Levins Tax Law, LLC
Schedule your initial consultation:
866-485-7019

What businesses should know about foreign deposits

The Foreign Accounts Tax Compliance Act (FATCA) is now operational and the Internal Revenue Service is reportedly poised to start issuing penalties for non-compliance. FATCA requires foreign banks to disclose to the federal government Americans who have foreign accounts with more than $50,000. The 30 percent withholding penalty on foreign transactions was supposed to be a deterrent; but with few withholdings taking place and more to come, the deterrent may not have had its intended effect.

However, it appears that the IRS is getting ready to make good on its promise to get tough on foreign depositors. FATCA requires banks to inquire as to whether you are compliant with federal law. And the list of banks that show up in the IRS’ Offshore Voluntary Disclosure Program (OVDP) is growing.

So with how difficult the federal government is making it on foreign depositors, it is ironic how secretive it is with information from U.S. financial institutions. According to a 2015 report from the Tax Justice Network, the federal government doesn’t practice what it preaches.  The report indicates that the U.S. is worse off than the Cayman Islands when it comes to making information available.

In fact, the federal government reportedly has refused to participate in the OECD’s global information exchange for bank data, which was designed to help in abating tax evasion. It remains to be seen whether there will be changes in information sharing given this report. In the meantime, businesses with foreign holdings that have not been disclosed should discuss their situations with an experienced tax law attorney.

No Comments

Leave a comment
Comment Information
Email Us For a Response

Resolve Your Tax Problems

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Framingham Office
1671 Worcester Road
Suite 304
Framingham, MA 01701

Framingham Tax Law Office

Boston Office
38 Newbury Street
6th Floor
Boston, MA 02116

Boston Tax Law Office

By Appointment Only