Yearly Archives: 2013

The Internal Revenue Service still has not finalized sign-up instructions for the new online portal, due to open by July 15 in one of the last steps toward implementing the Foreign Account Tax Compliance Act (FATCA) of 2010.

Hundreds of thousands of:

• Banks
• Insurance Companies and
• Investment Funds with US Customers

are required to register with the IRS by October 25 to avoid FATCA penalties starting on January 1, 2014.

In an effort to address some foreign concerns, the United States has signed FATCA deals with nine other governments so far that allow firms to report U.S. client information via their local tax authorities rather than directly to the IRS.

About 80 countries are in negotiations with U.S. Treasury officials about such pacts, known as intergovernmental agreements (IGAs), analysts said.

Germany on Friday passed legislation to implement its IGA with the United States. The United States aims to get as many countries as it can behind the legislation.

Chinese government officials have so far been publicly dismissive of FATCA, throwing into question whether financial firms in Hong Kong will be able to comply with the FATCA law. Hong Kong is said to be "initialing some preliminary discussion" with U.S. officials.

Source:

Reuters

The Internal Revenue Service is considering canceling employee bonuses and using the money to avoid two unpaid furlough days, the agency’s interim leader told staff members in a memo today.

The Tenth Circuit  of the U.S. Court of Appeals upheld the denial of a motion by a Mexican citizen to quash a subpoena issued on behalf of the Mexican taxing authority (Villarreal v. United States, 10th Cir., No. 12-01131, 4/22/13).

The subpoena was issued by the Internal Revenue Service on behalf of the Mexican taxing authority, Servicio de Administracion Tributaria (SAT), to assist with SAT's investigation of Villarreal's 2009 tax liabilities. IRS's assistance was pursuant to an income tax treaty with Mexico.
 
The facts are straightforward. In March 2011, and pursuant to an income-tax treaty between the United States and Mexico, an official with Mexico’s taxing authority, the Servicio de Administraciόn Tributaria (SAT), asked the IRS for help in its investigation of Mr. Villarreal’s 2009 tax liabilities.
 
IRS issued a summons to the Bank that requested copies of account opening documents, signature cards, monthly statements, and certain deposit and withdrawal documents “pertaining to account no. [xxxxxxxx] and any other account associated with [Mr. Villarreal] (including any private banking
accounts associated with this account) for the period January 1, 2009 through December 31, 2009.”

Notice was sent to Mr. Villarreal as required by law, who then filed a motion to quash pursuant to 26 U.S.C. § 7609(b)(2). In the motion, Mr. Villarreal asked the district court to either quash the summons outright or conduct an evidentiary hearing to determine whether the IRS acted in bad faith.

Mr Villarreal made a motion to quash the subpoena and the court ruled against his motion.