IRS Isn’t Confident FATCA Will Work?
Posted by William Byrnes on August 24, 2015
- The IRS might use a summons (presumably John Doe Summons) to obtain offshore creditcard information to track and identify U.S. offshore account depositors through correspondent banks.
- The IRS may reinstitute a broker initiative to issues summons to brokers to identify U.S. beneficial owners of foreign corporations with U.S. brokerage accounts.
What this information indicates to me?
(1) The IRS is not so certain that FATCA reporting will be effective to catch the non-compliant taxpayers.
(2) The IRS estimates that many Americans with foreign accounts are noncompliant.
Given that the IRS has forced billions in spending in four years to bring about FATCA compliance, I find it disturbing that it may not think it is working. Worse is that this tool was always at the IRS disposal, just like the credit card John Doe Summons, and it is a good tool. So why not ask for funding to use it back in 2009 instead of FATCA?
It appears that the strategy for bringing non-compliant taxpayers into compliance is hodge podge, without thought to the ramifications of each, as a whole, and without addressing underlying problems, like taxpayer education and easy to file FBAR. At least Treasury modified the FBAR date to coincide with the 1040 filing date. But the forms are still uncoordinated with different questions, different filing procedures, different penalties. Just not good administration techniques.