New Jersey Tax Evasion Attorney Discusses India’s Acceptance of FATCAOffshore Account Update
Posted in on November 27, 2015
The United States government requires U.S. citizens to report all of their offshore investments and accounts, even when citizens live abroad and have accounts in the location where they reside. Annual reports of offshore accounts must be filed according to the requirements set forth in the Foreign Account Tax Compliance Act (FATCA). To ensure no accounts slip through the cracks and that the government is aware of all accounts owned by U.S. citizens, the government has also been moving forward with establishing intergovernmental agreements for the exchange of information under FATCA.
As more countries sign on to implement FATCA, foreign financial institutions will increasingly face requirements to go through all accounts to find holdings connected to U.S. citizens. These foreign financial institutions will face penalties for not providing information on accountholders to the government. Banks have generally turned over requested details once FATCA agreements are implemented in their countries, so accountholders can expect to have the U.S. government obtain access to their information.
India is now a country that has an agreement with the U.S. government. If you have funds in an account in India or any offshore accounts, you need to be aware of how FATCA affects you. If you have not been complying with your ongoing reporting obligations, now is the time to speak with a New Jersey tax evasion attorney about what you can do to minimize potential financial penalties and even possible criminal consequences.
India Signs on to FATCA
Many locations throughout the world have already entered into agreements with the United States for FATCA implementation. In 2012, FATCA agreements were signed with the United Kingdom, Switzerland, Japan, Germany, South Africa, Italy, Spain and France. In July of 2015, an agreement was entered into between India and the United States when the agreement was signed by the U.S. ambassador and the revenue secretary in India.
Because India is now helping to implement FATCA, financial institutions within India must go through account records, identify accounts that could be connected to U.S. citizens and provide information on those accounts. Financial institutions that do not comply with their obligations to give information to U.S. authorities face a penalty equal to 30 percent of all U.S. revenues from sales, taxes, fees and dividends. The requirement for exchanging information went into effect in October of 2015. Beginning in 2017, India and other countries who have signed onto a multilateral agreement will also be participating in an automated system for the exchange of financial account information.
When signing on to FATCA implementation, the revenue secretary indicated the agreement would “fight the menace of evasion and bring transparency in the matters of the payment of taxes which are legitimately due to the government.”
Accountholders, meanwhile, can expect to have their information provided to government officials. U.S. citizens living in India may also find accounts closed by banks that do not want to deal with burdensome reporting requirements.
If you have money offshore and are concerned about whether U.S. authorities will obtain your information from a financial institution in compliance with FATCA, you should take action before you end up under investigation. Speak with an NJ tax evasion attorney like Kevin Thorn today to learn about possible options that could be available to you.