Exclusive: Foreigners’ accounts in U.S. banks eyed in tax crackdown
The Obama administration may soon ask Congress for the power to require more disclosure by U.S. banks of information about foreign clients’ accounts to those clients’ home governments, as part of a crackdown on tax evasion, sources said on Monday.
In a move facing resistance from some in the U.S. banking industry, two tax industry sources said the administration was considering asking Congress in an upcoming White House budget proposal for the authority to require more disclosure from U.S. banks.
The information-sharing effort stems from a fight by the Treasury Department against offshore tax evasion under FATCA adopted in 2010 and set to begin taking effect at the end of 2013.
PUSHBACK ON FATCA
FATCA requires non-U.S. banks, investment funds and other financial institutions to tell the IRS about accounts held by Americans with more than $50,000. Foreign firms that ignore the law could be frozen out of U.S. financial markets.
When FATCA was first approved, many foreign banks complained that they could not comply without violating their home countries’ financial privacy laws.
Only four bilateral pacts are fully completed, with the United Kingdom, Denmark, Ireland and Mexico. U.S. Treasury officials are still negotiating with more than 50 other countries.