Robert J. Fedor, Esq., L.L.C.

Requirements of U.S. Banks when it comes to FATCA

The reporting requirements of the Foreign Account Tax Compliance Act have affected banks worldwide.  Foreign banks that do not report details concerning foreign accounts can suffer consequences.  The requirements can also affect U.S. banks as well.

Bankers associations from two states previously filed a lawsuit in federal court challenging IRS and Treasury Department rules regarding the reporting requirements. There were concerns that the rules would place too much of a burden upon U.S. banks and would discourage foreign investment in the U.S.  

The rules disputed concern the requiring of U.S. banks to provide information about accounts held by non-resident aliens. The disclosure requirements are considered strict as any account earning interest of $10 per year need to be reported.

This lawsuit has been dismissed. The Treasury Department and the IRS have maintained that such regulations need to be applied towards U.S. banks if we are expecting foreign banks to comply with reporting requirements as well. The judge also felt that applicable rules would only bring along minimum burdens for banks and its customers. It now appears even more likely that the new rules will go into effect in March 2014.

That such a tax case was even filed demonstrates the concerns that banks have regarding FATCA reporting requirements. Tax authorities often have a different interpretation concerning compliance of rules than do tax payers or businesses. Seasoned tax attorneys can help these banks out in making certain that the rules are complied with. Tax attorneys can also assist clients in the event that disagreements arise as to what does need to be reported.

Source: Forbes, “Even U.S. Banks Must Aid IRS Hunt for Offshore Accounts,” Robert W. Wood, Jan. 16, 2014

No Comments

Leave a comment
Comment Information