US Plans To Reduce FATCA Burden
FATCA sneaked onto the statute book on 2010 after being tacked on to President Obama’s economic stimulus legislation, the HIRE Act. It is intended to ensure that all US citizens with interests in overseas bank accounts comply with US tax laws. That is a very simple overview of the law, though. To fully understand it (or, more likely, to be fully baffled by it), one would need to wade through hundreds of pages of legislation, regulations, guidance, inter-governmental agreements and advisory notices issued by the Internal Revenue Service. Alternatively, for a more rewarding experience, you could try wading through treacle instead.
The US Government is on something of a mission to reduce the administrative burden posed by FATCA on taxpayers and financial institutions – and probably itself. In December 2018, it announced proposed regulations intended to reduce the burden on taxpayers of compliance with certain requirements. Then, earlier this month, the IRS added to its “frequently asked questions” on FATCA compliance issues and announced a hearing to discuss the aforementioned regulations.
However, if the US really wants to make a meaningful reduction in the FATCA burden, it really does have its work cut out. Just look at the FATCA FAQs page. Sorry, pages. Indeed, a bit like the FATCA legislation itself, these are arranged over several sections and sub-sections. You’ve got FATCA General FAQs; Registration System FAQs; FFI List FAQs; International Data Exchange System (IDES) technical FAQs; Form 8938 FAQs; and International Compliance Management Model (ICMM) system FAQs. The General FAQs section alone is split into about 20 sub-sections, including – on second thoughts I’ll spare you the gory details. They’re there for all brave enough to look.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look