On Thursday, January 17, 2013, the U.S. Treasury Department and the Internal Revenue Service (IRS) released the long-awaited final regulations for the Foreign Account Tax Compliance Act (FATCA).
FATCA, codified as Chapter 4 of the Internal Revenue Code, represents the Treasury Department’s efforts to prevent U.S. taxpayers who hold financial assets in non-U.S. financial institutions (foreign financial institutions or FFIs) and other offshore vehicles from avoiding their U.S. tax obligations.
Organizations now have less than a year to prepare for the first wave of compliance milestones starting January 1, 2014. These milestones will include onboarding, withholding on income payments, identifying grandfathered obligations and entering into an FFI Agreement or registering, as required by the effective date.
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