The U.S. Department of the Treasury (DOT) and the Internal Revenue Service (IRS) recently issued final FACTA regulations. FACTA, the Foreign Account Tax Compliance Act enacted in 2010, targets U.S. taxpayers who use foreign accounts to avoid paying taxes. Foreign financial institutions are now required to provide account information to the IRS for U.S. taxpayers, or foreign entities in which U.S. taxpayers hold a substantial ownership interest.
The final FACTA regulations:
1. Phase in the timelines for foreign financial institutions to perform due diligence, reporting, and withholding. Also, regulatory timelines are aligned with the timelines prescribed in the intergovernmental agreements.
2. Exclude certain grandfathered obligations and certain payments made by nonfinancial entities from the withholding requirement.
3. Provide a streamlined registration and compliance procedures for groups of financial institutions, including commonly managed investment funds, and provide additional detail regarding the obligations of foreign financial institutions to verify their compliance under FATCA.
4. Expand and clarify the treatment of certain categories of institutions deemed as low risk for tax evasion, such as governmental entities and retirement funds.
5. Facilitate the effective and efficient implementation of FATCA by eliminating legal barriers to participation, reducing administrative burdens, and ensuring the participation of all non-exempt financial institutions in a partner jurisdiction.
Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.