On October 27, 2009, Senator Max Baucus (D-Montana) and Representative Charles Rangel (D-New York), chairmen of the Congressional tax writing committees, introduced the Foreign Account Tax Compliance Act of 2009 (the “Bill”) in the U.S. Congress. A statement released by the House Ways and Means Committee indicates that the Bill “is intended to clamp down on tax evasion and improve taxpayer compliance by giving the IRS new administrative tools to detect, deter and discourage offshore tax abuses.” If enacted in its current form, the Bill would, among other things, close down “dividend-washing” transactions (arrangements involving swaps that are perceived to impermissibly avoid a U.S. withholding tax on U.S.-source dividends), require increased reporting with respect to foreign assets held by U.S. persons, impose disclosure requirements on advisors who help set up foreign entities, and strengthen rules and penalties relating to foreign trusts. Both President Barack Obama and Treasury Secretary Timothy Geithner issued statements giving their unqualified support for the Bill.
This is the last in our series of three alerts addressing the provisions of the Bill.
Please see full publication below for more information.