The Foreign Account Taxation Compliance Act (FACTA) is a U.S. law that forces foreign banks to share information regarding American customers’ accounts with the Internal Revenue Service (IRS). The rules established by FACTA are designed to combat tax evasion by U.S. citizens who hold offshore accounts.
wish to become compliant and have unreported offshore income and are not in compliance with other foreign information reporting requirements.
A total of 105 countries have agreed to comply with FACTA. Foreign banks in these countries will share information with the U.S. regarding your offshore balance. The way in which information is shared depends on whether the country at issue has entered into a Model 1 or a Model 2 agreement. Some of these counties are traditional tax havens whose banks are now providing less secrecy for foreign citizens. The guidance of our international tax attorneys can be highly valuable to offshore account holders when seeking to ensure compliance with FACTA or wish to become compliant and have unreported offshore income and are not in compliance with other foreign information reporting requirements.
If you have an undisclosed offshore bank account, get help resolving any issues regarding FACTA reporting. Contact our experienced Dual-Licensed International Tax Lawyers & CPAs by calling the Tax Law Offices of David W. Klasing at (800) 681-1295 or clicking here to book a reduced rate initial consultation. Our lawyers can review your case.
Note:
- As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
- It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
- Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
- As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
Countries Where Foreign Banks Will Share Your Offshore Account Information with The U.S.
Most countries that have agreed to comply with the Foreign Account Taxation Compliance Act (FACTA) have entered into either a Model 1 agreement or a Model 2 agreement. In a country that has a Model 1 agreement, your account information will be gathered by the country’s own financial institutions and then sent to that country’s tax authority. Afterwards, the foreign tax authority will then share the information with the Internal Revenue Service (IRS) in the U.S. There are 94 nations that have entered into Model 1 agreements:
Under a Model 2 agreement, the foreign country’s tax authority will not be part of the information sharing process. Rather, banks in these countries will have information shared directly between financial institutions and the IRS. There are 14 nations that have entered into Model 2 agreements:
Our experienced international tax attorneys can help offshore account holders navigate complex legal requirements and avoid any issues that may arise. If you encounter a problem with your foreign bank account regarding reporting requirements under FACTA, then you should contact our Dual-Licensed Tax Lawyers & CPAs as soon as possible.
Which Countries Are Popular Tax Havens for U.S. Citizens?
Individuals and businesses all over the world seek to avail themselves of the lowest possible tax rate. Several countries have intentionally positioned themselves as go-to locations for people who hope to minimize their tax liability. No matter where your account is held, our tax attorneys can help resolve any issues you have with the Internal Revenue Service (IRS). Here are some of the places that are popular tax havens for U.S. citizens in 2023:
Bahrain
Bahrain has become a popular tax haven for U.S. citizens. The country is very friendly to businesses, charging a corporate tax rate of only 0-10%. Furthermore, there is no personal income tax. It is easily apparent why this nation has become a preferred destination for those looking to minimize their tax burden.
Bermuda
Bermuda is another popular nation for offshore account holders. The government in Bermuda has established no personal or corporate income taxes. Additionally, there are no capital tax gains in Bermuda. Therefore, many businesses and individuals decide to relocate here.
Cayman Islands
The Cayman Islands are another place that offers a multitude of advantages for those looking to lower their tax burden. In the Cayman Islands, account holders will pay no personal income taxes, no corporate taxes, and no capital gains taxes. Further, the Cayman Islands are home to some of the world’s largest banks and hedge funds. It is obvious why this British Overseas Territory has become a preferred tax haven.
Gibraltar
Gibraltar is another British Overseas Territory that acts as an optimal tax haven. In Gibraltar there are no corporate income taxes, no inheritance taxes, and no capital gains taxes. Additionally, there are very low personal income tax rates ranging from 0% to 30% for high earners. If you have encountered an issue regarding reporting information on your bank account in Gibraltar, then our tax attorneys can help.
Guernsey
Guernsey is a channel island that provides several advantages for those pursuing lower tax rates. Account holders in Guernsey are subject to low personal income tax rates, no inheritance taxes, and no capital gains taxes. In conjunction with its status as an international finance center, Guernsey has become a preferred location for those seeking a tax haven for themselves or their businesses.
Isle of Man
The Isle of Man also offers many advantages as a tax haven. Like Guernsey, the Isle of Man has established no capital gains taxes, no inheritance taxes, and low personal income tax rates. Still, what sets the Isle of Man apart is its thorough network of double taxation treaties which make the nation a preferred destination for businesses looking to minimize their tax burden.
If You Encounter an Issue Regarding FACTA Reporting for Your Foreign Bank Account, Our Attorneys Can Help
If you have a FACTA reporting issue regarding your foreign bank account, seek assistance from our experienced Dual-Licensed Tax Lawyers & CPAs by calling the Tax Law Offices of David W. Klasing at (800) 681-1295 to review your case.
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