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Yearly Archives: 2012

IRS Working to Issue Final Rules on FATCA by End of Summer.

March 2, 2012

The government hopes to issue final regulations under the Foreign Account Tax Compliance Act by the end of the summer, Treasury Deputy Assistant Secretary for International Tax Affairs Manal Corwin said March 1.

In addition, the government will be working to “operationalize” government-to-government information sharing agreements under FATCA, she said at the USA Branch of the International Fiscal Association conference.

The United States, France, Germany, Italy, Spain, and the United Kingdom jointly announced they were working toward such agreements Feb. 8, the same day the Internal Revenue Service issued nearly 400 pages of rules that individual banks could use to report U.S.-owned accounts to IRS.
Corwin stressed the government-to-government agreements are not exceptions, but an alternative approach, to FATCA.

She said the United States is currently in discussions with many other jurisdictions on a similar approach.

Read more at: Tax Times blog

Swiss banking secrecy laws have been further eased, with parliament passing a law on tax cooperation and backing – in principle – a special deal with the United States.

March 1, 2012

In a lengthy and at times passionate debate which included discussion of some two dozen proposed amendments, the House of Representatives voted 113 to 58 on Wednesday to pass the government’s proposed law on administrative assistance in taxation matters.

The new law replaces a previous regulation for assistance on tax matters and is based on standards set out by the Organization for Economic Co-operation and Development (OECD).

Previously, Switzerland had differentiated between tax evasion and fraud, allowing only for providing assistance in cases of fraud. In a blow to banking secrecy in 2009 it agreed to lift this legal distinction.

The accord would allow for administrative assistance to be provided to the US in matters involving grouped requests for information, based on a suspicious “pattern of behaviour” by people or financial institutions. US tax authorities would not have to provide names or addresses of its suspects in order to receive assistance.
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Read more at: Tax Times blog

FinCEN Seeks Comments on Strengthening and Clarifying Customer Due Diligence Requirements

March 1, 2012

VIENNA, Va. – The Financial Crimes Enforcement Network (FinCEN) today issued an advance notice of proposed rulemaking (ANPRM) to solicit public comment on a wide range of questions pertaining to the possible application of an explicit customer due diligence (CDD) obligation on financial institutions, including a requirement for financial institutions to identify beneficial ownership of their accountholders.

"The explicit requirement that a financial institution know its customers, and the risks presented by its customers, is basic and fundamental to both serving those customers and implementing a program that protects a financial institution from abuse by illicit actors," said FinCEN Director James H. Freis, Jr. “The comments we receive will help us balance the information needs of law enforcement with the responsibilities placed on the financial industry.”

This includes a requirement for financial institutions to identify beneficial ownership of account holders.

FinCEN's press release is at http://www.fincen.gov/news_room/nr/html/20120229.html.

Read more at: Tax Times blog

Estate Responsible for Penalties For Decedent's Failure to Report Foreign Trust

February 27, 2012

The Internal Revenue Service Office of Chief Counsel, in a chief counsel advice memorandum released Feb. 24, said an estate is responsible for Section 6677 penalties for failure to file information returns regarding foreign trusts for tax years ending prior to the decedent's death.

The estate is responsible for “initial” penalties asserted against the decedent where Forms 3250, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and 3250-A, Annual Information Return of Foreign Trust With a U.S. Owner, were not timely filed with respect to a foreign grantor trust established by the decedent, the office said in CCA201208028

Read more at: Tax Times blog

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