FATCA - five letters that stand for the Foreign Account Tax Compliance Act and enough to cause turmoil in the minds of tax, compliance and change management professionals everywhere.
The US tax authorities insist that FATCA, which requires foreign financial institutions (FFIs) to report certain payments made to their US account holders or pay a withholding tax of 30%, is about compliance rather than collecting tax. But the legislation has caused consternation among FFIs, who resent what they see as America’s attempt to compel them to collect tax for it.
Tara Ferris, has been central to the US’s effort to ensure the law uncovers all the undeclared income that US citizens hold with foreign financial institutions outside America, since she became senior counsel in the Office of the Chief Counsel (International) of the Internal Revenue Service in August 2011, 17 months after FATCA became law as part of the Hiring Incentives to Restore Employment Act. For example, she was the principal author of Notice 2013-43 in July, which outlined that the enforcement of the legislation was being put back by six months to July 1 2014 and of Notice 2013-69, which consisted of guidance about the FFI agreement for Participating FFIs and Reporting Model 2 FFI.
Ferris is bound to continue as a key point of contact for the US as the countdown to July 1 2014 and the beginning of the enforcement of FATCA continues.
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