by Micah Willbrand - LexisNexis ®.* ... At the time of its passage in 2010, the Foreign Account Tax Compliance Act (FATCA) appeared to be another reporting requirement for financial institutions (FIs). However, FATCA has long-term benefits for FIs - specifically the ability to streamline and standardize customer onboarding requirements, drive customer experience improvements and, ultimately, enhance profits. ...

by Lawrence A. Kogan* The Foreign Account Tax Compliance Act of 2010 (FATCA) and its regs impose certain information gathering, reporting and withholding requirements on nonfinancial foreign entities (NFEEs) operated by U.S. taxpayers overseas. In part, FATCA is intended to address difficulties that authorities have had with identifying US beneficial owners of US source income paid through foreign entities. ... ...

I've been asked to explain comments I made in a recent talk about FATCA, when I said that this regime constitutes a tax treaty override, and that I don't think that IGAs are a valid fix as a matter of law. Here is my reasoning. I will use the US-Canada tax treaty as an example, but the override applies to all US tax treaties currently in force. This is a lengthy post so let me preface with the executive summary...

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today issued TD 9610 Final Regulations implementing the information reporting and withholding tax provisions commonly known as the Foreign Account Tax Compliance Act (FATCA). The issuance of the final regulations marks a key step in establishing a common intergovernmental approach to combating tax evasion. These regulations provide additional...

* by Lawrence A. Kogan, Esq. FATCA's Objective The Foreign Account Tax Compliance Act ("FATCA"), which added new Chapter 4 to Subtitle A of the Internal Revenue Code (comprising Sections 1471 , 1472 , 1473 , and 1474 ) was signed into law on March 18, 2010 by President Obama as part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-47 . FATCA's objective is to help "plug"...

In 2010, Congress enacted the Foreign Account Tax Compliance Act (FATCA) as part of the Hiring Incentives to Restore Employment Act ("the HIRE Act"), and the legislation amended the Internal Revenue Code with the goal of increasing foreign account tax reporting and compliance. [The Hiring Incentives to Restore Employment Act, Pub L No 111-147, 111th Cong, 2d Sess (March 18, 2010).] the provisions of FATCA were...

By Karen Yip, LexisNexis Federal & International Tax Analyst The IRS requires the Report of Foreign Bank and Financial Accounts, TD F 90-22.1 (commonly known as the Foreign Bank Account Report, or "FBAR"), when a U.S. person has a financial interest in, or signature authority over, one or more foreign financial accounts with an aggregate value greater than $10,000. If a report is required, certain records...

According to Treasury Department News Release TDNR TG-1711 (September 14, 2012), the United Kingdom and the United States have entered into an agreement to implement the information reporting and withholding tax provisions known as the Foreign Account Tax Compliance Act (FATCA) (enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010 (P.L. 111-147) . The agreement defines numerous terms, enumerates...

The Hiring Incentives to Restore Employment Act ("the HIRE Act"), signed into law by President Obama on March 18, 2010, amended and added provisions of the Internal Revenue Code with the aim of increasing foreign account tax compliance. The provisions of the Foreign Account Tax Compliance Act (FATCA), enacted as part of the HIRE Act, added Sections 6038D, 1471, 1472, 1473, and 1474 to the Internal Revenue Code...

U.S. taxpayers with assets overseas and their advisers should be mindful of new Form 8938, Statement of Specified Foreign Financial Assets , as they prepare the taxpayers' federal income tax returns for 2011. Temporary Regulations issued in December 2011 state that, with certain exceptions, Form 8938 must be filed by "a specified person that has any interest in a specified foreign financial asset during the...

By Steven D. Bortnick and Timothy J. Leska , Attorneys, Pepper Hamilton LLP In March 2009, Sen. Carl Levin (D-Mich.) introduced the Stop Tax Haven Abuse Act (S. 506) (the 2009 Act) to "stop tax cheats" and target "off-shore tax abuses that rob the U.S. Treasury."[1] Although most of its provisions never were enacted, it did lead to the passage of sweeping withholding and information-gathering...

In late July, the Treasury released a Model 1 Intergovernmental Agreement (IGA) to facilitate foreign financial institutions’ (FFIs) compliance with FATCA reporting rules. The Model 1 IGA generally requires FFIs to report information directly to their respective government, which then...

A recent flurry of signed IGAs and press releases on ongoing negotiations suggests the US is acting tremendously quickly and even brazenly on FATCA. Almost as if they are trying to get this all nailed down before anyone outside the US government has time to study it and think it through. This is absurd, considering the enormity of what FATCA is trying to do--an enormity that is acknowledged in the IGAs themselves merely...

On November 14, the US Treasury Department released a template (the “Model 2 IGA”) that is to be used for negotiating “model 2” FATCA intergovernmental agreements. The “model 2” approach, which was first announced in joint statements made by the US Treasury...

The Foreign Account Tax Compliance Act (“FATCA”) was enacted in 2010 as part of an effort to combat tax evasion by U.S. taxpayers holding investments in offshore accounts and through offshore intermediaries. FATCA creates a new tax information reporting and withholding regime for...

Treasury has now released the long-anticipated “Model 2” intergovernmental agreement (“IGA”) to facilitate the implementation of FATCA, which is expected to be the template of the US agreements with Switzerland, Japan, and certain other countries where there might be...

In Announcement 2012-42, the U.S. Treasury Department announced that due diligence deadlines under the Foreign Account Tax Compliance Act (FATCA) are being extended in light of voluminous comments received in response to proposed regulations issued in February 2012. This announcement provides...

On October 24, 2012, the IRS issued Announcement 2012-42, presenting additional guidance for effectuating the Foreign Account Tax Compliance Act (FATCA). The new guidance, to be incorporated in the still forthcoming final regulations, sets out new deadlines for due diligence, postpones withholding...

On October 24, 2012, IRS released Announcement 2012-42 (the “Announcement”), which delays certain key dates for FATCA compliance.

On October 24, 2012, the Internal Revenue Service (IRS) and the US Department of Treasury (Treasury) issued “Announcement 2012-42: Timelines for Due Diligence and Other Requirements under FATCA” (the Announcement). FATCA generally requires a 30% withholding tax be imposed on (i) foreign...

On October 24, the Internal Revenue Service issued Announcement 2012-42, which (i) delays gross proceeds withholding under the “Foreign Account Tax Compliance Act” provisions contained in sections 1471-1474 of the Internal Revenue Code (“FATCA”), (ii) grandfathers (i.e.,...

On October 24, 2012, the U.S. Internal Revenue Service (IRS) issued Announcement 2012-42: Timelines for Due Diligence and Other Requirements Under FATCA (Announcement). The Announcement provides that final regulations (Final Regulations) issued under the tax provisions commonly referred to as the...

In response to continuing concerns raised by foreign financial institutions, the IRS has issued new guidance further delaying a number of the FATCA implementation deadlines in the form of Announcement 2012-42 (the “Announcement”), offering FFIs much needed additional time to prepare.

Yesterday, the IRS and Treasury Department issued Announcement 2012-42 (the “Announcement”), which delays certain FATCA compliance deadlines and identifies three new classes of “grandfathered obligations.” Key changes noted in the Announcement include the following:

In July of this year, Treasury released a model intergovernmental agreement (IGA) that offered a work-around to foreign entities whose countries of residence have laws preventing the entities from complying directly with FATCA and reflected a cooperative intergovernmental approach to tackling...