Foreign Account Tax Compliance Act

Nine Swiss AEOI Agreements in Force Since January 1 2017 | FATCA Lawyer

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Switzerland has recently become one of the most active countries with respect to expanding its network of automatic exchange of information agreements (Swiss AEOI Agreements). In fact, since January 1, 2017, nine Swiss AEOI Agreements entered into force.

Nine Swiss AEOI Agreements

All of the Swiss AEOI Agreements were signed via exchange of notes in late 2016 and entered into force from January 1, 2017. All of the Swiss AEOI Agreements were signed based on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Protocol 10) in accordance with OECD CRS (common reporting standard). OECD CRS is the OECD version of FATCA.

Let’s list out the countries with which Swiss AEOI Agreements were signed in late 2016. They can be divided into two groups: the October Group and the December group.

The October Group includes Guernsey, Iceland, Isle of Man, Jersey, Norway and South Korea. All of the agreements were signed via an exchange of notes dated October 26, 2016 and October 28 (Iceland), November 1 (Jersey), November 10 (Guernsey), November 16 (South Korea), December 5 (Isle of Man) and December 13 (Norway).

The December Group includes Japan-Switzerland agreement signed via exchange of notes on December 8, 2016; Australia-Switzerland agreement that was signed via an exchange of notes dated December 8, 2016, and December 14, 2016; and Canada-Switzerland AEOI that was signed via an exchange of notes dated December 9, 2016, and December 22, 2016.

Indirect Impact of Swiss AEOI Agreements on US Taxpayers

This expansion of the information exchange network through Swiss AEOI Agreements poses an additional danger of the IRS detection of tax noncompliance by US taxpayers.

Why? The answer is simple – each of the countries that signed Swiss AEOI Agreements must also comply with its FATCA obligations with respect to US taxpayers. As the information exchange traffic increases through Swiss AEOI Agreements, there is a higher probability that FATCA-related information may be accidentally uncovered and transmitted to one of the Parties to the Swiss AEOI Agreements. Then, this Party may turn over this information to the IRS through FATCA reporting or an automatic exchange of information agreement with the IRS (present or future).

Therefore, US taxpayers with undisclosed foreign accounts in Australia, Canada, Guernsey, Iceland, the Isle of Man, Japan, Jersey, Norway, South Korea and Switzerland are at an increased risk of the IRS detection and should immediately consult with an experienced international tax law firm with respect to their voluntary disclosure options.

Contact Sherayzen Law Office for Professional Help With Offshore Voluntary Disclosures Concerning Foreign Assets and Foreign Income

If you have undisclosed foreign assets or foreign income, you should contact Sherayzen Law Office as soon as possible. Sherayzen Law Office is a highly experienced international tax law firm that has helped hundreds of US taxpayers around the world to bring their tax affairs into full compliance with US tax laws, while reducing their noncompliance penalties and even lowering their tax liabilities (by utilizing missed opportunities for tax optimization in the years covered by voluntary disclosure). We can help You!

Contact Us Today to Schedule Your Confidential Consultation!

Argentinian Tax Information Exchange Agreement Signed | FATCA Lawyer

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On December 23, 2016, Argentina and the United States signed a Tax Informational Exchange Agreement (“Argentinian Tax Information Exchange Agreement” or “Argentinian TIEA”) in Buenos Aires. Let’s explore the main points of the Argentinian Tax Information Exchange Agreement.

Argentinian Tax Information Exchange Agreement: Information to Be Exchanged

The information to be exchanged under the Argentinian Tax Information Exchange Agreement is described in its very first article. Article 1 states that the parties will provide information to each other that is “foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by this Agreement”.

Article 1 then specifies that such information includes everything “foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters”.

Argentinian Tax Information Exchange Agreement: Taxes

What are these “taxes” mentioned in Article 1? Article 3 of the Argentinian TIEA explains that the focus is on information related to US federal taxes and all national taxes administered by the Federal Administration of Public Revenue. Obviously, the Argentinian TIEA will apply to any identical or substantially similar taxes that are imposed after the Agreement is signed in addition to, or in place of, the existing taxes. Both parties, Argentina and the United States, agreed to notify each other of any significant changes that have been made in their taxation laws or other laws that relate to the application of the Argentinian TIEA.

Argentinian Tax Information Exchange Agreement: Automatic Exchange, Spontaneous Exchange and Exchange Upon Request

The Argentinian Tax Information Exchange Agreement prescribes three modes of exchange of information. First, Article 6 of the Argentinian TIEA provides for automatic exchange of certain information.

Second, Article 7 allows Argentina and the United States to spontaneously transmit to each other’s respective tax authorities any relevant information that has come to the attention of the either Party’s tax authorities. For example, if Argentinian tax authorities obtain information that points to US tax noncompliance of a dual citizen of Argentina and the United States, Argentina can provide this information to the IRS.

Finally, Article 5 allows Argentina and the United States to request relevant information from each other. There is an interesting clause in Article 5 that removes potential limitations on the exchange of information upon request: “such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or whether the conduct being investigated would constitute a crime under the laws of the requested Party if such conduct occurred in the requested Party.”

Article 5 of the Argentinian Tax Information Exchange Agreement is remarkable in another aspect. It states that, if the information possessed by the “requested Party (i.e. the country that received the request from another country) is insufficient to enable it to comply with the request for information, the requested Party needs to engage in information gathering measures in order to provide the other Party will the requested information. The requested Party needs to do these investigations even if it does not regularly collect this information or need it.

Under Article 5(3), the requested Party, if specially requested so by the applicant Party, has to provide the information in the form of depositions of witnesses and authenticated copies of original records.

Argentinian Tax Information Exchange Agreement: Foreign Bank and Beneficial Ownership Information in Focus

Article 5(4) also clarifies what is at the heart of the exchange of information upon request. First, information “held by banks, other financial institutions, and any person acting in an agency or fiduciary capacity including nominees and trustees.”

Second, the beneficial ownership information of “companies, partnerships, trusts, foundations, “Anstalten” and other persons”. This information should also include all persons in the ownership chain. In the case of trust, “information on settlors, trustees and beneficiaries”. In the case of foundations, “information on founders, members of the foundation council and beneficiaries”. Publicly-traded companies and public collective investment funds are excluded (unless the information can be obtained without giving rise to “disproportionate difficulties” to the requested Party).

Argentinian Tax Information Exchange Agreement: Tax Examinations Abroad

Article 8 of the Argentinian Tax Information Exchange Agreement grants each Party the right to conduct tax examinations abroad. Obviously, the written consent of the persons to be interviewed has to be secured first. However, once both Parties agree to the examination, “all decisions with respect to the conduct of the tax examination shall be made by the Party conducting the examination.”

Argentinian Tax Information Exchange Agreement: Entry Into Force

According to Article 14, the Argentinian Tax Information Exchange Agreement shall enter into force “one month from the date of receipt of Argentina’s written notification to the United States that Argentina has completed its necessary internal procedures for entry into force of this Agreement.”

Once the Argentinian TIEA is in force, its provisions will apply for requests “made on or after the date of entry into force, concerning information for taxes relating to taxable periods beginning on or after January 1 of the calendar year next following the year in which this Agreement enters into force or, where there is no taxable period, for all charges to tax arising on or after January 1 of the calendar year next following the year in which this Agreement enters into force.”

Argentinian Tax Information Exchange Agreement: Impact on US Taxpayers

The Argentinian Tax Information Exchange Agreement will have a profound impact on US taxpayers with undisclosed Argentinian income and Argentinian assets. First, the combination of three different disclosure modes – automatic, spontaneous and upon request – greatly increases the risk of the IRS detection of undisclosed Argentinian assets and unreported Argentinian income. The spontaneous exchange of information may be especially dangerous because it increases the probability of indirect (and unpredictable) detection. For example, if information about US tax noncompliance is obtain through an audit of an Argentinian tax return, such information may be turned over to the IRS.

Second, the Argentinian Tax Information Exchange Agreement allows the IRS to obtain witness depositions and other evidence against noncompliant US taxpayers at a relatively low cost. Furthermore, the Argentinian TIEA grants the IRS the ability to conduct examinations in Argentina, greatly enhancing the IRS reach in that country. In other words, the chances of successful imposition of civil penalties and even criminal prosecution by the IRS of noncompliant US taxpayers is substantially increased by the Argentinian TIEA.

Contact Sherayzen Law Office if You Have Undisclosed Foreign Assets and Foreign Income in Argentina

If you have undisclosed Argentinian assets and income, contact Sherayzen Law Office as soon as possible. Once the IRS detects your noncompliance or even just commences an investigation to verify whether you were not tax compliant, then you may lose all of your voluntary disclosure options.

Sherayzen Law Office is an international tax law firm that specializes in offshore voluntary disclosures of undisclosed foreign assets and foreign income. We have helped hundreds of US taxpayers to bring their US tax affairs into full compliance with US tax laws while reducing their penalties and, in many cases, even their tax liabilities. We Can Help You!

Contact Us Today to Schedule Your Confidential Consultation!

Israeli-Swiss AEOI Declaration Signed | FATCA Lawyer New York

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On November 27, 2016, Israel and Switzerland signed a joint declaration committing to implement the automatic exchange of financial account information (AEOI). The joint declaration (the Israeli-Swiss AEOI Declaration) was signed by Moshe Asher, director of the Israel Tax Authority, and Joerg Gasser, Swiss state secretary for international financial matters, on behalf of their respective governments.

Israeli-Swiss AEOI Declaration Will Follow CRS

The Israeli-Swiss AEOI Declaration states that AEOI will be based on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters of 25 January 1988, as amended by the Protocol of 27 May 2010, and subject to the signing of the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). The information subject to exchange will be collected according to the Common Reporting Standard (CRS) adopted by OECD.

The MCAA is based on the international standard for the exchange of information developed by the OECD. The OECD first introduced the standard in February of 2014; the standard was later approved in November of 2015 by the G-20 leaders during their summit in Brisbane, Australia.

Israeli-Swiss AEOI Declaration Sets Forth the Implementation Time Frame

The Israeli and Swiss governments committed to start collecting the CRS-required data in 2018. The actual transmission of data will commence in 2019 and continue onwards.

Israeli-Swiss AEOI Declaration Foresees Voluntary Disclosure Coordination

The Israeli-Swiss AEOI Declaration commits both countries to inform each other about their respective voluntary disclosure programs (i.e. the voluntary disclosures by their citizens of their financial assets). The stated aim is to provide a smooth transition to the AEOI.

Implications of Israeli-Swiss AEOI Declaration for US Taxpayers

The signing of the Israeli-Swiss AEOI Declaration further increases the already high probability of the IRS detection of noncompliant US taxpayers with undisclosed offshore assets in these countries. As financial institutions review their client data, there is an increased probability that they may encounter that some of their taxpayers are US taxpayers whose information needs to be reported to the IRS under FATCA.

Furthermore, under the Israeli-Swiss AEOI Declaration, both countries agree to cooperate with respect to their voluntary disclosure programs. Under these circumstances, it is possible that more information than usual will be revealed during these voluntary disclosures and exchanged between the countries; some of that information may be disclosed to the IRS.

Contact Sherayzen Law Office for Help With the IRS Voluntary Disclosure of Your Undisclosed Foreign Assets and Foreign Income

If you are a US tax resident with undisclosed assets in Israel and/or Switzerland, contact Sherayzen Law Office for help with your IRS voluntary disclosure of these assets as soon as possible. In today’s FATCA-dominated world, the probability that the information regarding your undisclosed assets will be detected by the IRS has increased exponentially. The additional information exchange agreements, such as the recent Israeli-Swiss AEOI Declaration, only make this probability higher. At this point, a US tax resident with undisclosed assets in Israel and Switzerland is running an unacceptably high risk of IRS detection that may result in the imposition of high IRS penalties, including criminal penalties.

Sherayzen Law Office is a leading international tax firm in the area of IRS voluntary disclosure of offshore assets and income. We have helped hundreds of US taxpayers with assets around the globe to bring their tax affairs into full compliance with US tax laws, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Swiss-Indian AEOI Declaration Signed | FATCA Lawyer New York

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On November 22, 2016, Switzerland and India signed a joint declaration on the introduction of the automatic exchange of information (AEOI) in tax matters on a reciprocal basis. The joint declaration (Swiss-Indian AEOI Declaration) was signed by Sushil Chandra, chair of India’s Central Board of Direct Taxes, and Gilles Roduit, deputy chief of mission of the Swiss Embassy in India.

Swiss-Indian AEOI Declaration Will Follow CRS

The Swiss-Indian AEOI Declaration foresees that AEOI will be based on the Common Reporting Standard (CRS) adopted by OECD. From the Swiss legal perspective, the AEOI with India will be based on the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). The MCAA is based on the international standard for the exchange of information developed by the OECD. The OECD introduced the standard in February of 2014; the G-20 leaders approved it in November of 2015 during the G-20 summit in Brisbane, Australia.

Implementation Time Frame for Swiss-Indian AEOI Declaration

Both governments committed to start collecting the CRS-required data in 2018. The actual exchange of the CRS data will commence in 2019 and continue onwards. Both governments must notify each other of relevant developments regarding the implementation of the CRS in their domestic legislation.

Implications of Swiss-Indian AEOI Declaration for US Taxpayers

The Swiss-Indian AEOI Declaration increases the probability of the IRS being able to obtain FATCA data from both countries regarding noncompliant US taxpayers with assets in Switzerland and/or India. The reason is simple: as financial institutions comb through their client data, there is an increased probability that they may encounter that some of their taxpayers are US taxpayers whose information needs to be reported to the IRS under FATCA.

Moreover, under the Swiss-Indian AEOI Declaration, both countries anticipate that their taxpayers will participate in a local voluntary disclosure program as part of the transaction to the AEOI system. Both countries must notify each other about these programs and it is possible that more information than usual will be revealed during these voluntary disclosures. Hence, the local Swiss and Indian voluntary disclosure programs further increase the probability that the IRS may find out about the assets of noncompliant US taxpayers.

Contact Sherayzen Law Office for Help With the IRS Voluntary Disclosure of Your Unreported Foreign Assets and Foreign Income

If you are a US tax resident with undisclosed assets in India and/or Switzerland, you should contact Sherayzen Law Office for professional help with your IRS voluntary disclosure of these assets as soon as possible. In today’s world, the probability that the information regarding your undisclosed assets will be detected by the IRS has increased exponentially as the recent Swiss-Indian AEOI Declaration demonstrates. Combined with FATCA, you are running an unacceptable risk of IRS detection that may result in the imposition of draconian IRS penalties, including criminal penalties.

Over the past more than 10 years, Sherayzen Law Office has helped hundreds of US taxpayers with assets around the globe to bring their tax affairs into full compliance with US tax laws, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Ukrainian FATCA Agreement Authorized for Signature

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On November 9, 2016, the Ukrainian government authorized the Ukrainian FATCA Agreement for signature. Let’s explore this new development in more depth.

Ukrainian FATCA Agreement and FATCA Background

The Ukrainian FATCA Agreement is one of the many bilateral FATCA implementation agreements signed by the great majority of jurisdictions around the world. The Foreign Account Tax Compliance Act (FATCA) was enacted into law in 2010 and quickly became the new standard for international tax information exchange.

FATCA is extremely complex, but its core purpose is very clear – increased US international tax compliance (with higher revenue collection) by imposing new reporting requirements on US taxpayers and especially foreign financial institutions (FFIs). Since FFIs are not US taxpayers, the United States has been working with foreign governments to enforce FATCA through negotiation and implementation of FATCA treaties. The Ukrainian FATCA Agreement is just one more example of these bilateral treaties.

Ukrainian FATCA Agreement is a Model 1 FATCA Agreement

There are two types of FATCA treaties – Model 1 and Model 2. Model 2 FATCA treaty requires FFIs to individually enter into a FFI Agreement with the IRS to report the required FATCA information directly to the IRS (for example, Switzerland signed a Model 2 treaty).

On the other hand, Model 1 treaty requires FFIs in the “partner country” (i.e. the country that signed a Model 1 FATCA agreement) to report the required FATCA information regarding US accounts to the local tax authorities. Then, the tax authorities of the partner country share this information with the IRS.

The Ukrainian FATCA Agreement is a Model 1 FATCA Agreement.

When will the Ukrainian FATCA Agreement Enter into Force?

The Ukrainian FATCA Agreement will enter into force once Ukraine notifies the US government that it has completed all of the necessary internal procedures for the ratification of the Agreement.

What is the Impact of Ukranian FATCA Agreement on Noncompliant US Taxpayers?

The implementation of the Ukrainian FATCA Agreement will mean that the Ukrainian government will force its FFIs to identify all of the FATCA information regarding their US accountholders and share this information with US government.

This further means that any US taxpayers who are currently noncompliant with the US tax reporting requirements (such as FBAR, Form 8938, foreign income reporting, et cetera) are now at an ever increasing risk of detection by the IRS and the imposition of draconian IRS penalties.

Contact Sherayzen Law Office for Help With US Tax Compliance in light of the Ukrainian FATCA Agreement

If you have undisclosed Ukrainian assets (including Ukrainian bank accounts) and Ukrainian foreign income, contact Sherayzen Law Office for help as soon as possible. We have helped hundreds of US taxpayers around the globe (including Ukrainians) to bring their US tax affairs in order and we can help you!