“The Foreign Account Tax Compliance Act (FATCA) requires U.S. taxpayers with offshore financial assets that exceed certain thresholds to report those assets to the IRS,” said Los Angeles Income Tax Planning & Asset Protection Plan Attorney Bruce Givner. “FACTA also requires foreign financial institutions to report financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest, to the IRS,” added Givner.
The Department of Treasury (DOT) has reached tentative reporting agreements with Japan and Switzerland, and is negotiating with Germany, Italy, France, Spain, and Britain to set up government-to-government information sharing deals. The DOT has now announced two ways for foreign countries to structure government-to-government information sharing deals to comply with FACTA.
One is by implementing a two-way agreement between national tax collection agencies. This deal is only available to countries that have an income tax treaty or tax information exchange agreement with the U.S.in place. Countries without a treaty or agreement in place would use the second method which is to report directly to the IRS.
According to the IRS, the agency is on track to begin penalizing foreign banks in 2014 for failing to comply with FATCA.
Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles County. Call Los Angeles Income Tax and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.