Mr. Cope monitors the development of U.S. tax law daily through postings on government websites, daily tax publications, monthly tax journals, tax newsletters, tax conferences and meetings of professionals organizations in New York and Washington. Each month he publishes the Tax Insights Blog, which describes and analyzes significant U.S. tax developments (e.g., judicial decisions, regulations, proposed tax legislation) having cross-border tax consequences. The blog's content should be of interest to U.S. businesses with foreign operations and businesses headquarted outside the United States with U.S. investments or U.S. operations.
Visitors to this website may subscribe to the blog via the RSS link below.
Ohio District Court Rules against Taxpayers Seeking Injunction to Stop FATCA Reporting
In a recent decision, Mark Crawford et al. v. United States Department of the Treasury, the U.S. District Court for the Southern District of Ohio ruled against a motion for preliminary injunction by Senator Rand Paul and six other plaintiffs. These individuals requested that the district court enjoin the U.S. Treasury Department from enforcing the Foreign Account Tax Compliance Act (“FATCA”), the intergovernmental agreements (or “IGAs”) negotiated by the Treasury to implement FATCA and the Report of Foreign Bank and Financial Accounts (“FBAR”) administered by the U.S. Financial Crimes Enforcement network (“FinCEN”). The decision is significant because if a preliminary injunction were granted, the extensive global network created over the last several years to implement FATCA would have been brought to a standstill. The decision also is of interest because it is a rare challenge to a tax law based on U.S. constitutional law.
IRS Issues Draft FFI Agreement Implementing FATCA
On October 30, 2013 the IRS has issued Notice 2013-69, whic h include a draft model FFI agreement.
More FATCA Guidance Issued in August 2013
In August 2013 the IRS and Treasury issued additional guidance on FATCA implementation relating to registration and other matters.
IRS Eases Some FATCA Deadlines
Acknowledging that “certain elements of the phased timeline for the implementation of FATCA present practical problems for both U.S. withholding agents and FFIs [Foreign Financial Institutions]” the IRS issued Notice 2013-43
on July 12, 2013 extending the deadlines under the FATCA final regulations for U.S. withholding agents and participating foreign financial institutions to begin their due diligence, withholding, and reporting requirements. The final FATCA regulations will be amended to reflect the content of the notice.
Two Bankers Associations Sue to Delay Effective Date of Expanded Deposit Interest Reporting
On April 18, 2013 the Florida and Texas Bankers Associations filed a complaint in United States District Court for the District of Columbia seeking (i) a declaratory judgment that final regulations issued by the IRS and Treasury in 2012 under section 6049 were promulgated in violation of the Administrative Procedure Act (“APA”) and the Regulatory Flexibility Act (“RFA”), and (ii) an order staying the enforcement of those regulations.The regulations require banks and other financial institutions to report to the IRS annually interest paid on deposits by nonresident aliens resident in certain countries with which the United States has in effect an income tax or other convention or bilateral agreement requiring the exchange of tax information.
Tenth Circuit Refuses to Quash IRS Subpoena for Bank Account Data Requested Under Mexican Treaty
A recent order and judgment by the Tenth Circuit issued in the case of Solomon Juan Marcos Villareal v. United States of America illustrates how the IRS can use a summons to obtain U.S. financial data beneficial to a non-U.S. tax authority’s investigation of a non-U.S. taxpayer and then share that information with the tax authority pursuant to the terms of an income tax treaty or TIEA.
IRS Releases Draft FATCA Registration Form
In April, the IRS released for review and comment a draft of Form 8957 (Foreign Account Tax Compliance Act (FATCA) Registration). The form is available at: http://www.irs.gov/file_source/pub/irs-utl/13f8957.pdf/ .