“Foreign countries realize the U.S. is very serious and will be very aggressive in finding the unreported offshore assets and bank records for U.S. citizens and residents,” Los Angeles Income Tax Planning and Asset Protection Plan Attorney Bruce Givner stated emphatically. France, Germany, Italy, Spain, the Channel Islands, and the U.K. are negotiating or have negotiated compliance with the U.S. under the Foreign Accounts Tax Compliance Act (FATCA). It appears that Ireland will soon join its European neighbors in signing a FATCA Intergovernmental Agreement.
Beginning January 2013, FATCA requires foreign banks and financial institutions to disclose information on American account holders to the U.S. government. Information required includes account balances, receipts, and withdrawals. Foreign banks and financial institutions that fail to report are subject to a 30% withholding tax on income from US financial assets held by the banks.
In July 2012, the US Department of Treasury released two versions of the Model I Intergovernmental Agreement. The first model dealt with a reciprocal information exchange where the FATCA partner country has an existing tax treaty or tax information exchange agreement with the US. In this situation, the FATCA Partner country will comply with FATCA requirements and avoid the 30% FATCA withholding tax by collecting and reporting to their tax authorities. The second model dealt with an information exchange on a non-reciprocal basis where no such agreements exist. Because Ireland has a comprehensive tax treaty with the U.S. it is expected that their FATCA Intergovernmental Agreement will follow the first model.
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.