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With tax treaties being signed be all countries there will soon be nowhere to hide and it is in your very best interest to hire a taxpro worth there grain of salt to represent your best interest.

If you have not been contact yet, they will soon be coming. This is not a scare warning but a new reality.

Why???

There is just to much tax money at stake and the government want there fair share and believe me, they are going to get it.

How will they collect it?

Through fear of criminal prosecution and cooperation with other government agencies because of  international tax treaties.

Last three years results

In the last  three years there was over $5 billion collected and reports by some government agency officials report there’s another $450 billion yet to collect.

That is the number they believe the existing tax gap is between filers and non-filers.

How will they get your information

How are they going to collect, through the implementation of SCHEMA, the new International Data Exchange.

The New International Data Exchange Service:

The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States. This is bad news!

The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.

The International Data Exchange Service: What is it?

1.     Is based on business requirements collected by a multilateral working group
2.     Serves as a single point of FATCA information delivery for both FIs and HCTAs
3.    May be used for automatic exchange with all FATCA jurisdictions
4.    Is based on readily-available mature technology
5.    Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
6.    Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.

What is FBAR – Report of Foreign Bank and Financial Accounts (FBAR)

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR).

Current FBAR Guidance  FinCEN introduces new forms

On September 30, 2013, FinCEN posted, on their internet site, a notice announcing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form). FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website.

The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Form 114. It also offers an option to “explain a late filing,” or to select “Other” to enter up to 750-characters within a text box where the filer can provide a further explanation of the late filing or indicate whether the filing is made in conjunction with an IRS compliance program.

On July 29, 2013, FinCEN posted a notice on their internet site that introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf.

The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request.
Filing deferral for certain individuals with signature authority only, effective through June 30, 2015

FinCEN Notice 2013-1 extended the due date for filing FBARs by certain individuals with signature authority over, but no financial interest in, foreign financial accounts of their employer or a closely related entity, to June 30, 2014.

Foreign Account Tax Compliance Act (FATCA)

The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.

• FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts

• FATCA focuses on reporting:

1. By U.S. taxpayers about certain foreign financial accounts and offshore assets

2. By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest.

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