Realizing the large administrative burden of FATCA, the IRS has announced a "soft opening" of FATCA…
US FATCA Enforcement Softens due to Coronavirus
The Internal Revenue Service is giving foreign banks and financial institutions more time to file their forms about U.S. taxpayers with overseas bank accounts and other holdings in compliance with the Foreign Account Tax Compliance Act, or FATCA, because of the coronavirus pandemic.
The Internal Revenue Service on Wednesday extended from March 31, 2020 to July 15, 2020 the deadline for foreign financial institutions to file Foreign Account Tax Compliance Act (FATCA) reports disclosing U.S. account holders. Foreign financial institutions now have until July 15 to file Forms 8966 to the IRS to report information on U.S. taxpayer accounts, the agency said in a list of FAQs on its website. The extension from the original March 31 filing date applies to foreign institutions with agreements with the U.S. to satisfy FATCA reporting requirements. Foreign banks that have agreements with the IRS to report financial information on U.S. customers are automatically subject to the July 15 deadline extension and do not have to file a Form 8809-I to request more time to file, according to the agency’s website.
Under FATCA, which Congress passed in 2010 and which took full effect in 2014, foreign banks and other financial institutions are required to report accounts or other assets held by U.S. customers to the IRS. Foreign banks that don’t have agreements with the agency to satisfy the requirements are subject to 30% withholding on payments made to them, according to the IRS.
Our law office, which represents many taxpayers throughout the U.S. and around the world with undisclosed offshore accounts, believes that FATCA has changed the international tax compliance landscape whereby foreign accounts are now entirely visible to the IRS. FATCA should encourage more U.S. taxpayers with undisclosed offshore accounts to come forward before the government contacts them.
Patel Law Offices has consulted with hundreds of clients regarding their offshore asset compliance issues. Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems. Our firm assists (and defends) clients and their advisors to legally disclose (and legitimize) foreign accounts.