April 27, 2022 Connor Steens

FATCA – 12 YEARS ON

BY TARITA HUTCHINSON

2022 marks the 12 year anniversary of the Foreign Account Tax Compliance Act, better known as FATCA. The Act was introduced to close the Tax Gap, estimated to be over $400 billion per annum, by improving compliance on reporting of foreign investment to US tax authorities.

 

A recent report by the Treasury Inspector General for Tax Administration evaluates the Inland Revenue Service efforts to implement FATCA. The Report “Additional Actions Are Needed to Address Non-Filing and Non-Reporting Compliance Under the Foreign Account Tax Compliance Act” notes that the IRS has “significantly departed” from its original FATCA plan to improve reporting compliance of foreign investments by US taxpayers.

 

The report recommends six additional actions to realign FATCA with the original intent:

  1. Compliance actions for under-reporters identified including assessing penalties on under-reporting;
  2. Identification and action on non-filers of Form 8938;
  3. Identification and action on non-compliance by foreign financial institutions (FFI’s) from Inter-government agreement (IGA) countries;
  4. Issue notice to Model 1 IGA countries to collect and provide TINS of US individuals (Note- IRS has opposed this recommendation);
  5. Establishment of goals, timelines and milestones for FATCA campaigns; and
  6. Establishment of an information sharing program to allow the conduct of examinations and collection actions.

 

The Treasury Inspector General Report is scathing of the IRS implementation of FATCA and its failure to due to resource limitations to implement the regime. For more details you can find the report here https://www.treasury.gov/tigta/auditreports/2022reports/202230019fr.pdf

Connor Steens

Connor Steens works as an Analyst at Southpac Group. Connor has worked closely with Guy on investment an banking relationships. Connor currently oversees and monitors current marketing analytics, exposure and direction, content creation and market presence.
Get In Touch Today

Please fill the contact form below and one of our team will contact you shortly.



    X
    Contact Us