Big Brother is coming!

The governments of the world all want their money and they are all getting together to make sure they collect their fair share of revenue for their country.

The United States is been very productive over the last three years collecting over $6 billion of offshore money that was never reported to the Internal Revenue Service.

Over 42,000 taxpayers and individuals came forward to do their reporting to make sure they did not spend time in club Fed.

But now everybody is getting into the act

19 Nations just added to the list

The Treasury Department added 19 nations to its list of countries that have reached agreements with the United States.

The Treasury and the Internal Revenue Service said the 19 nations including Australia, Brazil, South Africa and South Korea, as well as several tax havens, such as British Virgin Islands .

The latest announcement which brings the total number of countries with effective agreements to a whooping 45, gives foreign financial institutions in the affected countries more certainty about their responsibilities under the new FATCA era.

What is FATCA?

FATCA requires financial institutions to use enhanced due diligence procedures to identify US persons who have invested in either non-US financial accounts or non-US entities.

The intent behind FATCA is to keep US persons from hiding income and assets overseas.

The US Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released on February 20, 2014 two sets of final and temporary regulations for FATCA. The first set contains changes to the provisions of Chapter 4 of the Internal Revenue Code (Code) commonly referred to as the Foreign Account Tax Compliance Act (FATCA Regulations).

The second set of regulations (Link) coordinate the documentation standards, reporting and withholding rules relating to payments made to non-US and US persons (Chapters 3 and 61 and Section 3406 of the Code), with the FATCA regulations.

The regulations contain many changes with the impact varying depending on the products or services and whether a company’s activities are on shore or offshore. Broadly speaking, the guidance is a compilation of many smaller changes and clarifications.

In general, the law requires foreign financial institutions to provide information to the U.S. about Americans’ overseas accounts.

The U.S. has allowed foreign governments to serve as conduits for the information in many cases.

Without an intergovernmental agreement of some kind, foreign financial institutions face potentially stiff penalties in their dealings with U.S. financial institutions.

The 19 countries being added to the list include:

• Australia,
• Austria,
• Belgium,
• Brazil,
• British Virgin Islands,
• Czech Republic,
• Gibraltar,
• Jamaica,
• Kosovo,
• Latvia,
• Liechtenstein,
• Lithuania,
• Poland,
• Portugal,
• Qatar,
• Romania,
• Slovenia,
• South Africa and
• South Korea.

Please keep in mind more will be added to this list.

If you have any issues or need to speak to a tax attorney, contact us today and have a conversation that will be privileged with a tax attorney who was in expert in international matters.

BEWARE – FBAR/FATCA – Offshore Arm of Treasury is Reaching Out – Lawyer Experts FBAR/FATCA Representation