By Dec 31st, 2013, all FIIs
(Foreign Financial Institutions) that are required to register with the IRS
must do so. They are also required to begin reporting to the IRS. Noncompliance
attracts heavy penalty. Switzerland is warning its banks to consider the payment
of penalties charged for letting Americans evade taxes.
Switzerland’s financial regulator is
advising banks that are facing tax evasion charges in the U.S. to keep aside
millions that they might need to pay in penalties. A state-backed Swiss bank
kept aside $112 million to fight a legal battle and to pay fines incurred due
to a Department of Justice probe. In 2014, the IRS might crack down upon
foreign financial institutions (FIIs) that do not comply with FATCA
The U.S. has made agreements with the
governments of many countries, and is continuing to make new agreements. On
Thursday, the U.S. Treasury Department made anti-tax evasion agreements with
the governments of Bermuda, the Netherlands, Malta and three U.K. Crown
Dependencies. These jurisdictions were used as tax havens. In late November,
the U.S. made FATCA agreements with the Cayman Islands and Costa Rica.
The U.S. has made remarkable progress in
making agreements under FATCA. It has already made agreements with many
important countries and tax havens, including France, Costa Rica, Germany,
Spain, Switzerland, Cayman Islands, Denmark, the U.K., Mexico, and Ireland. To
improve tax compliance, the IRS is also running its Offshore Voluntary
Disclosure Program (OVDP) for the U.S. taxpayers.
Strict implementation of FATCA is expected to recover billions of dollars in
lost revenue. Apart from the tax money that was lost to the treasury due to tax
evasion, the IRS can also expect to receive a substantial amount in penalties.
The recent efforts by the U.S. to curb tax evasion are strong enough to
drastically bring down tax evasion.
Labels: IRS, Tax News, Tax Scams, Taxpayers