THEVOZ Attorneys Provides Advice on FATCA Related Issues
In 2010, Congress introduced the Foreign Account Tax Compliance Act (FATCA). FATCA gave power to the U.S. Internal Revenue Services (IRS) to create mechanisms to deter, detect, and discourage offshore tax abuses by U.S. persons. Any individual or financial institution (FI) that receives or make payments on U.S. sourced FDAP income is affected by this law.
Under FATCA, foreign financial institutions (FFIs) have to gather information on their U.S. account holders and report either to the IRS or to the local tax authority. Any party that is not compliant with FATCA will be subjected to 30% withholding (also known as Chapter 4 withholding). Foreign account holders and FFIs can avoid the withholding tax by providing the necessary documents to the withholding agent that would verify their FATCA status.
United States citizens and residents have to disclose and report on their foreign financial accounts. They can disclose foreign financial accounts by attaching the Form 8938 to their federal income tax return. The U.S. account holders also need to facilitate information requests (filling out W-9) from FFIs.
U.S. citizens, residents, foreign individuals, U.S. FIs, and FFIs that deal with U.S. sourced income should seek tax advice in order to be fully compliant with FATCA. THEVOZ Attorneys has knowledge and experience in dealing with FACTA compliance. We have worked with fund managers, wealth managers, and other FFIs on FATCA issues. We can advise on creating company internal manuals, requesting proper documentation from clients, and all other FATCA related issues.