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Newly confirmed IRS Commissioner John Koskinen opened the filing season for the 2013 tax year in Baltimore on Friday. In a conference call with reporters he spoke of many issues including the fact that phone lines may be clogged as the IRS continues to suffer from budget cuts and also that despite low budgets, no further furloughs are going to be made.
During his phone conference, an important issue discussed was about the implementation of the Foreign Account Tax Compliance Act (FATCA), and he said it will be implemented very soon.
“We’re not going to have any delays,” Koskinen told reporters.
The FATCA was originally signed into law by President Barack Obama in 2010 and scheduled to go into effect from January 1, 2013. The date of effect was postponed to January 1, 2014 in 2011, and then in the middle of 2013, the date of implementation of the law was again shifted to July, 2014.
The lack of guidance regarding FATCA led some bank lobbying groups to again request the Obama administration in November, last year, to provide another six-month-delay to a law that has already been delayed twice from coming into effect.
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The FATCA will require foreign financial institutions including banks, insurers and investment funds to send to the IRS, information about the offshore accounts of Americans where such accounts are worth more than $50,000. Businesses failing to comply will be subject to a 30-percent withholding tax on U.S. source income.
A Treasury spokeswoman said on Friday, “We are working diligently to finalize all related guidance to ensure that financial institutions have time to effectively prepare and comply, and there is no consideration for a delay of FATCA implementation.”
Apparently, the White House is keen on having the FATCA implemented without delay, but the IRS is yet to publish forms and guidance for financial institutions. And without such guidance in hand, there would be little time for financial institutions to respond before the FATCA comes into effect.
