Foreign Account Tax Compliance Act (FATCA)

Posted by accelerocorp on June 9th, 2014

The Foreign Account Tax Compliance Act (FATCA) was passed as part of an aggressive drive by the IRS and the government to reduce the tax gap by ensuring payment of taxes from incomes made offshore. This Act requires that taxpayers who have assets and financial accounts that exceed a given threshold make disclosure of these accounts by filing an FATCA form.

Foreign Account Tax Compliance Act enacted as part of the HIRE Act of 2010, requires financial institutions to use enhanced due diligence procedures to pinpoint US persons who have invested in either non-US financial accounts or non-US entities. The main intention behind FATCA is to keep US persons from hiding income and assets overseas.

The Act also requires foreign banks to release information about the American citizens who hold accounts with the banks. Besides individuals who have foreign accounts, the foreign institutions will also be required to make disclosures on accounts held by U.S citizens. The disclosure is expected to help the Treasury and the IRS collect information and compare the information with taxes remitted against foreign incomes.

The IRS can then follow through with any discrepancies and get to those who evade paying taxes on such foreign incomes. With implementation of FATCA, now persons will no longer able to keep their income and assets overseas hiding. Moreover the accountholders failing to provide the FFI with FATCA reporting documentation would be regarded as recalcitrant. The IRS has also made it very clear that it will be investing heavily towards getting to those who evade paying taxes on foreign incomes.

If you are looking for professional consultants, then now you can take help of online mediums to scour all your options or you simply need to know about the team available online at accelero-corp.com. These professionals are known for offering the FATCA compliance solution that enables organizations to easily comply with key provisions of the Act. To help you prepare, they have formed a network of FATCA specialists in key markets throughout the world. These professionals strive to bring together specialists who know the intricacies of tax law as well as local jurisdictions, rules and regulations.