By Whitney Braunlin
The tax attorneys at Nardone Law Group are tracking the latest developments regarding the Foreign Account Tax Compliance Act (FATCA) and the IRS’s continued efforts to combat offshore tax evasion. The newest development in improving offshore tax compliance is Spain’s agreement to share information with the U.S. about foreign account holders. Under FATCA, foreign financial institutions report information to the IRS about financial accounts held by United States taxpayers. The FATCA requires individuals with offshore accounts or interests in foreign entities that are worth more than $50,000 to file Form TD F 90-22-1 (FBAR) and/or Form 8938. For a summary of FATCA reporting requirements for U.S. taxpayers, please see the IRS’s website here.
Through Intergovernmental Agreements, the United States secures the cooperation of foreign governments with FATCA enforcement. The United States entered its seventh Intergovernmental Agreement with Spain on May 14, 2013. This means Spain and the United States will share information about each other’s taxpayers and foreign accounts. Other countries that have agreed to cooperate with the United States in enforcing the FATCA are Norway, Switzerland, Ireland, Mexico, Denmark, and the U.K.
This new agreement shows the IRS is taking offshore enforcement seriously. Clients with offshore accounts who have not disclosed them to the IRS should consider the IRS’s Offshore Voluntary Disclosure Program (OVDP). Whether or not your foreign account is located in a country with an intergovernmental agreement with the U.S., you must report that account to the IRS under FATCA. The OVDP is a way for taxpayers to come into voluntary compliance with U.S. tax laws and forgo the risk of criminal prosecution for noncompliance in the past.
Contact Nardone Law Group
The tax attorneys at Nardone Law Group routinely advise clients in Columbus, Ohio and throughout the country about their federal tax obligations and ways to comply with federal tax law, including compliance with laws governing foreign accounts. If you have questions about your federal tax obligations, foreign accounts, or FATCA filing requirements, you should contact an experienced tax attorney. Our experienced tax lawyers will thoroughly review your case to determine what options and alternatives are available. Contact us today for a consultation to discuss your case.