GAO Issues Report on Offshore Reporting
The Government Accountability Office recently released a report questioning the rules for reporting offshore assets, claiming they are duplicative and should be streamlined.
Nearly 75 percent of U.S. citizens with offshore assets reported their assets to the Treasury Department twice—to the Internal Revenue Service and to the Financial Crimes Enforcement Network (FinCEN), according to an April 1 report.
“There are two information reporting requirements with the same information in the reports, and there is no significant difference in terms of thresholds so the two could be streamlined so that taxpayers are filing out a single form,” said James R. McTigue Jr., director of tax issues for the strategic issues team at the GAO.
The Two Reporting Acts
The Foreign Account Tax Compliance Act and the Bank Secrecy Act were introduced at different times and are “heavily duplicative,” McTigue said.
The Bank Secrecy Act requires U.S. citizens to report offshore assets and accounts valued at more than $10,000, while FATCA requires the same individuals or financial institutions to report assets held offshore.
FATCA was introduced in 2010 to crack down on tax evasion by U.S. citizens using foreign accounts to hide assets from the IRS. Final FATCA regulations (T.D. 9852) were released March 21. The IRS had difficulty matching the information reported by foreign financial institutions with U.S. taxpayer filings due to mismatching taxpayer identification numbers, the report said.
How This Affects You
Until actual changes are made, a majority of people will still need to file both information reports. If you have questions or concerns about your filing requirements, please contact our office for a free, confidential consultation.