Thursday, May 1, 2014
Israel and U.S. Reach Substantive Agreement
Israel and U.S. Reach Substantive Agreement Today, May 1, 2014, the Treasury Department announced that the U.S. has reached an intergovernmental agreement (IGA) with Israel to implement the Foreign Account Tax Compliance Act (FATCA). A Treasury spokeswoman announced that Israel and the U.S. had reached a Model 1 IGA in substance. FATCA, which was enacted in 2010, requires foreign financial institutions (FFI) to report accounts owned by U.S. persons to the Internal Revenue Service or face a 30 percent withholding tax in certain cases on their U.S. source income. These IGAs permit FFIs to give information about these accounts to their own governments, which then would share the data with the IRS. Model 1 agreements call for reciprocal information exchanges between nations. For those U.S. persons who have not disclosed their assets in Israel (or any other foreign country for that matter) the window is closing to do so while still avoiding prosecution. I urge you to consider entering into the offshore voluntary disclosure program (OVDP).