"For those US Taxpayers using foreign bank accounts, the noose is tightening," says Anthony Verni. Tax Attorney of Fresh Start Tax LLC
Miami, FL (PRWEB) January 22, 2013
According to Verni, On January 17, 2013 The U.S. Department of the Treasury and the Internal Revenue Service (IRS) announced the issuance of comprehensive final regulations implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA), which was enacted by Congress in 2010. These new regulations focus on rooting out non-compliance by U.S. taxpayers using foreign accounts and represent a significant step in establishing a systematic approach to combating tax evasion. For those US Taxpayer using foreign bank accounts, the noose is tightening.
These regulations provide step-by-step process for U.S. account identification, information reporting, and withholding requirements for foreign financial institutions (FFIs), other foreign entities, and U.S. withholding agents, thereby facilitating the identification of US Taxpayers, who maintain foreign accounts through international cooperation.
"These regulations give the Administration a powerful set of tools to combat offshore tax evasion effectively and efficiently," said Deputy Secretary Neal Wolin. "The final rules mark a critical milestone in international cooperation on these issues, and they provide important clarity for foreign and U.S. financial institutions."
The final regulations issued on January 17, 2013:
- Build on intergovernmental agreements that foster international cooperation.
- Phase in the timelines for due diligence, reporting and withholding and align them with the intergovernmental agreements.
- Expand and clarify the scope of payments not subject to withholding.
- Refine and clarify the treatment of investment entities. Clarify the compliance and verification obligations of FFIs.
The Treasury has collaborated with foreign governments to develop two alternative model intergovernmental agreements that facilitate the effective and efficient implementation of FATCA.
These models serve as the basis for entering into bilateral agreements with cooperating foreign countries and help implement the law in a manner that: (i) removes domestic legal impediments to compliance; (ii) secures wide-spread participation by every non-exempt financial institution in the partner jurisdiction; (iii) fulfills FATCA’s policy objectives; (iv) and further reduces burdens on FFIs located in partner jurisdictions. Seven countries have already signed or initialed these agreements.
On January 17, 2013 the Treasury announced that Norway has joined the United Kingdom, Mexico, Denmark, Ireland, Switzerland, and Spain as countries that have signed or initialed model agreements. Treasury is engaged with more than 50 countries and jurisdictions to curtail offshore tax evasion, and more signed agreements are expected to follow in the near future.
For a full text of the IRS press release, click on the link below
For further information about FBAR regulations, please contact Mr. Verni at 866-700-1040.
Fresh Start Tax is a professional tax resolution firm, A+ Rated and accredited by the Better Business Bureau. On staff are Board Certified Tax Attorneys, CPAs, and Former IRS Agents, Managers and Instructors. We have over 206 years of professional tax experience and over 60 years of direct IRS experience. To learn more about Fresh Start Tax, LLC, please visit http://freshstarttax.com or call us at (866)700-1040