The U.S. Department of the Treasury recently announced that it is engaged with more than 50 countries and jurisdictions around the world to improve international tax compliance and implement the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA). Enacted by Congress in 2010, these provisions target noncompliance by U.S. taxpayers using foreign accounts. Treasury’s engagement with this broad coalition of foreign governments to efficiently and effectively implement FATCA marks an important milestone in establishing a common intergovernmental approach to combating tax evasion.
Model Intergovernmental Agreement and Most Recent Developments
This year, the Treasury Department published a model intergovernmental agreement for implementing FATCA and announced the development of a second model agreement. These models serve as the basis for concluding bilateral agreements with interested jurisdictions.
The Treasury Department has already concluded a bilateral agreement with the United Kingdom. Additional jurisdictions with which Treasury is in the process of finalizing an intergovernmental agreement and with which Treasury hopes to conclude negotiations by year end include: France, Germany, Italy, Spain, Japan, Switzerland, Canada, Denmark, Finland, Guernsey, Ireland, Isle of Man, Jersey, Mexico, the Netherlands, and Norway.
Jurisdictions with which Treasury is actively engaged in a dialogue towards concluding an intergovernmental agreement include: Argentina, Australia, Belgium, the Cayman Islands, Cyprus, Estonia, Hungary, Israel, Korea, Liechtenstein, Malaysia, Malta, New Zealand, the Slovak Republic, Singapore, and Sweden. Treasury expects to be able to conclude negotiations with several of these jurisdictions by year end.
The jurisdictions with which Treasury is working to explore options for intergovernmental engagement include: Bermuda, Brazil, the British Virgin Islands, Chile, the Czech Republic, Gibraltar, India, Lebanon, Luxembourg, Romania, Russia, Seychelles, Saint Maarten, Slovenia, and South Africa.
Aggressive Effort by the United States to Assure International Compliance with U.S. Tax Laws
All of these moves by the Treasury Department with respect to FATCA implementation agreements is part of a broader effort to assure international compliance with U.S. tax laws. FATCA has already gave birth to a powerful compliance weapon that must be filed by U.S. taxpayers in the United States – namely, Form 8938. In combination with other information returns, such as FBARs, Form 5471, Form 8865, Form 926, Form 3520 and others, FATCA hopes to achieve universal tax compliance among U.S. taxpayers who are engaging in international activities.
Contact Sherayzen Law Office for Help with Disclosure of Foreign Accounts and Foreign Income
If you have undisclosed offshore accounts and you have not reported your foreign income, contact Sherayzen Law Office for legal help. Our experienced voluntary disclosure firm will thoroughly review your case, advise you on the available disclosure options, prepare your voluntary disclosure documentation (including tax returns and offshore information returns such as Forms 5471, 8865, 926, 3520, FBARs and others) and vigorously represent your interests during the entire disclosure process.