International Tax Reporting

On January 17, 2013 the IRS issued final regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities.

Under the Foreign Account Tax Compliance Act of 2009 (FATCA), enacted as part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147

Italian resident taxpayers are required to report their foreign financial investments and assets which can generate foreign-source income subject to tax in Italy, by filling out a special part of their annual income tax return referred to as form RW. Foreign individuals who have (personal and business) interests and contacts with Italy that may trigger Italian tax residency under Italian residency or domicile tests would be subject to the same reporting obligations. Italy’s tax administration is stepping up its enforcement efforts in this area of law and penalties for failure to report are particular harsh and difficult to mitigate after the fact. We have prepared an overview of Italian international tax reporting rules with a general discussions of some of the relevant issues that arise in this area of law.
Continue Reading Italian International Tax Reporting Rules Through Part RW of Italian Tax Return

On January 9, 2011 the Internal Revenue Service reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs.

The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion.  This program will be open for an indefinite period until otherwise announced.

“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.”

The program is similar to the 2011 program in many ways, but with a few key differences. Unlike last year, there is no set deadline for people to apply.  However, the terms of the program could change at any time going forward.  For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.

“As we’ve said all along, people need to come in and get right with us before we find you,” Shulman said. “We are following more leads and the risk for people who do not come in continues to increase.”

Continue Reading IRS Announced Reopening of Tax Amnesty Program For Undisclosed Foreign Financial Accounts