The Internal Revenue Service on Monday launched an online registration program for the hundreds of…
FATCA-Compliant Institutions List Goes Online
While over 77,000 banks and financial institutions have registered under FATCA—the Foreign Account Tax Compliance Act, the Internal Revenue Service has introduced an online tool that will allow users to check on whether a foreign financial institution has registered for FATCA.
FATCA was included as part of the US HIRE Act of 2010 and requires foreign financial institutions to provide information on their U.S. account holders to the Internal Revenue Service or else face severe penalties. The law has attracted controversy abroad amid concerns that it violates other countries’ banking secrecy laws. However, after delays, some changes in regulations by the IRS and the Treasury Department, and a series of intergovernmental agreements between the Treasury and tax authorities in other nations, the requirements are beginning to take effect this year.
FATCA requires foreign banks to reveal American accounts holding over $50,000. Non-compliant institutions could be frozen out of U.S. markets and subjected to punitive withholding taxes. Foreign Financial Institutions (FFIs) must report account numbers, balances, names, addresses, and U.S. identification numbers. There is 30% withholding on any institution that fails to report.
The IRS has published a searchable list of financial institutions. The FFI List Search and Download Tool is located on the IRS’s FATCA Website. The tool can be used to search for the name of a specific foreign financial institution and find out if it has registered under FATCA. Users can also download an entire list of financial institutions with the tool. See the FFI List Search and Download Tool and User Guide. Countries complying with FATCA can be found at FATCA – Archive.
The fact that 77,000 banks have registered and over 70 countries are providing government help to the IRS means that no foreign account is secret.Americans must report worldwide income and many must file IRS Form 8938 to report foreign accounts and assets. With such comprehensive databases, noncompliant taxpayers should beware; the IRS has quicker, better and more complete information than ever.