Global FATCA Push by IRS
The IRS had made a worldwide push to get information about offshore accounts over $50,000 of American taxpayers, using the Foreign Account Tax Compliance Act, or FATCA. Commentator Rob Wood discusses the new effort in his Forbes article, “IRS Nets Offshore Data From 77,000 Banks, 70 Countries In FATCA Push.”
Wood underscores the point that U.S. citizens abroad or noncitizens who are permanent residents in the USA have to report income on their returns whether or not a foreign bank provides a 1099. The FATCA law went into effect in in 2010. Because of delays in implementing the law, it doesn’t really begin to take effect until July 1, 2014. That’s when the obligations will affect foreign banks. Because banks will start disclosing the existence of these accounts, American taxpayers need to report these accounts on all their tax forms, but also on ancillary forms, including FBAR, the foreign bank account reporting form.
Other countries are beginning to follow the lead of the U.S. Wood notes that, every time he writes something about FATCA, it causes some high emotions on both sides of the issue. There are repeal efforts being mounted; at the same time, some other countries are adopting the FATCA approach. The IRS’s enforcement approach was discussed in Wood’s report on the Credit Suisse guilty plea.
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.