.S. Treasury released joint statements with Switzerland and Japan announcing their “mutual intent to pursue a framework for intergovernmental cooperation to facilitate the implementation of the Foreign Account Tax Compliance Act (FATCA).”  The Treasury has already released similar joint statements with France, Germany, Italy, Spain and the United Kingdom. The Treasury pointed out that … Continue Reading