FATCA, the global U.S. tax compliance law, is striking fear into the hearts of foreign institutions everywhere. According to tax lawyer Robert Wood, foreign countries may now be following the U.S. government’s aggressive tactics in pursuing tax evasion in offshore accounts. In Switzerland, for example, many banks are under investigation, and others not under scrutiny are already striking deals with the Justice Department. Beyond Switzerland, Wood explained, there are about sixty countries that have signed agreements with the U.S. to comply with our tax laws in some way. In some cases, foreign banks will supply information to their own governments; the information will then be passed on to the IRS.
Wood also noted that the U.S. now has an agreement with the Cayman Islands. Though most agreements are prospective in nature, there is potential danger ahead for those who have offshore accounts. “It’s surprising to me,” Wood remarked, “how many people are suddenly waking up to this issue.”
Mr. Wood’s article "Offshore Accounts Can Mean Jail, And Not Just In U.S." discusses the issues at greater length.
For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.