IRS releases updated information regarding IGA requirements for jurisdictions that have still failed to sign an IGA by January 1, 2015.
January, 2015 – Since the introduction of the Foreign Account Tax Compliance Act (FATCA) in 2010, there have been some jurisdictions which have been treated as though they signed an intergovernmental agreement (IGA) even though the signing was never officially completed. In these areas, the United States International Revenue Service (IRS) has recently provided clarification regarding filing deadlines for individuals and financial institutions within those areas.
“It is important for individuals and financial institutions to understand the laws in effect within their jurisdiction,” shares Jeffrey S. Freeman, J.D., LL.M. “Depending on the official date an IGA is signed, different procedural requirements and deadlines will be in effect.”
Under FATCA, US taxpayers living abroad are required to document and report financial holdings, accounts, assets, and investments held overseas. Institutions that do not comply with tax reporting requirements may face a 30 percent penalty on payments that originate from the United States. To comply with FATCA, foreign governments can either allow their financial institutions to enter into an individual agreement with the IRS or they can sign a general IGA between the entire jurisdiction and the United States government
According to the IRS statement, an IGA must have been officially signed by December 31, 2014 for it to be considered in effect. Jurisdictions that failed to actually sign the IGA by that date will now be re-evaluated by the IRS on a monthly basis. If the jurisdiction has still failed to sign the IGA but shows a strong resolve to do so in the near future, it will still be treated as if the IGA was in effect. If the jurisdiction fails to sign and fails to show further initiative towards the process it will be removed from the list.
“Taxpayers living abroad should seek out professional legal assistance to ensure they are in compliance with FATCA under the requirements of their jurisdiction,” shares Freeman J.D., LL.M..
About Freeman Tax Law
Freeman Tax Law (FTL) is a boutique law firm consisting of a multi-disciplinary team of tax professionals including tax attorneys, CPAs and a professional staff that have vast experience with foreign tax compliance and regulatory matters for financial institutions. FTL consults with both FFIs and USFIs with regard to Foreign Account Tax Compliance Act (FATCA) and related regulatory matters and assists them developing procedures on how to comply with these laws. FTL provides a multidisciplinary approach for filing offshore voluntary disclosures. Working to help clients prevent future tax headaches we offer a complete wealth management and estate planning team. As an experienced firm with wide reach, Freeman Tax Law provides immediate assistance to our clients planning for and resolving all tax related challenges.
Freeman Tax Law