FATCA enforcement by the IRS may soon begin
The Foreign Account Tax Compliance Act was passed in 2010. FATCA concerns foreign accounts owned by U.S. taxpayers and puts in place certain reporting requirements for foreign financial institutions to disclose the accounts. While certain provisions have been delayed it does appear that enforcement during an implementation transition period will soon begin. During this transition, the IRS will be making efforts to force banks to report offshore accounts of U.S. Citizens.
That such an act was passed demonstrates how important federal authorities feel it is for offshore accounts to be scrutinized. Foreign financial institutions will be facing increasing pressure from the IRS. In addition, individuals holding accounts at these banks could also find themselves facing IRS criminal investigations related to tax evasion concerning income that was not reported and for failure to report offshore accounts. There can also be heavy civil penalties for a person’s failure to disclose the offshore accounts that will be reported to the IRS under FATCA.
Source: Accounting Today, “IRS Eases FATCA Enforcement for 2014 and 2015,” Michael Cohn, May 2, 2014