IRS requests Swiss banks disclose client data under FATCA
The United States' Internal Revenue Service (IRS) is once again putting pressure on Swiss insurers and banks to disclose their clients tax filing data. The IRS has extended its administrative assistance requests to a group of 40 Swiss banks and insurer companies to disclose the full details of client accounts held by US citizens. Full list here.
On 28th June 2021, Switzerland's Federal Tax Administration (SFTA) on Monday published a list of 40 fiduciary firms, insurance companies, online brokers and banks.This is the fourth update of group administrative requests by the Internal Revenue Service (IRS) under the Foreign Account Tax Compliance Act (FATCA) since December 2020.
"With the vaccines more widely available there is a return to normal, this includes the IRS examiner’ Rasheed Khan, Managing Director for TAINA Technologies America. “Now there is even a bigger urge for international financial institutes to optimise their FATCA validation, accelerate their compliance digital transformation to prepare the team for the IRS examinations.”
In 2014, an agreement between Switzerland & the US came into force, in cooperation to simplify the implementation of FATCA . FATCA, a legislation which was introduced internationally in 2010, compels foreign banks to disclose details of assets and funds held by US citizens that were not previously reported to the IRS.
Under the arrangement, Swiss financial institutions need to disclose the full account details of, private bank accounts that have been identified as American owned, or where foreign transfers were paid to financial institutions but without reporting consent, directly to the US tax authorities with the consent of the US clients.
The Swiss Banks listed need to be concerned, they now have 20 days to obtain consent from US clients for the intended transmission of their data to the IRS, before the Swiss authorities will issue a final decree, according to the Federal Tax Administration(FTA). FTA Notifications of 28 June 2021
According to the State Secretariat forInternational Finance, where US clients refuse to give their consent, Washington has to request this data through normal administrative assistance channels.
"The FATCA form validation remains one of the top compliance priorities." Rasheed Khan added "Now the money question is that, Have you prepared your team for the IRS Information Document Request?"
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