Financial Transparency Coalition

WASHINGTON – The Internal Revenue Service is giving more time to Toronto-Dominion Bank (TD), Aegon NV (AGN) and other banks based outside of the U.S. to implement a controversial tax reporting rule.

We recently wrote about the U.S. Foreign Account Tax Compliance Act, describing it as a form of (albeit one-way) automatic information exchange, to help the U.S. tax authorities ferret out tax cheats. A new Reuters story (hat tip: Offshore Watch) highlights one of the effects:

Leumi (LUMI.TA), Israel's biggest bank, is requiring U.S. clients to declare their deposits to the Internal Revenue Service, amid heightened scrutiny of offshore accounts by U.S. authorities. The bank is asking its clients to declare that they are not U.S. clients, or to reveal their ...

The FT reports:

The US Treasury is close to issuing rules to force banks worldwide to hand over up to 5m Americans’ account details in an assault on tax evasion that financial institutions say is unworkable. Tens of thousands of banks, fund managers, insurers and hedge funds face having to give the names of US clients with at least $50,000 of assets to the Internal Revenue Service under the Foreign Account Tax Compliance Act, passed in March.

Institutions are stepping up lobbying ahead of guidance from the US Treasury on implementation of the law....