On February 14, 2013, the U.S. Department of the Treasury announced that it has signed a bilateral agreement with Switzerland to implement the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA).
Enacted by Congress in 2010, FATCA targets non-compliance by U.S. taxpayers using foreign accounts. The bilateral agreement signed today is the first based on the model published in November of 2012 – the second of two model agreements – and marks another important step in establishing a common approach to combating tax evasion.
Switzerland is one of eight countries that have already signed or initialed an intergovernmental agreement (IGA) which helps to facilitate the effective and efficient implementation of FATCA. In addition to the previously announced countries, Treasury initialed an IGA with Italy on January 24. 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.
The IRS was very pleased: “today’s announcement marks a significant step forward in our efforts to work collaboratively to combat offshore tax evasion,” said Acting Secretary of the Treasury Neal S. Wolin. “We are pleased that Switzerland has signed a bilateral agreement with us, and we look forward to quickly concluding agreements based on this model with other jurisdictions.”
It should be remembered that on January 17, 2013, the Treasury Department and the IRS finalized the regulations implementing FATCA. Therefore, it is expected that FATCA world-wide compliance will begin in earnest by the end of the year.
Implementation of FATCA means an immensely higher chance fo detection of the non-compliant U.S. taxpayers with undisclosed foreign accounts. It is highly important to conduct voluntary disclosure prior to IRS detection, because an IRS investigation will preclude the possibility of entering in the 2012 Offshore Voluntary Disclosure Program and seriously endanger other disclosure options.
Contact Sherayzen Law Office for Help With Voluntary Disclosure of Foreign Accounts
If you have undisclosed offshore accounts, contact Sherayzen Law Office NOW to discuss your voluntary disclosure options. Our experienced international tax law firm will thoroughly analyze your case, assess your current FBAR and Form 8938 liability, identify the voluntary disclosure options available to you and implement the desired disclosure option, including preparation of all legal and tax documents.