The US Foreign Account Tax Compliance Act (FATCA) will definitely come into effect on 1 July this year with no possibility of further delay, according to officials of the US Internal Revenue Service (IRS).
The difficulties include negotiations with foreign governments and problems in setting up the necessary administrative systems, for example a website where foreign banks can register their compliance.
FATCA affects not only Banks but also trusts and other entities.
Rumors and media speculation of yet another postponement have circulated in the past month, after some US official bodies criticized the IRS's state of preparedness.
In a report delivered in December 2013 at the annual Public Meeting of the IRS Information Reporting Program Advisory Committee (IRPAC), the IRPAC recommended that the IRS postpone the requirement to impose FATCA withholding until January 1, 2015.
This month the USA's official National Taxpayer Advocate, Nina Olson, in her annual report to Congress, (See our post Taxpayer Advocate Delivers Annual Report to Congress...Focuses on Taxpayer Bill of Rights, OVDP and IRS Funding) "urged the IRS to introduce extra safeguards to protect US persons against the consequences of FATCA.
However, senior IRS officials have now signaled that the delays are over. This week, IRS deputy commissioner Michael Danilack told a conference in New York that there is 'absolutely no chance' of further postponements. His comment was later confirmed by an IRS spokesperson.
Sources:
Read more at: Tax Times blog
