As the 2014 FATCA deadline of the 2010 Foreign Account Tax Compliance Act approaches, a bevy of foreign financial institutions are disclosing the names of their U.S. account holders to the IRS. The implementation of FATCA is being widely supported by foreign governments, providing the IRS with new power and leverage. FATCA was designed to help close the tax gap by uncovering the billions of dollars hidden in undisclosed foreign accounts. The US expects to raise $7.6 billion in tax revenue over 40 years following FATCA implementation. Beginning as early as June 2014, if foreign financial institutions want to remain in the good graces of the United States, they need to disclose the account holder information requested by the IRS.
If you have foreign accounts that remain undisclosed, you might believe there is no way that foreign governments or international financial institutions will follow through with the FATCA demands. In truth, LSL CPAs has seen the opposite. Traditional tax-haven countries like Costa Rica, the Cayman Islands and Argentina are cooperating with the United States. Such cooperative efforts are only the beginning as a number of countries across the globe agree to take part in the program.
2014 FATCA Deadline Approaching
A perfect example occurred on August 29, 2013, when the U.S. Department of Justice announced a joint program with Switzerland, arguably the most famous of all the international account havens. The U.S. Department of Justice and the Swiss Federal Department of Finance released a joint statement on August 29, 2013 about the program. In the joint statement, it was made clear that Switzerland will strongly encourage Swiss banks and financial institutions to cooperate with the 2014 FATCA Deadline.
Every indicator is pointing towards the obvious, the implementation of the law with the 2014 FATCA deadline will result in a majority of foreign financial institutions disclosing their U.S. account holders. The Treasury Department has revealed a strong determination to uncover, tax, penalize and prosecute Americans with undisclosed foreign accounts. As a result, the time to come forward is now, and the international tax team at LSL CPAs can help you make this challenging transition. Doesn’t it make sense to voluntarily disclose your foreign accounts as opposed to having them uncovered and then being forced to face huge financial penalties and legal repercussions?
This content contains accurate information. It is inherently limited, however, on account of the length of the article and the complexity of the FATCA issues being discussed. In addition, pursuant to U.S. Treasury Department Regulations, any federal tax advice in this article is not intended or written to be used for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.
It is important to further note that this article presents only a partial view of the subject matter. It does not claim or attempt to be comprehensive or perfectly accurate. To learn more about how the implementation of the FATCA regulations might apply to your particular financial situation, please call LSL CPAs international tax accountant Yana Weaver at 714.569.1000.
