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Offshore Accounts3/31/09 - The IRS will soon propose stepped-up reporting requirements for foreign banks that handle accounts for U.S. clients. The IRS spoke at a hearing to examine IRS efforts to crack down on offshore tax evasion by U.S. citizens, held by the House Select Revenue Measures Subcommittee. One of the focuses of the hearing was how to collect more information from foreign banks on their U.S. clients. One way the IRS currently does so is through so-called qualified intermediary agreements with those banks. The subcommittee asked whether the IRS will expand information reporting requirements under the program to include all U.S.-held bank accounts, not just those accounts that hold U.S. securities. The IRS replied that the agency will issue new proposals to strengthen reporting tools on foreign bank accounts held by U.S. persons. "We cannot allow an environment to develop where wealthy individuals can go offshore and avoid paying taxes with impunity." Reuven S. Avi-Yonah, a professor at the University of Michigan Law School, told the House panel that the U.S. could be losing about $50 billion in tax revenue every year because of offshore tax cheating by individuals. |
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