The IRS announced that it has begun to exchange financial account information with certain foreign tax administrations, whereby certain account information held by foreigners in the U.S. is provided to other countries, just as the U.S. receives information on its citizens’ foreign accounts. The IRS plans to use this information exchange as part of its overall efforts to implement the Foreign Account Tax Compliance Act (FATCA). According to the IRS, the information will provide a better way for the U.S. and partner jurisdictions to verify the tax compliance of taxpayers using offshore banking and investment facilities. It will also improve detection of those who may try to evade reporting their offshore accounts and the income attributable to those accounts. Read the full IRS release here.
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