- NY Credits : 4.0
- TX Credits : 4.0
- IRS Enrolled Agent Credits : Federal Tax/Tax Related Matters - 4.0
International Taxation - Foreign Account Tax Compliance Act (FATCA)
The Hiring Incentives to Restore Employment Act of 2010 (HIRE) added Chapter 4 to Subtitle A of the Internal Revenue Code (Sections 1471-1474). This legislation, known as the Foreign Account Tax Compliance Act (FATCA), is a withholding tax imposed upon withholdable payments of U.S. investors in foreign financial and other types of foreign entities. These are very onerous provisions and will impose significant information reporting requirements on foreign financial institutions with respect to U.S. accounts, withholding tax payments, documentation, and reporting requirements. To the extent of noncompliance, the U.S. tax cost could be 30% of the gross withholdable payment received by a U.S. person. In order to be in compliance, tax advisors for both U.S. persons with deposits abroad and foreign financial institutions will require a basic understanding of the new legislation. Needless to say, foreign financial institutions will require information system investment in order to be compliant. Thus, this course is of importance to U.S. persons with deposits in foreign financial institutions, foreign financial institutions, and domestic financial institutions dealing with foreign financial institutions on behalf of U.S. customers. This course is most appropriate for the professional with detailed knowledge in international taxation and foreign financial institutions who may be at a mid-level position within an organization with operational or supervisory responsibilities, or both.
Foreign Account Tax Compliance Act (FATCA) has survived the massive international tax reform of the 2017 Tax Cuts & Jobs Act (TCJA). The TCJA has not only made massive changes to the domestic provisions of the Internal Revenue Code, but has practically rewritten the international provisions. There are transitional rules for repatriating overseas cash together with revisions to Subpart F and the foreign tax credit. In fact, the entire international tax model of US taxation is transitioning from a worldwide system with credit relief to a territorial system with a participation exemption. Despite all this tax legislation upheaval, FATCA has survived. There was a bill introduced both in the House and Senate which proposed to repeal FATCA, however, neither bill made it to TCJA. So this draconian legislation lives on with additional regulations and a judicial challenge to its existence.
Upon successful completion of this course, the user should be able to:
apply the FATCA provisions to payments to foreign financial institutions,
minimize the impact of the 30% withholding tax on the withholding payment, and
discuss the 30% withholding tax on payments to other foreign entities.