US Lawmakers Introduce Bill to Strengthen FATCA
A pair of Democratic lawmakers in the House and Senate have re-introduced legislation to strengthen FATCA. Rep. Lloyd Doggett, D-Texas, a senior member of the tax-writing House Ways and Means Committee, and Sen. Sheldon Whitehouse, D-R.I., a member of the Senate Budget Committee, introduced the Stop Tax Haven Abuse Act on Monday.
Among the provisions in the bill are ones that would strengthen the Foreign Account Tax Compliance Act, or FATCA, prohibiting U.S. banks from dealing with foreign banks that violate FATCA and ensuring that credit and debit cards issued by the offending foreign banks do not work in the U.S. Any money transferred to an offshore account would be considered taxable income that has not yet been taxed.
The bill would also strengthen FATCA disclosure requirements to ensure that checking accounts and derivatives are disclosed and require foreign holding companies and passive foreign investment companies to file tax returns.
Another provision would treat foreign corporations managed and controlled in the U.S. as domestic corporations to address the problem of U.S. corporations that organize in tax havens such as the Cayman Islands but really do business from the U.S. The bill would require banks and brokers that discover through due diligence to safeguard against money laundering that the beneficial owner of a foreign account is a U.S. taxpayer to disclose that information to the IRS. Swaps payments made from the U.S. to persons offshore would be treated as taxable income.
Editor's Note: To understand the shocking real reason for FATCA see this article here.