FATCA is legislation that was enacted to combat tax evasion by U.S. persons with foreign financial assets. The Foreign Account Tax Compliance Act (FATCA) punishes foreign financial institutions (FFIs) for failure to turn over information on its U.S. account holders to the IRS. Under FATCA foreign financial institutions failing to comply will be subject to 30% withholding of certain payments it receives.
Under FATCA, U.S. individual taxpayers holding financial assets outside of the U.S. exceeding a certain threshold must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. Domestic entities do not currently have any FATCA filing requirements. The IRS is, however, working on regulations that will require certain domestic entities to file Form 8938 so it is important that you have a tax advisor who is staying on top of the latest regulations.
Esquire Group will be here to guide you through the FATCA maze so you can stay in the good graces of the IRS and get on with your business. We will ensure you are informed when domestic entity FATCA reporting begins and that your information is reported to the IRS.