Reuters is reporting that the United States (US) and Ireland have agreed to share information about wealthy citizens' financial accounts in an agreement intended to combat tax evasion. This pact marks the latest in a series of bilateral agreements announced in recent weeks by the U.S. Treasury Department.
Irish Finance Minister, Michael Noonan, confirmed that negotiations with the US have been concluded, and as a result Ireland will be one of the first jurisdictions to enter into a new agreement with the US to implement the Foreign Account Tax Compliance Act (FATCA).
FATCA requires foreign banks to report U.S. account holders to the IRS. After identifying U.S. account holders, the institutions must impose a 30% tax on payments or transfers to account holders who refuse to identify themselves. FACTA in conjunction with the recent slew of bilateral agreements will aid the IRS in improving tax compliance of US taxpayers with assets in foreign jurisdictions.
FATCA has come under fire from Americans with foreign financial accounts because they are accustomed to secrecy. Foreign financial institutions have complained, too, about compliance costs and the law's intrusion, especially in countries where banking secrecy has been a part of the financial tradition.
Despite the controversy, the IRS' disclosure program has collected $5.5 billion. It continues to receive 75 to 150 applications a week from people seeking to enter the program, [Steven] Miller [IRS Acting Commissioner] said at a tax conference speech in Washington.
The program will remain open, but will be less sympathetic to new applicants going forward, he said.
To read the Reuters report, click here.