Financial Transparency Coalition

WASHINGTON, DC – Global Financial Integrity (GFI) applauded the U.S. Treasury Department and the Internal Revenue Service (IRS) for last night adopting a regulation (TD 9584) requiring banks to report information about interest earned on U.S. deposit accounts held by non-resident aliens, as banks have been required to do for accounts held by American citizens and Canadians. GFI and others have long advocated for implementation of this rule as an important tool in the fight against international tax evasion, money laundering, drug trafficking, corruption, and terrorist financing.

About three years ago, the U.S. Internal Revenue Service (IRS) caught wind that Swiss bankers from Swiss banking giant, UBS, were traveling to the United States and systematically offering wealthy Americans the opportunity to evade taxes. They also learned UBS formed offshore non-U.S. companies for investors’ assets and then engaged in an aggressive cover-up to conceal these activities. After an intense investigation by the IRS, the United States Department of Justice (DOJ) pursued both criminal and civil charges against the giant Swiss bank. Federal prosecutors dropped criminal charges eighteen months later, however, after the bank admitted to fraud and conspiracy,...

Today, the House Subcommittee on Financial Institutions and Consumer Credit held a hearing on a proposed IRS regulation which would allow the IRS to track the deposits of non-resident aliens in the United States. The United States functions as a tax haven for many non-resident aliens, as the IRS is unable to determine how much money is hidden in US banks. The IRS is seeking the regulation as part of a global effort to increase tax information exchange, and eventually collect revenue from more US tax evaders. Video is available here. Here's how it all works. The IRS collects information...

In 2010 Congress enacted the Foreign Account Tax Compliance Act (FATCA), which aims to combat tax evasion by U.S. citizens holding investments in offshore accounts. Under this law, the IRS and the U.S. Department of the Treasury require U.S. taxpayers holding financial assets on foreign soil to report those assets. FATCA also requires foreign financial institutions to report certain information about U.S. taxpayers directly to the IRS. The law phases these requirements in several stages. Starting in 2013, the IRS will require participating banks to conduct due diligence for identifying new and pre-existing U.S. accounts and reporting requirements will...