FATCA – 1 July 2014 – will not be delayed

Sandy King
In the News

A top official of the US Internal Revenue Service has told a New York audience of lawyers and tax experts that the Foreign Account Tax Compliance Act will not be postponed again‚ a US law journal has reported.

IRS deputy commissioner Michael Danilack’s comments, made on 28 January followed his address to the New York State Bar Association’s tax section, contradict a report published by Taiwan’s Central News Agency nine days before, which suggested that FATCA might be about to be delayed again‚ for another six months.

They were confirmed by an IRS spokesperson yesterday afternoon. Danilack “confirmed what Treasury had been saying for weeks, that there would be no more FATCA delays,” the spokesperson told International Adviser, in an email.

If the Taiwan news agency report had been true, it would have been the third time that the US had delayed the implementation of the main body of FATCA legislation. Last July, the implementation date was pushed back by six months; another delay was announced in October, 2012.

During a Q-and-A session following his keynote speech, Danilack responded to a question from an audience member by saying that there would be “no further delays to implementation” of FATCA, according to Law360, a New York-based online news outlet for the legal profession.

This means FATCA is due to go ahead as scheduled on 1 July, 2014.

Danilack was quoted by the legal news website as saying there was “absolutely no chance” that the FATCA implementation deadline would “slip”.

Law360 reported that Danilack also told his audience of some 1,000 tax attorneys that the long-awaited final guidance on FATCA compliance was due to be published soon.

“We’re extremely close,” he said, according to the website.

“It’s not just soon, it’s imminent.”

Danilack also told his audience that given the scope of the changes under way globally,  “we may be witnessing right before our eyes [the] most pervasive and profound development in the area of taxation in history”.

Post-crisis law

Signed into law in 2010 by president Obama, in the wake of the global financial crisis and a scandal involving a Swiss bank that was found to have numerous significant and undeclared American bank accounts, FATCA requires most foreign financial institutions to report to the IRS information about any accounts they have that belong to Americans. The law applies whether they are resident in the US or elsewhere, and have $50,000 or more in an account. Critics of the law say it places a costly compliance burden on the foreign financial institutions, and has caused many non-US banks and other institutions to stop having American clients.