Does anyone recall the scrambling of many people when the United Bank of Scotland (UBS) and several Swiss banks decided to reveal the identities of American account holders to the US Treasury Department? The IRS and the USDOJ agreed to an amnesty program, where American account holders who were out of compliance (violators) could voluntarily comply with FACTA (The Foreign Account Tax Compliance Act). With the help of competent Legal Counsel, some took advantage of this opportunity, paid the taxes and penalties and removed the possibility of criminal liability. Some did not, and moved money to a different country… and I hope for them it was not France, Britain, Denmark, Germany, Ireland, Japan, Mexico, Norway, or Spain. See the article below.
Nov 14 (Reuters) – The United States has signed an anti-tax evasion agreement with France, the 10th country to join a U.S. global dragnet that goes into effect next July, the U.S. Treasury said on Thursday.
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, will from then require financial institutions abroad to disclose Americans’ offshore accounts worth more than $50,000 to the tax-collecting U.S. Internal Revenue Service.
To implement FATCA worldwide, the U.S. Treasury Department is negotiating “intergovernmental agreements” (IGAs) with more than 50 countries. These pacts give financial institutions in those countries more certainty about what they must do to comply with FATCA.
With the French IGA signed, French banks and financial institutions will report information about U.S. customers’ relevant offshore accounts to the French government, which will then send that information on to the IRS.
“This agreement demonstrates the growing global momentum behind FATCA and strong support from the world’s most important economies,” Deputy Assistant Secretary for International Tax Affairs Robert Stack said in a statement on Thursday.
The signing of the French IGA was delayed by a 16-day U.S. federal government shutdown in October, French officials have said previously.
The IGA is reciprocal, requiring the IRS to send France similar information about French account holders. This reciprocal arrangement has raised concerns among U.S. banks and some members of Congress.
If you or someone you know needs help complying with FACTA including Foreign Bank Account Reporting (FBAR) as opposed to FUBAR, call our office immediately!