IRS Announces Exchange of Information with Foreign Tax Administrations, Meeting FATCA Milestone (IR-2015-111)

The IRS has announced the exchange of financial account information with certain foreign tax administrations, meeting an important milestone related to the Foreign Account Tax Compliance Act (FATCA) (P.L. 111-147). In order to accomplish this, the IRS developed the information system infrastructure, procedures and data use and confidentiality safeguards to protect taxpayer data while facilitating reciprocal automatic exchange of tax information with certain foreign jurisdiction tax administrators as specified under the intergovernmental agreements (IGAs) implementing FATCA. This information exchange is part of overall efforts by the IRS to implement FATCA, enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts or foreign entities.

The U.S. government, responding to the enactment of FATCA, as well as the interest of other jurisdictions in facilitating and participating in the exchange of financial account information, entered into a number of bilateral IGAs that provided the groundwork for inter-jurisdictional cooperation. Certain IGAs not only enable the IRS to receive this information from foreign financial institutions, but also enable more efficient exchange by allowing a foreign jurisdiction tax administration to gather the specified information and provide it to the IRS. Some IGAs also require the IRS to reciprocally exchange certain information about accounts maintained by residents of foreign jurisdictions in U.S. financial institutions with their jurisdictions’ tax authorities. Under these reciprocal IGAs, the first exchange had to take place by September 30, 2015, giving the IRS a deadline to put in place a process to facilitate this data exchange. Meeting this deadline reflects a significant international collaboration and partnership with dozens of jurisdictions around the world.

IR-2015-111

 

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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