Israel Becomes The 28th Country To Sign FATCA Accord
Under the Foreign Account Tax Compliance Act (“FATCA”), foreign banks, insurers and investment funds must send the Internal Revenue Service information about Americans’ and U.S. permanent residents’ offshore accounts worth more than $50,000. Institutions that fail to comply could effectively be frozen out of U.S. markets. The U.S. has entered into intergovernmental Agreements (“IGA’s”) with 27 countries for the implementation of FATCA.
On May 1, 2014 it was reported that Israel signed the FATCA Model 1 Accord which requires Israeli financial institutions to report information about U.S. customers’ accounts to the Israeli tax authorities, who will then send that information to the IRS. The news comes only a day after the indictment of a former senior vice president of an Israeli bank, widely believed to be Bank Mizrahi, for conspiring to conceal the existence of undeclared accounts owned and controlled by U.S. customers in Israel.
This makes Israel the 28th country to join the ranks of those countries cooperating with the U.S. in disclosing U.S. accountholders to the IRS.
The 27 countries with IGA’s already in place are:
| Australia | Finland | Isle of Man | Mexico |
| Bermuda | France | Italy | Netherlands |
| Canada | Germany | Japan | Norway |
| Cayman Islands | Guernsey | Jersey | Spain |
| Chile | Hungary | Luxembourg | Switzerland |
| Costa Rica | Honduras | Malta | United Kingdom |
| Denmark | Ireland | Mauritius |
Countries which are close to having an IGA in place are:
| Austria | Estonia | Liechtenstein | Qatar |
| Belgium | Gibraltar | Lithuania | Slovenia |
| Brazil | Jamaica | New Zealand | South Africa |
| British Virgin Islands | Kosovo | Poland | South Korea |
| Croatia | Latvia | Portugal | Romania |
| Czech Republic |
Click here for progress and developments IRS has made in gathering information from foreign banks and foreign governments.
Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50% of the amount in the account at the time of the violation and may even result in the IRS filing criminal charges.
The IRS is giving taxpayers one last chance to come forward and voluntarily disclose foreign accounts and unreported foreign income before the IRS starts investigating non-compliant taxpayers.
If you have never reported your foreign investments on your U.S. Tax Returns, you should seriously consider participating in the IRS’s 2012 Offshore Voluntary Disclosure Initiative (OVDI). Once the IRS contacts you, you cannot get into this program and would be subject to the maximum penalties (civil and criminal) under the tax law. Taxpayers who hire an experienced tax attorney in Offshore Account Voluntary Disclosures should result in avoiding any pitfalls and gaining the maximum benefits conferred by this program.
Protect yourself from excessive fines and possible jail time. Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego, San Francisco and elsewhere in California qualify you for OVDI.
Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems, get you in compliance with your FBAR filing obligations, and minimize the chance of any criminal investigation or imposition of civil penalties.
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