U.S.

Will Ease Enforcement of Tax-Evasion Law for 2014, 2015

By John D. McKinnon
May 2, 2014

The Treasury Department will temporarily relax enforcement of a new law aimed at
discouraging offshore tax dodging, at least for financial institutions that are making
good-faith efforts to comply.

The announcement on Friday doesnt postpone the July 1 implementation of the law,
known as the Foreign Account Tax Compliance Act, or FATCA. However, the Treasury
and Internal Revenue Service wont rigorously enforce many of the laws requirements
for 2014 and 2015, as long as firms are trying to cooperate, according to the notice.

Current FATCA rules already phase in a number of financial institutions new duties
including identifying and reporting on U.S.-owned accountsthrough 2016. To further
ease the administrative burden, officials said the IRS will regard calendar years 2014
and 2015 as a transition period for purposes of enforcement and administration of those
requirements. With respect to the transition period, the IRS will take into account the
extent to which institutions have made good faith efforts to comply with the new
regulations, forms, and other requirements of FATCA, the Treasury said.

Other steps announced on Friday will ease requirements for creation of some new
accounts during the transition period in 2014. The U.S. also will ease rules for branches
of multinational banks that are located in countries that havent yet come to agreement
with the U.S. on enforcing FATCA.