The Supreme Court Throws out a petition against the state’s decision to implement US legislation requiring Americans living in Israel to fully disclose their foreign bank accounts
FATCA requires Israeli financial institutions to report American citizens who hold accounts in Israel, including dual citizens, to the Israel Tax Authority by September, which in turn, will hand over tax information to the IRS.
Israeli banks have already begun enforcing the law. The measure, enacted in 2010, is seen by many as too invasive and unconstitutional, though the US says it is necessary to combat international efforts to evade paying taxes.
US citizens and Green Card holders who hold accounts in Israel, and who have less than $50,000 in their accounts, are exempt from the reporting requirements. However, if the IRS suspects the banks are withholding information, all accounts will be liable for review, according to a statement from the Finance Ministry.
The Israeli financial institutions must give their clients 30 days’ notice that their information will be handed over to the US authorities.
When the agreement was announced, the deal was seen to be of particular concern to dual citizenship holders who have either failed to file tax returns or have not reported their income tax correctly.
What you Should Do if You Have Israeli Bank Accounts
If you have undeclared assets in Israel, or are unsure whether you are in compliance with offshore reporting requirements, now is the time to act. Please contact our office to schedule a free consultation to review your tax situation.