If you've got an IRS letter on your desk right now, you have a decision to make, and the clock matters. I'm Darrin Mish. I've spent 32 years helping people with exactly this kind of situation. Here's what you should do.<\/p>\n
In their efforts to combat tax evasion, the IRS is mulling over two proposals. \u00a0The first is to get US Banks to disclose the details of their foreign customers (non-US citizens) and the second is to get foreign banks in the US to disclose details of their US customers. \u00a0Senator Carl Levin (D-Michigan) is urging the IRS to impose such information sharing requirements on the banks. \u00a0At present, a similar proposal has been imposed on foreign institutions.
\nElsie Bean, who is the chairman of the Senate Permanent Subcommittee on Investigations, spoke on behalf of Levin when she said the proposed requirement on foreign banks would prevent the US from becoming a tax haven. \u00a0Bean, staff director of the subcommittee, said it is fair to require all US banks to identify their foreign customers if overseas institutions might be required to disclose information about their US depositors.
\nBean added, \u201cThe United States and the IRS are going to have to get cooperation from foreign tax authorities. \u00a0To get that cooperation, we need to give cooperation as well.\u201d
\nHowever, the proposal that obligates foreign banks to disclose US citizens\u2019 details was opposed by some foreign banks namely Canada\u2019s Toronto-Dominion Bank (TD), Allianz SE (ALV) of Germany and Aegon NV (AGN) of the Netherlands.
\nWhen the IRS will implement either or both proposals is anyone\u2019s guess. \u00a0The obviously easier one to implement would be the one requiring US banks to declare foreigners\u2019 accounts. \u00a0Some analysts say this measure, which involves reporting details of non-US bank accounts that earn more than $10 in a calendar year, could be implemented as early as Jan 1, 2012. \u00a0The IRS and Treasury Department met with representatives from banks, non-profits and regulators recently to discuss this matter. \u00a0Banking representatives told the IRS it would cause their depositors to send their money to institutions in countries that won\u2019t report their identities to the IRS.
\nFlorida\u2019s Office of Financial Regulation Commissioner Tom Cardwell said these proposals precipitate some security and soundness concerns for banks in Florida. \u00a0The President of the Florida Bankers Association, Alex Sanchez said often foreign depositors put their money into US banks to avoid political persecution in their home countries. \u00a0Some are concerned over possible kidnappings at home.
\nBut Elsie Bean dismisses such fears as \u2018misplaced\u2019. \u00a0She said, \u201cWe have never heard of a case \u2013 ever \u2013 where a dissident has had their tax information turned over to a government that is oppressing them. \u00a0We have very careful procedures and policies to prevent that from happening.\u201d<\/p>\n