IRS FFI FATCA Compliance Campaign & Form 8966 – Offshore IRS Board Certified Specialist in Tax)

IRS FFI FATCA Compliance Campaign & Form 8966 – Offshore IRS Board Certified Specialist in Tax)

IRS FFI FATCA Compliance Campaign & Form 8966 – Offshore IRS

At a recent tax conference, the IRS stressed the fact that offshore compliance is still a priority.  And, that the IRS would soon be adding to its already long list of compliance campaigns, with a new campaign aimed at Foreign Financial Institutions (FFI) and FATCA.

This type of reporting can have a severe impact on Individual Taxpayers with a FATCA reporting requirement.

What is FATCA (For Individuals)?

FATCA is the Foreign Account Tax Compliance Act. For individuals and filers (non-FFI), it generally requires annual reporting to the IRS on matters involving foreign assets that qualify for disclosure — with an “aggregate total” that meets the annual reporting thresholds.

More than 110 Countries have signed FATCA Agreements. More than 300,000 Foreign Financial Institutions (FFI) report under FATCA.

The failure of an individual taxpayer to report under FATCA can lead to extensive civil fines and penalties – and possibly worse.

What is an FFI?

A brief summary of the basics:

FFI is a Foreign Financial Institution

As provided by the IRS:

Foreign financial institution (FFI). Except as otherwise provided for certain foreign branches of a U.S. financial institution or Territory Financial Institution, an FFI means a financial institution that is a foreign entity. The term foreign financial institution also includes a foreign branch of a U.S. financial institution with a QI Agreement in effect.


What is FATCA (Foreign Institutions)?

Foreign Institutions may have to report U.S. Account Holders to the IRS in order to maintain the status of FFI – and when the information is not otherwise being provided to the IRS.

Form 8966

This form is used by the FFI (in certain situations) for the FFI to report U.S. Account Holder information to the IRS.

Form 8966 is Very Dangerous for U.S. Account Holders

The reason why this form is so dangerous, is because it literally puts individual Account Holder information at the doorstep of the IRS.

And, if the IRS acts upon this information and either audits, examines, or launches an investigation against a U.S. Account Holder BEFORE the account holder has an opportunity to get into Offshore Compliance, it may lead to excessive fines and penalties.

Moreover, the Account Holder is prevented from submitting an IRS Tax Amnesty/Voluntary Disclosure submission.

Golding & Golding, A PLC

We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.

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